PUBLISHED ON: April 21, 2023
In January, the U.S. District Court for the Eastern District of New York provided an interesting twist on the classic wind versus flood insurance coverage dispute, when it decided a case that featured policy provisions containing anti-concurrent causation language in both a flood exclusion and a windstorm coverage grant provision.
Anti-concurrent causation language typically is found as a preface to certain exclusions in commercial property insurance policies, and purports to exclude in their entirety losses caused by both covered and uncovered perils.
The case, Madelaine Chocolate Novelties Inc. v. Great Northern Insurance Co. — involving a well-known chocolatier — is the most recent insurance coverage decision stemming from the destruction caused by Hurricane Sandy over a decade earlier.
The court's reasoning, which ultimately led to an unfavorable coverage outcome for Madelaine, provides important lessons for policyholders.
In particular, this case underscores the need for policyholders to carefully review their policy language, consider whether any ambiguities are contained in the provisions within, and do what they can to avoid the dreaded anti-concurrent causation clauses when procuring commercial property policies.
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