A current California case involving a declare for a loss to frozen embryos caught my consideration.1 This just isn’t a “run of the mill” kind of loss. It can also be a superb case to remind policyholders that almost all owners insurance policies are written on a named peril for private property loss.
The lesson to recollect from this submit is that a typical H0-3 owners coverage covers solely “named perils” on contents and private property. An all-risk insurance coverage coverage that covers all dangers on each actual property and private property is an HO-5 coverage. The HO-5 coverage gives a lot higher protection for loss to contents and private property than the usual HO-3 coverage.
The case information are as follows:
Sherlene and Lawrence Wong (the Wongs) had saved some embryos at a facility that stored them in a cryogenic tank that failed to keep up the temperature essential to retailer the embryos, following which the Wongs’s [sic] fertility physician instructed them they need to think about the embryos ‘compromised’ and ‘no longer viable, and lost.’ The Wongs had a owners insurance coverage coverage with respondent Stillwater Insurance (Stillwater), a specified perils coverage offering that ‘We insure for direct physical loss to the property described in Coverage C caused by any of the following perils,’ occurring to listing 16 specified perils. The Wongs made a declare for property harm, which Stillwater denied.
The HO-3 type coverage supplied the next protection for private property:
We insure for sudden and unintentional direct bodily loss to property described in Coverage C brought on by any of the next perils until the loss is excluded in SECTION I – EXCLUSIONS.
SECTION I – PERILS INSURED AGAINST
1. Fire Or Lightning
2. Windstorm Or Hail
3. Explosion
4. Riot Or Civil Commotion
5. Aircraft
6. Vehicles
7. Smoke
8. Vandalism Or Malicious Mischief
9. Theft
10. Falling Objects
11. Weight Of Ice, Snow Or Sleet
12. Accidental Discharge Or Overflow Of Water Or Steam
13. Sudden And Accidental Tearing Apart, Cracking, Burning Or Bulging
14. Freezing
15. Sudden And Accidental Damage From Artificially Generated Electrical Current
16. Volcanic Eruption
The courtroom’s elementary ruling was that there was no proof of bodily loss brought on by a coated named peril. The courtroom famous the final legislation on this subject:
The Stillwater coverage was, as famous, a ‘specified perils’ coverage. According to the main California insurance coverage commentary, the importance of that is the insured has ‘the threshold burden of proving the loss was caused by a specifically-enumerated peril.’ …As our colleagues in Division One have described it, ‘in litigation, ‘ ‘… the burden is on the insured to prove that an event is a claim within the scope of the basic coverage.’ ’Only after ‘the insured shows that an event falls within the scope of basic coverage under the policy’ [citation] does the burden shift to the insurer to show the declare is particularly excluded…. ‘[F]or ‘named perils’ insurance policies … the insured bears the burden of proving the loss was brought on by the desired peril’].)
There is lots to this determination concerning proof of bodily loss which I’ll deal with in tomorrow’s weblog submit.
Today’s lesson is all the time to test if the non-public property is roofed on an all-risk versus named perils foundation. Policyholders buying insurance coverage ought to think about buying all-risk protection for contents below an HO-5 endorsement. Insurance brokers ought to all the time make this selection out there and recognized to their purchasers.
Thought For The Day
All the world is filled with struggling. It can also be stuffed with overcoming.
—Helen Keller
1 Wong v. Stillwater Ins. Co., No. A162893, — Cal.Rptr.3d —, 2023 WL 4285283 (Cal. App. June 30, 2023).