Nonmaterial Warranty Breach Does Not Void Coverage

January 30, 2012

Does a breach of a nonmaterial warranty void coverage? Insured had a sprinkler warranty, but fire was in another building owned by others and his business personal property was smoked up. Never any fire in loss location.

California Subscriber

Coverage would not be voided in this situation. The endorsement you provided states, "We will not pay for loss or damage caused by or resulting from fire…." However, the damage your insured suffered was smoke damage, which is a different peril than fire. If the insured did not maintain the sprinkler protective safeguard, and the warranty required such maintenance for a fire loss to be covered, then damage by smoke will not have any effect on the warranty.