When buying business insurance or filing business insurance claims, most people are familiar with (and avoid) the “known prior claims or damage” exclusion, which bars coverage for damage or injury that began before the policy period began if the policyholder knew or should have known about it. But what about the “continuous or progressive injury or damage” exclusion?
This is a relatively new exclusion that even more severely reduces coverage for long-tail claims. In the last four years, it has been upheld by courts in several states, and most recently by the Supreme Court of South Dakota. The best defense against it is to make sure it’s not in the policy. So what exactly is it?
The continuous or progressive injury or damage exclusion is a recent, non-standard, manuscripted exclusion. All versions eliminate coverage for property damage and bodily injury that begins before the inception of the policy in question but continues into its coverage period. It is similar to the known prior claims or damage exclusion, except the policyholder’s knowledge of the damage or injury is not required. As such, it limits coverage in a way that is a serious trap for the unwary, as the South Dakota case illustrates.
Read the full article: When the Earth Moved, Cracks Appeared