A New York state appeals court has rejected State Farm's effort to avoid paying damages from construction activity under a policy exclusion for "earth movement" generally linked to natural conditions.

The New York State Supreme Court Appellate Division First Department in Manhattan, ruling in the case of Deborah Lee vs. State Farm Fire & Casualty Co., rejected the insurance carrier's denial of a claim stemming from the collapse of a rental unit building as a result of nearby excavation.

State Farm had argued for an expanded interpretation of the so-called "earth movement" exclusion contained in most first-party property insurance policies.

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