With so many recent disastrous events taking place across the United States it is important for associations, businesses and all policyholders to understand that in a property insurance claim, the devil is in the details. Hearing generalizations from insurance professionals about what may be covered and what may be excluded is not nearly enough when putting together a damage claim. The detail work is in the particular facts, documentation of the event and damage, and sometimes most importantly, the language of the policy at issue.
It sounds like an elementary statement, but many associations, businesses and policyholders may have no desire to read the terms of their property insurance policy, or if they do venture to read it, find themselves lost in a maze of complex terminology. Being proactive and having a copy of the current policy readily accessible for review by insurance professionals is important too. That way, if there is a potential claim, insurance professionals can review the policy to appropriately answer questions about coverage.
For example, in Park Country Club of Buffalo, Inc. v. Tower Ins. Co. of New York, a golf country club association presented a business income claim to its insurer for loss caused by flood damage to its golf course sand traps. Whether the sand traps were covered property depended on the terms and definitions of the policy. An endorsement titled Security for Golf Courses—Golf Course Grounds and Outdoor Property modified the terms of the policy to include golf course sand traps within “Covered Property,” and the Flood Endorsement specifically indicated that the insurer would pay for damages to “Covered Property” caused by flood or surface waters. The court held that “the only reasonable interpretation of those endorsements is that the policy covers flood damage to plaintiff’s sand traps.”
This case brings the point home because it is clear that if the country club association and its professionals had not reviewed the endorsement forms that changed the standard policy language to include sand traps as “covered property” and provide coverage for flood damage to “covered property,” it may not have proceeded with a claim for the damages. Associations, businesses, individual policyholders and their claim professionals should all strive to go the extra mile in sorting through the details of their claim, documenting the claimed damages and reviewing policy forms.