Federal Court Expands "Direct Physical Loss" Definition to Benefit of Insureds

Originally published by Robert Trautmann .

For coverage to be afforded under insurance policies there is a requirement that the insured property suffer a direct physical loss from a covered cause of loss. This often leads to disputes and litigation concerning whether property suffered a physical loss. Insurance carriers argue that a physical change in the insured property must occur before coverage attaches. Policyholders, however, often have damaged property and business interruption without a physical change to the insured property. When is coverage provided in such circumstances?

In typical attorney fashion, I will say it depends. Different jurisdictions handle these sorts of situations differently. Recently, U.S. District Judge William H. Walls took a huge step forward for policyholders in Gregory Packaging Inc. v. Travelers Property Casualty Company of America.1 In Gregory Packaging, the insured suffered an ammonia release in 2010 that prompted them to temporarily shutdown their operations and remain closed down for…

.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

from Texas Bar Today http://ift.tt/12XBiWC

via Abogado Aly Website