OCCURRENCE/TRIGGER OF COVERAGE – Emergency Demolition of Structure Was an Intentional Act and Not an Occurrence
(N.Y.A.D. 4th Dept., April 24, 2009)
In a case successfully handled by the authors, the Appellate Court declared that the insurer was not required to defend the policyholder against a federal claim asserting constitutional violations arising from a Village’s demolition of a fire-damaged building.
In January, 2005 a fire occurred causing significant damage to a structure. As a result of the fire, Village officials determined that it was necessary to demolish the remnants of the building, and did so. Subsequently, the building owner commenced an action in federal court seeking relief premised upon the violation of his constitutional rights, including free speech and lack of due process.
The Village sought defense under a Commercial General Liability policy arguing the federal action was within the scope of the policy. The insurer argued that the demolition of the structure was not an “accident” and therefore, not an occurrence as required to trigger coverage. Moreover, the “intentional act” exclusion applied and precluded coverage. The trial court agreed with the policyholder and entered a judgment requiring the insurer provide a defense.
On appeal, the Appellate Court reversed the trial court stating that the loss was not an occurrence from the viewpoint of the insured. The court noted that the complaint asserted the destruction of the building was intentional, requiring the court to conclude there was no accident and therefore, no coverage. (Full Case available here:
By Daniel W. Gerber and Brian Biggie