| Q&A of the Week |
Lava Flow and Earthquake Exclusion
A Hawaii subscriber recently asked the following question:
Under the HO-3 and DP-3 is lava flow excluded based on the landslide/earth movement exclusion?
2. Earth Movement
Earth Movement means:
a. Earthquake, including land shock waves or tremors before, during or after a volcanic eruption;
b. Landslide, mudslide or mudflow;
c. Subsidence or sinkhole; or
d. Any other earth movement including earth sinking, rising or shifting;
caused by or resulting from human or animal forces or any act of nature unless direct loss by fire or explosion ensues and then we will pay only for the ensuing loss. This Exclusion A.2. does not apply to loss by theft.
ANSWER: Merriam-Webster defines "earth" as "the fragmental material composing part of the surface of the globe; especially: cultivable soil. Soil is defined as firm land: earth; 2a: the upper layer of earth that may be dug or plowed and in which plants grow b: the superficial unconsolidated and usually weathered part of the mantle of a planet and especially of the earth; a medium in which something takes hold and develops."
"Lava" is "molten rock that issues from a volcano or from a fissure in the surface of a planet (as earth) or moon; also: such rock that has cooled and hardened. Rock is a large mass of stone forming a cliff, promontory, or peak; 2: a concreted mass of stony material; also: broken pieces of such masses 3: consolidated or unconsolidated solid mineral matter; also: a particular mass of it."
It really depends on whether or not the lava was fresh and had not weathered or had weathered overtime and rolled down a hill like a regular rock. If it was fresh lava the earthquake exclusion does not apply. However, if this is in Hawaii please check the special provisions form, which may have made a provision that lava is included in that exclusion. |
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| Litigation Watch |
Wrongful Entry or Eviction Claim and Coverage under Excess Liability Policy
An insurer commenced this action seeking a declaratory judgment that it did not have a duty under excess public entity liability insurance policies to defend an underlying action. This case is Lexington Ins. Co. v. St. Bernard Parish Gov't, 548 Fed. Appx. 176 (2013).
After Hurricane Katrina flooded virtually every structure in St. Bernard parish, the parish passed an ordinance condemning 5,731 structures in disrepair, thereafter demolishing many of them. In response, seventy property owners sued St. Bernard in various state court actions alleging that St. Bernard had wrongfully demolished or damaged their property.
St. Bernard sought defense and indemnity for these lawsuits under three consecutive Lexington insurance policies. Lexington did not assume the defense but rather brought this action seeking a declaratory judgment, requesting a declaration that the $250,000 retained limit applied separately to each alleged demolition or property damage asserted in the underlying actions. Under that theory, no defense would be owed as no property had a value exceeding $250,000.
The trial court granted judgment for the insured and this appeal followed.
The United States Court of Appeals, Fifth Circuit, noted the insurer's argument that the injuries alleged by the property owners were not personal and advertising injury occurrences as defined in the policies. The court found that the sole contention between Lexington and St. Bernard is the function of the phrase "by or on behalf of its owner, landlord, or lessor" found in the definition of "personal and advertising injury." The insurer said that the phrase modifies the wrongful acts, such that the eviction or invasion of right of occupancy must occur by or on behalf of the owner, landlord, or lessor of the property. The insured contended that the phrase modifies "that a person occupies," such that the injured party must rightfully occupy the property by or on behalf of its owner, landlord, or lessor. |
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