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Question: Our insured carries aCommercial Property Enhancement Endorsement, which provides $25,000of coverage for backup of sewers and drains. The cause of loss formis Special CP 10 30 10/12. The insured carries $250,000 of contentscoverage only.

A backup occurred, which required a plumber to tunnel60-feet below slab to make the necessary repairs. Underground pipesare not covered property, but under Additional Coverage Extensionsit says: “If loss or damage caused by or resulting from coveredwater loss occurs we will also pay the cost tear to out and replaceany part of the building or structure to repair damage to the system or appliance from which the water orother substance escapes.”

It would appear based on the language that we would owe forthe cost of the plumbing repairs, except for the repairs to thepipe itself?

— Virginia Subscriber

Answer: Based on our review of the CommercialProperty Enhancement Endorsement GLUK015(01/10), the coverage forback-up of sewers and drains does not have to occur from a problemwith the sewer system from off the insured's property.

The coverage applies if there is direct physical loss of ordamage to Covered Property caused by or resulting from water thatbacks up from a sewer drain (from any cause).

Therefore, the cost of the plumbing repairs, excluding the pipe, should becovered up to the $10,000 limit for backup of sewers or drains.(Note that the actual limit in the enhancement is $10,000, not$25,000).

Coverage for detached sewer line

Question: The insured has a BOP policyand purchased an endorsement that covers back up of sewer anddrains.

Upon inspection, I found no sewer or drain in the building,but the insured showed me a sewer 10-feet outside the back ofbuilding and said this sewer backed up into the building.

Nowhere in the policy or endorsement does itsay that the sewer or drain must be in the building, and since thesewer is located on the property, he insists coverage must beafforded. What do you think?

— Ohio Subscriber

Answer: We agree, if the policy doesnot require the sewer or drain to be in the building —the ISO endorsement does not — and if it can be shown that thebackup from the sewer caused the damage, it is our opinion thatcoverage should be afforded.

Water backup of sewer caused by flooding

Question: We have a water damage claim on a hazard policycaused by back up of sewer due to excessive flooding in the area.Is the damage from the sewer water covered?

The policy is an HO policy with the following language.Exception to C.(6) Unless the loss is otherwise excluded, we coverloss to property covered under Coverage A or B resulting from anaccidental discharge or overflow of water or steam from within a:(1) drain, or water, steam or sewer pipe, of the “residencepremises”….

Section 1 – Exclusions, 3. Water. This means: a. Flood,surface water, waves, including tidal wave and tsunami, tides,tidal water, overflow of any body of water, or spray from any ofthese, all whether or not driven by wind, including storm surge; b.Water which: (1) Backs up through sewers or drains; or (2)Overflows or is otherwise discharged from a sump, sump pump orrelated equipment…

— Texas Subscriber

Answer: The exception to C.(6) is for theoverflow or accidental discharge of water from a sewer pipe off theresidence premises. As such, you have an issue of fact; did thesewer pipe off premises cause the loss or was the loss caused dueto the pipes on the premises? Note that the water exclusions forsurface water and water below the surface of the ground do notapply to loss under C.(5) or (6). Remember that 5 relates tomold or fungus hidden behind walls, ceilings orfloors.

However, water that backs up through sewers or drains is clearlyexcluded, as is flooding. The insured would need to have added theWater Back-up and Sump Discharge or Overflow endorsement HO 04 95in order to have coverage.

Sewer or drain backup

Question: Our insured has a water backup orsump pump overflow endorsement on his homeowner's policy, whichstates the insurer covers direct physical loss caused by “water orsewage, which backs up from outside the residence premises plumbingsystem through sewers or drains.”

A heavy rainstorm occurred, and water enteredthe residence through the drain in the basement floor.

Because the insured has a radon remediation system installedin the drain, the engineer sent by the insurer reported that thewater must “have come into the drain system via the perforated pipeand the drain could not handle the flow. Thus the water backed uponto the basement floor.” The insurer then denied the claim, citingthe exclusion for water below the surface of the ground, and thenadding that the surface water below the ground entered into theperforated radon remediation system.

We think this is a covered loss and would like yourthoughts.

— New York Subscriber

Answer: The insured has paid an additionalpremium for backup of sewer and drain coverage, and it appears hisclaim is being denied based on a misreading of the endorsement language.

It does not really matter if the water entered the drainpipebecause the pipe was perforated; the water came from outside theresidence premises plumbing system and then forced its way upthrough the residence premises system by way of the basement drain.That is all that is necessary to trigger coverage. The drain'sinability to handle the flow (as per the engineer's report) ismeaningless — if this were the case then the insurer could deny anyloss, for which the insured has paid an additional premium, basedon the drain's inability to handle the flow. That is, after all,what essentially constitutes a water backup through a drain.

Backup of sewers and drains extension applicable togutters?

Question: Can backed up downspouts and gutters that causesinterior building damage be covered under a backup of sewers anddrains extension of coverage? The claims denial is based on thecontention that the downspout and gutter are not part of a plumbingsystem. The backup was caused by foliage and improperly installedgutter screws. My position is that the form does not say that thedrain must be part of a plumbing system, and a gutter and downspoutare part of a drainage system designed to move water away from abuilding.

— Ohio Subscriber

Answer: We agree. A gutter could be considereda drain, and if the policy does not specify that the drainmust be a part of a plumbing system, then a loss causedby the backup of gutters could be covered by an endorsement forbackup of sewers and drains coverage, provided there areno exclusions or limitations or other languagethat excludes gutters.

Surface water overflow not covered

Question: My insured has anendorsement for back up of sewer or drain water damage. Theendorsement reads “The following additional coverage is added: Wewill pay for loss or damage to Covered Property solely caused bywater that backs up from a sewer or drain. This coverage isincluded within the Covered Property Limits of Insurance. THIS ISNOT FLOOD INSURANCE. We will not pay for damage from water or othermaterials that back up from any sewer or drain when it is caused byany flood. Flood means the overflow of surface water, streams orother bodies of water, or their spray, all whether driven by windor not.”

Insured has a basement office that has a sump pump to keepground water out of the office. Recent heavy rains in northeast anda clogged water drain caused a pooling of water in a backcourtyard/parking lot which then flowed under the back door of theoffice. An adjuster inspected and noted that the drain was cloggedwith debris and the water then flowed under the door. This issurface water, but it would not have pooled if not for the cloggeddrain. The drain was not inside but was in the parking area behindthe building. Is this a covered loss?

— Ohio Subscriber

Answer: Because the damage was caused bysurface water, the loss would not be covered. There is a differencebetween water backing up from a drain, which the endorsementcovers, and rain water that pools because it cannot go down adrain that is clogged at the surface; the water must actually getinto the drain in order for it to backup from the drain.

As you correctly stated, the water in this situation is surfacewater, and the overflow of surface water is not covered.

Water backup due to treatment plant power outage

Question: We have an ISO form policy. HO 0003 04-91, special form. The town our insured is in sustained heavywet snows totaling about 16 inches.

This snow load caused numerous power outages. The power tothe waste treatment plant was out. This caused the pumps to stopworking thus causing the sewage to backup into our insured'shome.

There was no damage to the insured's home from thesnow, only the backup of sewage in the basement. They do NOThave the sewer backup endorsement. Is the peril a Power Surge,Weight of Snow or Backup of Sewage? Is there coverage for theinterior damage to the insured's home?

— Montana Subscriber

Answer: Neither power surge nor weight of iceor snow would apply in this instance.

Weight of ice or snow must occur on premises, and power failureis excluded when it occurs off premises.

This is a sewer backup, and even if another covered peril was atplay, the exclusion section is preceded by the anti-concurrentcausation language. So even then, the damage from the sewer backupwould not be covered.

Window wells and drainage

Question: Our insured has an HO-3 with a“Backup of Sewers and Drains” add-on endorsement. The endorsementsays, “We will pay up to $5000 in total for direct physical loss toproperty covered under Coverages A, B & C when such loss iscaused by water: 1. Which backs up through sewers or drains; or 2.Which enters into and overflows from within a sump pump, sump pumpwell or other type of system designed to remove subsurface waterwhich is drained from the foundation area.”

The insured has a basement window with a window well thatcontains a thick layer of pea gravel for drainage. Our argument isthat this is not “a system designed to remove subsurface water” andcoverage would not apply if water accumulates and runs through thewindow, or even through the foundation area. What is youropinion?

— ArizonaSubscriber

Answer: The purpose of a window well is to letlight and air into the basement, as well as serve as a way out inevent of emergency. If a window well was part of the drainagesystem, it would have to drain somewhere else. It is not part ofthe plumbing or sump system; it is a window well, pure andsimple.

See also:

Did snow, ice or water cause thedamage?

Water, water everywhere: Flood claim questionsanswered

After the flooding: 6 tips for vehicle owners andbuyers