Exclusion from insurance prohibits protection for sewage injury: court docket – firm insurance
An insurance exclusion that excludes coverage for water stagnant or overflowing from a sewer will cover damage caused by sewage diverted into an insured property, the Ohio Supreme Court said Wednesday as it passed a lower court ruling picked up.
In 2014, wastewater from the local sewer system entered Bank Nightclub in Akron, Ohio, which was insured by United Specialty Insurance Co., based in Bedford, Texas, according to the judgment in AKC Inc., d.b.a. Cleantech v United Specialty Insurance Co.
The bar hired AKC, based in North Canton, Ohio, which operates as Cleantech, to clean up the website. After United Specialty denied coverage, citing exclusion, the AKC Bar Association ceded any claims it could have against the insurer and AKC sued the insurer for breach of contract.
A court ruled in favor of the insurer but was overturned by a state appeals court.
Water that backs up or overflows from a sewer will obviously contain sewage, the Supreme Court said in its 4: 1 ruling. "In fact, there is no doubt that the average person who takes out insurance would understand it that way," it said.
"In view of the clear and unambiguous formulation of the policies before us and the decisions of numerous courts across the country, the exclusion of water reserves clearly includes damage from sewage and there is no cover here," the majority opinion in the appellate court said to be repealed.
In a dissenting opinion it says: "If the exclusion had included raw sewage from sewers, this could have been expressly stated."
AKC attorney Emmett E. Robinson, of Robinson Law Firm LLC of Cleveland, said in a statement: "I am disappointed with the verdict, and particularly disappointed that the court has provided so little analysis – and no textual analysis – in support of its hold." The law is clear that ambiguities should be resolved in favor of the insured. "
A United Specialty attorney did not respond to a request for comment.