Fire Fighting Expenses as Property Damage

March 21, 2012

Our insured accidentally started a forest fire that caused damage to a third party's forest/prairie. It was government land, and the government did not make a claim for any property damage. However, the question is: are we obligated to pay the fire fighting expenses on behalf of our insured because they were expenses as a result of property damage? Or, conversely, would this be considered a purely economic loss as there is no property damage? Should the CGL form respond to paying only expenses to put out a forest fire? Thanks.

Wisconsin Subscriber

What the CGL form will pay is PD for which the insured is liable. But there has to be property damage as defined. As long as there is property damage as defined, the policy will pay all expenses that the insured is liable for and if that includes fire fighting expenses, then that is going to be covered. But, if there is no PD as defined, consequential expenditures like fire fighting are not going to be covered by the CGL form. So, the key is the occurrence of property damage as defined.

The CGL form applies to property damage claims. Property damage is a defined term on the CGL form and if the claim does not meet that definition, the CGL form will not respond. Property damage is physical injury to tangible property or loss of use of tangible property that is not physically injured. Fire fighting expenses by themselves do not meet the PD definition, so the CGL form is not going to pay those expenses.

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