Earth Movement Exclusion

 June 7, 2012

 Opposing Views: Any Movement versus Natural and Catastrophic

 Summary: Property policies generally exclude earth movement as a cause of loss. What constitutes earth movement for purposes of the exclusion? There are two views that have been developed in the courts: (1) damage only from natural and catastrophic earth movement is reached by the exclusion, or (2) any damage attributable to earth movement is excluded. The former is currently the majority position. Under this view, for example, damage caused by vibrations from passing logging trucks transmitted through the ground has been held covered; under the other position, such damage would be excluded. This discussion examines the case law regarding this issue.

Topics covered:

Introduction

 A standard feature of property insurance forms is the exclusion of loss associated with earth movement. The following, for example, is the earth movement exclusion clause (with the concurrent causation language lead-in) as found in the Basic, CP 10 10 06 07, Broad, CP 10 20 06 07, and Special, CP 10 30 06 07, Causes of Loss forms of the commercial property program of Insurance Services Office (ISO).

 B. Exclusions

1.We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.

b.Earth Movement

(1)Earthquake, including any earth sinking, rising or shifting related to such event;

(2)Landslide, including any earth sinking, rising or shifting related to such event;

(3)Mine subsidence, meaning subsidence of a man-made mine, whether or not mining activity has ceased;

(4)Earth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface.

But if Earth Movement, as described in b.(1) through (4) above, results in fire or explosion, we will pay for the loss or damage caused by that fire or explosion.

(5)Volcanic eruption, explosion or effusion. But, if volcanic eruption, explosion or effusion results in fire, building glass breakage or Volcanic Action, we will pay for the loss or damage caused by that fire, building glass breakage or Volcanic Action.

 The ISO Homeowners form HO 00 02 05 11 contains the following exclusion for earth movement:

      We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.

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