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A Review of Ensuing Loss Case Law: 2010 to Present

Paul Sullivan and Jeffrey Gordon
ABA The Brief Tort Trial & Insurance Practice Section
March 1, 2014

The Spring 2014 issue of the widely circulated ABA magazine, The Brief, features an article titled "A Review of Ensuing Loss Case Law: 2010 to Present" by Zelle Hofmann attorneys Paul Sullivan and Jeffrey Gordon.

Ensuing or resulting loss provisions in an "all risk" property insurance policy provide an exception to coverage exclusions when an excluded peril in the chain of events results in damage to covered property. Ensuing loss provisions were developed in response to property insurance coverage issues arising from the San Francisco earthquake and fire in 1906. The San Francisco earthquake ruptured gas mains, which in turn sparked massive fires that burned across the city for three days, causing even greater damage than the earthquake itself. Insurers unsuccessfully argued that, because the earthquake started the causal chain that resulted in all the fire damage, the earthquake exclusion applied to bar coverage for fire damage as well. Following the disaster, the industry developed ensuing loss provisions in an effort to clarify the scope of coverage where an excluded peril is a link in the chain of property damage causation. However, application of the policy language to real-world fact patterns has proven to be a challenge for courts.

To read the article in full, please click here.

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