Our client's business is insured under a standard businessowners policy. He contracted to have his roof changed from a flat rolled roof to a metal gable roof. This required the contractor to cut the roof edges to install a new sill plate on the exterior block walls so the new roof trusses could be properly secured. At the end of each day, the contractor covered the edge of the roof with tarps. During the construction, a windstorm ripped the tarps off the roof and allowed water to enter the building, doing over $400,000 damage to the contents.

The insurer investigated the loss under a reservation of rights. After the investigation, the insurer denied the claim based on policy language that requires a roof to be damaged before the policy covers water damage to the contents. The insurer's contention is that the tarps used to cover the roof are not part of the roof. Because the roof did not sustain any damage, there is no coverage for the water damage to the contents.

What is the coverage situation?

Pennsylvania Subscriber

The standard causes of loss form qualifies the windstorm or hail peril with language that eliminates coverage for loss or damage to the interior of a building — or its contents — unless the building first sustains damage to its roof or walls through which the rain enters.

A standard desktop dictionary defines roof as "the cover of a building;" "material used for a roof," and "something suggesting a roof: as a canopy of leaves and branches." Absent a specific policy definition, the insured is entitled to the broadest lay interpretation of the term.

In this case, the weighted tarp was acting as a substitute for the actual roof, and was, in fact, the roof at the time of the incident.

In a similar case, the Supreme Court of Oklahoma ruled that a canvas covering was a roof, Homestead Fire Ins. Co. v De Witt, et al., 245 P.2d 92 (1952). In this case, a construction company was building an addition to a school. In order to joint the new and old sections, an opening was left in the roof of the old building. The construction company covered the opening with canvas to protect the old building. A sudden windstorm arose, ripped off the canvas, and rain damaged the interior.

Even though this case preceded the "easy read" policies of today, it contained similar language that required roof damage before the insurer would cover water damage to the interior or its contents. The Supreme Court of Oklahoma ruled that because the contractors "evidently considered [as] adequate" the canvas that had been placed on the opening, this "brought it within the provisions of the windstorm clause, since except for the action of the wind, the opening was adequately closed." The canvas was a roof. This case has been cited numerous times over the years, and has not been overturned.

However, the California Court of Appeals, Second District, saw things differently. In Diep v. California Fair Plan Ass'n., 15 Cal.App.4th 1205 (1993), the Court said: "While 'roof' has many different meanings (e.g. roof of the mouth), dictionary definitions are consistent with respect to that which people usually expect to find on top of a building… We could go on, but a roof is commonly considered to be a permanent part of the structure it covers. Roof is not an ambiguous or vague word… The parties to the insurance contract could not have originally intended the result the plaintiff seeks here."

Ultimately, this may be a matter for the courts of your state to decide.