Earth Movement Exclusion Prevents Coverage for All Earth Movement

 

June 12, 2017

 

This week an appellate court in Michigan ruled that the earth-movement exclusion in a Businessowners Insurance Policy applied to all earth movements, and not just “natural” earth movement. The case is Home-Owners Ins. Co. v. Andriacchi, No. 331260 (Mich. Ct. App. June 8, 2017).

 

The insurance company, Home-Owners, provided a businessowners policy of insurance to Andriacchi. The policy in place covered risks of physical loss unless that loss is either excluded or limited as per certain sections of the policy. Early in 2014, Andriacchi filed a claim for damages to his building that occurred after major street repairs had been executed. A licensed engineer employed by Home-Owners determined that the cause of the observed structural damage was earth movement beneath the interior concrete floor slab. Home-Owners denied the claim because the policy included an exclusion to coverage for “any earth movement.” Andriacchi maintained that the earth movement exclusion that was listed in the policy applied only to natural earth movement, not to “man-made” earth movement, and if the words “any earth movement” were read in context with those surrounding them, the exclusion would be limited to natural phenomena. The trial court determined that “any earth movement means any earth movement” and ruled in favor of Home-Owners.

 

Andriacchi filed his claim of appeal and the appeals court determined that the trial court acted properly because the earth movement exclusion plainly excluded coverage for loss caused by “any” earth movement, and there is no material factual dispute that Andriacchi's loss was caused by earth movement. Although the word “any” is not defined in the policy, any is generally understood to be all-encompassing, meaning “every” or “all”. Thus, the trial court did not err in deciding that “any earth movement” means “every” or “all” movement of the earth without restriction or distinction of type.

 

Editor's Note: Although some courts have decided the opposite conclusion in the past thirty years, generally when a term isn't defined in the insurance policy, the standard used to determine the applicable definition is the dictionary definition. In this case, the dictionary definition of “any” restricts coverage for damages that occur during land movement. For previous court decisions that contradict this courts findings, see Rankin v. Generali-US Branch 986 S.W. 2d 237 (Tenn. Ct. App. 1998) and Winters v. Charter Oak Fire Ins. Co., 4 F. Supp. 2d 1288, 1293 (D.N.M. 1988).