Our insured is an engineering firm covered under a businessowners policy (Form BP 00 02 06 89). The facts of the loss are not in dispute. The insured stored test kits in a refrigerator. As one of the employees used the refrigerator, they apparently hit the dial, causing the refrigerator's temperature to drop below freezing. As a result, the liquid in the test kits froze, shattering their glass containers and ruining all twelve kits.

The insurer maintains that the loss is not covered. They cite Exclusion 2.d.(7) (b) as applying in this instance. This excludes, in addition to other perils listed in exclusion category 2, changes in or extremes of temperature. We feel that the loss should be covered, since it is not excluded. The exclusion cited relates to maintenance types of loss. We go a step further and say that the change in temperature was not the cause of the loss. In fact, the cause could also be said to be freezing. It is interesting to note that the concurrent causation language does not apply to this exclusion. It applies only to exclusions listed under exclusion category 1.

Vermont Subscriber

We agree that the exclusion referred to by the insurer is maintenance exclusion. Exclusion category 2, called Maintenance Types of Loss in the 1988 edition of the form, was renamed in the 1992 edition as the Other Types of Loss exclusion to reflect that not all the exclusions in the category pertain to maintenance. Nonetheless, losses excluded in exclusion category 2 caused by such perils as wear and tear, corrosion, smog, settling and cracking, and mechanical breakdown are losses that can be expected to happen over a period of time and should be anticipated by the insured.

The loss in your case was directly caused by the freezing of the liquid, which was due to a change in the ambient temperature of the refrigerator, a result of an accidental bumping of the temperature control dial. The proximate cause of the loss was the accidental bumping of the dial, which immediately set the other causes into inevitable action. The excluded cause of loss, temperature change, was only one in a series of perils that led to the loss. It was not the direct cause of loss, because if the liquid had been in half-full metal vials, the freezing, as far as we know, would not have resulted in a loss. The temperature change itself did not directly destroy the test kits as it would in causing butter to go rancid or eggs to spoil.

This argument is bolstered by the absence of the concurrent causation wording, which is present in exclusion category 1. This limiting wording reads as follows: “Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” Thus an excluded flood, caused by a negligent dam caretaker who forgot to close the dam, cannot be covered under the peril of caretaker's negligence, which is not excluded.

With reference to exclusion category 2, the loss of the testing kits was caused concurrently by the unexcluded accidental bumping of the dial, the excluded peril of temperature change, and the unexcluded peril of freezing liquid.