Plaintiff, Connelly & Tibbits Properties, LLC, obtained a policy of insurance covering rental property from defendant, Leatherstocking Cooperative Insurance Company. A fire damaged the building. In the course of the extinguishment of the fire, plaster was disturbed. New York State Code required that an asbestos survey be completed prior to any further action on the building. The survey found asbestos, and the insured obtained an estimate for the cost of asbestos removal.
The insurer paid its insured for all of its claim, but denied coverage for the cost of the asbestos removal.
Plaintiff brought suit seeking "the full amount of the building damages, and remediation of asbestos." Plaintiff moved for summary judgment, and defendant cross-moved for summary judgment. The lower court denied plaintiff's motion, and granted defendant's motion for summary judgment.
On appeal, the Appellate Division, Fourth Department, held that the terms of the policy at issue were unambiguous, and that the policy did not provide coverage for the increased costs sought by plaintiff for asbestos removal. 109 A.D.3d 1198 (4th Dept. 2013). The Court stated:
Pursuant to the terms of the contract exclusion, no coverage exists for increased costs caused by the enforcement of the state code at issue here, 'irrespective of any other concurrent or subsequent contributing cause or event'***
This is a good example of the significance of a concurrent cause provision in a policy where, arguably, multiple causes for a loss or portion of a loss are present.
If you require further information regarding the information presented in this Legal Alert and its impact on your organization, please contact John R. Casey at (518) 429-4277 or jcasey@hblaw.com.