Sinkhole Collapse under Commercial Property Form

Q

Our insured's building is covered by the building and personal property form (CP 00 10 04 02), with special causes of loss (CP 10 30 04 02). The building has a system of pipes that divert water runoff from the roof into a retention basin. Suppose that one of the pipes breaks, and the water runoff erodes the underlying limestone, causing the building to collapse in the hole created. Is this event covered by the policy as “sinkhole collapse?” We are concerned that the retention basin might be seen as “man-made,” thus excluding coverage for collapse.

New Jersey Subscriber

A

The commercial property form defines “sinkhole collapse” as the “sudden sinking or collapse” of land into a hole. The hole is one “created by the action of water on limestone or dolomite.” The source of the water is not material to the definition.

Collapse into underground, “man-made. . .cavities” is outside the definition of “sinkhole collapse.” Thus, collapse into a mine shaft or other man-made holes would not be covered.

A standard desk-top dictionary defines “man-made” as “manufactured, created, or constructed by man.” Those three very active verbs in the definition preclude the notion that a thing can be “man-made” by accident. An accidental water spill that causes a building to collapse into a sinkhole is covered. Again, the source of the water does not matter.

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