Valuable Articles Coverage for the Loss of Wine

We insure a wine collection under a valuable articles policy. It is an all risk policy, offering coverage against physical loss if the valuable articles are lost, damaged, or destroyed. There are several exclusions on the policy, including one for wear and tear and deterioration; this exclusion has an exception for an ensuing covered loss.

The corks in several bottles deteriorated and when the corks went bad, the wine spilled out of the bottles. We think this is a covered loss but the insurer says that the wine deteriorated as the corks went bad. What is your opinion?

Maryland Subscriber

The answer to this depends on how the wine was lost. If the wine simply evaporated or spoiled over time because the corks deteriorated and allowed air to impact on the wine, that is a loss that would be excluded from coverage. But, if the wine spilled out because the corks fell apart or fell out of the bottles, that is a covered loss. Based on your description of the loss, the corks deteriorated over time, but the loss of the wine was an ensuing loss due to spillage, and that is specifically made an exception to the exclusion. We believe that the loss is covered.