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New York Court: Broadly-Worded Flood Limit “Meaningless” Unless it Applies to Any Kind of Loss Caused by Flood

Yesterday in El-Ad West LLC v. Zurich American Ins. Co., 2015 WL 4078762, 2015 N.Y. App. Div. LEXIS 5753 (N.Y.App.Div., Jul. 7, 2015), a unanimous panel of New York’s intermediate level appellate court held that a flood sub-limit capped all loss caused by flood, without regard to whether it was physical damage to property or a “downstream” financial loss such as delay in completion.  In the words of the opinion, reading the contract of insurance in such a way as to find that the flood sub-limit did not apply to delay in completion losses “would render the flood limit meaningless with respect to that coverage.”  The panel thereby affirmed a Superstorm Sandy decision that we reported on in July of

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Posted in Builders' Risk, Delay in Completion, Flood, Superstorm Sandy

New York Court: All Sandy Losses, Including “Downstream” Financial Ones, Capped By Annual Aggregate Limit For Flood

Superstorm Sandy jurisprudence is starting to shed light on some unresolved issues in the effected states.  In El-Ad 250 West LLC v. Zurich American Ins. Co., — N.Y.S.2d —, 2014 WL 2931058 (N.Y.Cty., June 27, 2014), a New York court held last week that a $5 million annual aggregate limit of liability for losses caused by flood capped any recovery for all such loss, without regard to whether it was physical damage to property or a “downstream” financial loss such as delay in completion.  It was a case of first impression in New York. On October 29, 2012, the policyholder, El-Ad 250 West LLC, was converting an 11-story office building into a 12-story luxury condominium complex in lower Manhattan.  Superstorm

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Posted in Builders' Risk, Delay in Completion, Flood, Superstorm Sandy
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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