Umbrella Liable 20 Years Later

Commercial Umbrella/Excess	Property Damage Not Expected or Intended
Faulty Installation	Expired Policy but Coverage Exists

The case centered on whether a commercial umbrella liability policy covered a claim resulting from a fire that destroyed a grain elevator sixteen years after the policy's termination. The policy was active for only one year. The fire was caused by the insured's negligent installation of a heat detection and fire suppression system during that policy period. After settling the fire loss, the property insurer of the grain elevator exercised its subrogation rights and sued the installer, who was the umbrella insured, seeking approximately $2.5 million.

The insured requested coverage from the insurer that issued the 1976-77 umbrella policy. The insurer refused liability because the damage and lawsuit took place sixteen years after the policy expired. In response, the insured initiated legal action to seek a coverage declaration, leading the insurer to file a motion for summary judgment. The trial court determined that the policy did not cover the damage and claim that occurred many years after the policy was issued. The insured then appealed the decision to grant the insurer's summary judgment and dismiss their case.

On appeal, the insurer argued that no covered "occurrence" took place during the policy period, asserting that the 1993 fire was the actual "occurrence" and occurred outside the coverage. Conversely, the insured claimed that the "occurrence" was the supposedly defective installation of the equipment.

The appeal court observed that "occurrence" was defined in the policy as "...an event, including continuous or repeated exposure to conditions, which result in Personal Injury or Property Damage neither expected nor intended from the standpoint of the insured." No mention was made of the date of loss or claim.

The court determined that the policy in question was an "occurrence" policy, which offered coverage for acts that had occurred during the policy period, as opposed to a "claims-made" policy that would have covered claims filed within the policy's duration.

The trial court's judgment was overturned, ruling in favor of the insured and against the insurance company. The policy was deemed applicable.

Jenoff, Incorporated, Appellant v. New Hampshire Insurance Company, Respondent. Minnesota Court of Appeals. No. C3-95-2409. April 2, 1996. CCH 1996 Fire and Casualty Cases, Paragraph 5653.