Water Damage Occurring Over Several Year Period Can Be "Occurrence" Covered Under Insurance Policy

Originally published by Shaun Marker .

Now get ready because everything you thought you knew about water damage claims and whether they are occurrences that are covered, or ongoing events that are not covered, may be tested with this one. Would you think that a water damage claim occurring over a sixteen year period could be covered under a property insurance policy? It may sound doubtful at first glance, until you read about the situation that led to a covered claim in a Federal Court in Wisconsin involving Chubb Indemnity Insurance Company.1

In October 2010, the policyholders discovered that water infiltration had been causing damage within the building envelope of the home. The infiltration was ongoing and progressive in nature, beginning around the time of original construction and continuously occurring with each subsequent rainfall. On December 22, 2010, they submitted a claim to Chubb for the discovered damage; Chubb denied coverage.

The U.S. Court of Appeals for the 7th Circuit ruled that Chubb had to pay a…

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