Just Droppin’ By

It's the perfect time to find a nearby tree-shaded spot and spend a leisurely iced tea-fueled afternoon pondering the wondrous vagaries of insurance coverage. To prime your proverbial pump, here is just one such topic: Godzilla.

I thank editor Laura Mazzuca Toops for jumping on this topic (“4 Ways Insurance Might Respond if Godzilla Attacks,” propertycasualty360.com). A seemingly ludicrous case forces you to consider possible losses outside the typical. What kicked my insurance brain into overdrive was discussion of the damage potentially caused by “Godzilla droppings.”

Let's look at the current ISO Homeowners (HO 00 03 05 11) for possible coverage issues in case your living room turns into a lizard litter box.

• Damage: Severe. You think hail will shred a roof, imagine a hundred pound “dropping.”

• Coverage A: While I don't think Godzilla can be classified under the “birds, rodents or insects” exclusion, I'm not so sanguine to think that the “discharge or release of waste products or secretions, by any animals” is not going to kill the claim. There is an exception to that exclusion for damages arising from overflow of water or steam from specified sources, but the bottom line is the insured is going to be in real trouble trying to collect for buildings and structures.

• Coverage C: Here we find one of those infamous occasions when the named peril actually proves superior to special causes of loss. While there may be some topics where emotion clearly has overruled common sense (certificates and hold-harmless agreements, anyone?), you cannot simply “wish away” clear and unambiguous form wording. The “waste/secretion” exclusion applicable to Coverage A does not exist in Coverage C. So the only question is whether there is a named peril that applies. I say yes—No. 10: Falling Objects.

• Coverage D: Because this kicks in if the claimed damages arise from “a loss covered under Section I,” it doesn't matter if Coverage A excludes it, because Coverage C provides coverage.

Section I: Exclusions that may apply

• Earth movement: Nope, the movement we're discussing is less “earth” and more “bowel.”

• War: Even with the disclaimer that “discharge of a nuclear weapon will be deemed a warlike act even if accidental,” this only refers to damages caused by the specified scenarios.

• Governmental action: The damages were not caused by the order of governmental or public authority.

• Nuclear hazard: One can argue that every event of the movie, including all damages, arose from events as specified in the Nuclear Hazard Clause: “Nuclear Hazard means any nuclear reaction, radiation or radioactive contamination, all whether controlled or uncontrolled or however caused, or any consequence of any of these.” (Emphasis mine.) A broad brush, I grant you, but for a carrier seeking any port in the policy storm on which to hang a total coverage denial, this at least offers intriguing potential.

4 Ways Insurance Responds if Godzilla Attacks

Godzilla's latest incarnation in this spring's movie has shed new light on the damage the old lizard wreaks—this time on San Francisco. The Golden Gate Bridge is uninsured, according to Bill Stafford, director of risk management and safety for the bridge. Theoretically, four types of coverage come into play if Godzilla attacks: business interruption, homeowners' insurance, TRIA and auto coverage, which can be either comprehensive or collision depending on the attack.