Washington Supreme Court Interprets Ensuing Loss Exception in All-Risk Property Insurance Policy

Three judges sitting behind bench

The Supreme Court of Washington has recently offered its assessment of the standard “resulting loss” (or “ensuing loss”) exception in the case of Gardens Condo v. Farmers Rich Ins. Exchange.

May 20, 2024
David G. Jordan & William E. Phillips IV - Saxe Doernberger & Vita, P.C.

The "ensuing loss" clause is a provision that restores coverage for property insurance claims that are subject to certain policy exclusions, such as “faulty workmanship” and “faulty design.” It applies in cases where there is damage from a covered cause of loss that ensues, or results from, the excluded cause of loss. Courts across jurisdictions have grappled with interpreting the breadth of this clause, leading to varying conclusions regarding its scope and applicability. One of the primary challenges in interpreting “ensuing loss” lies in determining the ultimate cause of damage. Courts must ascertain whether the ensuing loss is sufficiently distinct from the excluded event to warrant coverage under the policy. This analysis often hinges on whether the cause of loss is thought to constitute a separate and independent occurrence or is merely a continuation or exacerbation of the excluded event.

Reprinted courtesy of David G. Jordan, Saxe Doernberger & Vita, P.C. and William E. Phillips IV, Saxe Doernberger & Vita, P.C.

Mr. Jordan may be contacted at DJordan@sdvlaw.com
Mr. Phillips may be contacted at WPhillips@sdvlaw.com


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