Who among us has not wondered to what extent courts will enforce the extensive "known loss" provisions found in most CGLs these days? A judge in the U.S. District Court for Southern Florida recently denied summary judgment to an insurer that sought summary judgment on the duty to defend based on a number of policy provisions, including the pre-existing condition, or known loss, clause. This provision bars coverage where the insured knew of damage, in part or whole, before the inception of the policy period. As the skateboarder set says: Dude, Harsh!
In fact, the insured, a roofing contractor, was aware that the roof was leaking and causing interior damage before the policy period began. But, the court reasoned, the lawsuit by the homeowners against the roofing contractor alleged the homeowners suffered "mold related injuries" — apparently not expressly excluded by the policy. This, the judge said, was damage that the insured did not know about before the policy period began, and so, based on that allegation, the duty to defend existed. The case is Transportation Insurance Co. v. the Regency Roofing Companies, Inc.. Click here to read the case.
Hat tip to Law and Insurance, which keeps its eyes on coverage in the Lone Star State, and a few other places too.