The loss in question is not appropriately denied in its entirety for several reasons. First, the concurrent causation language of the ISO CP 10 30 (current edition as of 1996) policy section B. Exclusions, clause 1. cannot be read in connection with section B. Exclusions clause 2. The concurrent causation language {“Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”) refers to the clause 1. exclusions only. These consist of the ordinance or law, earth movement, government action, nuclear hazard, off-premises services, war and military action, and water damage exclusions.

The lead-in language to section B. Exclusions, clause 2. reads differently (“We will not pay for loss or damage caused by or resulting from any of the following:”). This is not concurrent causation language; in fact, this was the original lead-in to both B. sections 1. and 2., which was changed because of the development of the concurrent causation doctrine.

The concurrent causation language does not apply to this second set of exclusions. Therefore, if mechanical breakdown causes damage not otherwise excluded to something other than the item mechanically breaking down, the subsequent damage is covered. In this case, the loss to the air conditioning system was not caused by mechanical breakdown, but instead was due to freezing resulting from the mechanical breakdown. The failure of the solenoid may have set the stage, but it did not cause the loss. Freezing did.

The mechanical breakdown exclusion (B.2.d.(6)) does not apply to the entire damage described in your situation, but only to damage caused directly by mechanical breakdown – in this case, the “pump-down solenoid.” The rest of the damage done to the system did not occur as a result of mechanical breakdown, but instead was caused by freezing. Without the concurrent causation language of B.1., there is no reason to apply the mechanical breakdown exclusion to any damage other than the damage to the part of the system that failed.

By way of example of how the “mechanical breakdown” exclusion works, apply these facts to a peril other than freezing. Suppose that the breakdown of the solenoid caused heat to build up and the entire building burned down rather than damaging just the components of the air conditioning system. The insurer could not deny the claim for the fire damage due to the mechanical breakdown of the solenoid.