Q

We insure a local country club on a businessowners policy (BOP) with special causes of loss. Recently, a pipe leading from the swimming pools broke and water was lost out of the pools.

The insurer has denied the claim, citing the provision that “[c]overed property does not include… Land (including land on which the property is located), water, growing crops, or lawns…”

We do not think that the water lost by our insured falls under this limitation. We would appreciate your opinion.

Pennsylvania Subscriber

A

The adjuster was incorrect to deny this loss because the property lost (the water) is “property not covered.” The use of the word “water” in this sentence must be read in context. It is being used along with other things that occur in nature — land, growing crops, and lawns. The “water” that is being described as not covered is naturally occurring water — such as a stream or a pond on the insured's premises.

The water that the country club lost due to the plumbing failure was the club's personal property. It had already passed through the water meter and the club was being billed for it. It is a covered loss under the BOP.