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New York Court docket Holds Protection for Excavation Injury Precluded by Earth Motion Exclusion

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In line with a current ruling by a New York appellate court docket, protection for excavation injury is precluded by the coverage’s earth motion exclusion. In 3502 Companions LLC v. Nice American Insurance coverage Co. of New York, Case No. 2021-03449 (N.Y. App. 1st Dep’t Apr. 21, 2022), an insured sued its insurer underneath a first-party coverage, alleging in its criticism that its property sustained injury as a direct results of excavation work at an adjoining lot.

Based mostly on the allegations within the criticism, the insurer filed a movement to dismiss, asserting that protection was precluded by the coverage’s earth motion exclusion. The exclusion precluded protection for “earth motion,” together with “earth sinking (aside from sinkhole collapse), rising or shifting together with soil situations which trigger settling, cracking or different disarrangement of foundations or different elements of realty,” and utilized “no matter whether or not [the earth movement] is attributable to an act of nature, man-made or is in any other case brought on.” In response to the insurer’s movement to dismiss, the insured filed an affidavit asserting that the property injury was additionally attributable to “the vibrations attributable to the development work,” a coated reason for loss.

The court docket held that the insured’s allegations positioned the injury to its property inside the earth motion exclusion. In doing so, the court docket rejected the insured’s rivalry that the criticism had to make use of the phrases “earth motion” for the exclusion to use, reasoning that an excavation, by definition, is “the intentional removing of earth by people.” The court docket additional held that, even when vibrations brought on the injury, the excavation was nonetheless a contributing reason for the injury, and the coverage acknowledged that there could be no protection for loss or injury attributable to earth motion “no matter another trigger or occasion that contributes concurrently or in any sequence to the loss.” Given the broad language of the earth motion exclusion, the court docket held it unambiguously encompassed property injury attributable to excavation work.

Based mostly on the court docket’s holding in 3502 Companions, property injury attributable to excavation work is precluded from protection by the earth motion exclusion. If the exclusion additionally accommodates an anti-concurrent causation clause, protection is precluded, even when a coated trigger contributed to the loss.    

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