This article discusses the evolution of the meaning of vandalism through case law

Topics covered: What does vandalism to property encompass? Conditions and exclusions Theft and burglary exclusion Vacancy and unoccupancy Malicious fire and explosion Consequential damage Other notes

What Does Vandalism to Property Encompass?

The term vandalism can be traced to ancient Rome, where in 455 A.D., a Germanic tribe called the "Vandals" destroyed many of the city's monuments and works of art. . . Consequently, vandalism was traditionally used only in reference to works of art and kindred things of beauty. Over time the term evolved to encompass the destruction of any real or personal property.

A Georgia appeals court, in General Accident Fire & Life Assurance Corp. v. Azar, 119 S.E.2d 82 (Ga. App. 1961), is the narrow, historical meaning (i.e., destruction of things of beauty) to the term vandalism. In this case, children threw rocks on the roof of a warehouse and the contents were subsequently damaged by rain. The court stated, "Where children engage in acts such as the record discloses, there is willful or malicious destruction within the definition in these insuring agreements."

The same reasoning was followed by a Louisiana appellate court in Lanza Enterprises, Inc. v. Continental Ins. Co., 142 So. 2d 580 (La. App. 1962). In this case, persons unknown turned on a faucet attached to a hose in a building under construction and a number of floors were flooded and damaged. The court held that the loss was covered and dismissed the insurer's contention that the policy required proof of malice directed against the property owner personally. In King v. North River Ins. Co., 297 S.E.2d 637 (S.C. 1982), a South Carolina court stated that "vandalism in a comprehensive fire insurance policy should not be construed to apply only to a hostile or willful destruction, but should be extended to its popular meaning." The court said that malice may be inferred from the unlawful act itself and need not amount to ill will or vindictiveness. In the case of Herod v. Colorado Farm Bureau Mut. Ins. Co., 928 P.2d 834 (Colo. App. 1996), the court followed similar reasoning, when it found that "malice may be inferred from the act itself" and that vandalism could entail a disregard of the rights of others. In this case, a piece of rental property was taken apart by the tenants to the extent the dwelling was condemned and had to be demolished.

Conversely, lack of evidence of any malicious intent has led some courts to declare that a willful act does not of itself constitute vandalism or malicious mischief even though damage to another's property results. Two such cases are Larson v. Fireman's Fund Ins. Co., 139 N.W.2d 174 (Iowa 1965), and Frontier Lanes v. Canadian Indemnity Co., 613 P.2d 166 (Wash. App. 1980).

In Larson v. Fireman's Fund, the owner of a turkey farm attempted to recover for loss of 2,000 birds after a low-flying aircraft panicked the flock, causing them to crowd together and smother. Though the insurance was for loss caused by vandalism and malicious mischief, the case turned upon the meaning of malicious mischief. (Vandalism was not brought up for consideration.) The unidentified pilot had clearly violated the Civil Aeronautics Board rules against low-level flying of aircraft, but the Iowa Supreme Court held that malicious mischief required proof of malicious intent.

Frontier Lanes involved the collapse of a bowling alley roof after cans that had been thrown onto the roof blocked a downspout and caused an accumulation of rainwater. The insured contended that the throwing of cans onto the roof was an act of vandalism constituting the efficient proximate cause of the roof's collapse. The court rejected the insured's argument on two grounds: (1)  the damage was not a direct loss by vandalism since "neither the throwing of the cans nor the cans themselves were the immediate physical cause of the roof's collapse;" and (2) apart from the question of causality, the throwing of the cans onto the roof was not an act of vandalism or malicious mischief within the policy definition of these terms. The court held that property has been damaged 'willfully and maliciously' if the damage results from an intentional act from which damage was reasonably expected to result." The court determined that, even if the cans were thrown on the roof intentionally, they could not have been thrown "with the expectation that damage to (the insured's) building would result."

However, another court pointed out that intent is only half of the equation in Sharplin v. Casualty Reciprocal Exchange, 628 So.2d 217 (La. App. 1993). Arthur Sharplin sold a building to Robert and Mildred Johnson, which created a mortgage on the property in favor of Sharplin. The Johnsons filed for bankruptcy and eventually were required to relinquish the property to the bankruptcy trustee. When Sharplin examined the property, he found that it had been stripped of improvements he had added, such as doors, carpet, a water heater, paneling, and insulation. While the court agreed that the Johnsons had "a motive for committing intentional malicious acts," it also said that the removal of the building's component parts did not fit with the policy's definition of vandalism, which applied to willful destruction and damage.

Conditions and Exclusions

In addition to the provisions of the controlling policy, vandalism or malicious mischief coverage is subject to a variety of special conditions, depending on the type of policy to which the insurance is attached. These provisions must be carefully inspected in light of the particular coverage form or endorsement under consideration. For example, under the commercial property forms, vandalism coverage does not extend to loss or damage to glass (other than glass building blocks) that is part of a building, structure, or an outside sign. It also does not apply to loss or damage caused by or resulting from theft, except for building damage caused by burglars breaking in or exiting. Another standard provision is that, if the building becomes vacant for a certain length of time, coverage for vandalism is excluded. The last two conditions—building damage caused by burglars and vacancy—are discussed in the next sections.

Theft and Burglary Exclusion

As noted previously, vandalism or malicious mischief coverage excludes loss by theft (and this term can be extended to include burglary, pilferage, or larceny). In the past, much discussion resulted from the exclusion—was any part of a loss happening on the same occasion as a burglary excluded, or should the loss be sorted out, so to speak, with that part caused by burglary eliminated and that part caused by willful destruction covered? The classic illustration is thieves wrecking the place out of sheer meanness or in frustration at their failure to find valuables or their inability to get at them. Does the exclusion eliminate recovery altogether, or does the vandalism or malicious mischief coverage pay for all of the damage to insured property except that which has a clear, functional relation to the act of burglary, theft, or larceny?

Property forms today make an exception to the exclusion of damage caused by or resulting from theft in relation to the vandalism coverage. The insurer will pay for building damage caused by the breaking in or exiting of burglars. So, this provision attempts to settle the argument by at least clearly allowing recovery for building damage certain to accompany a burglary. Burglary means "the act of breaking into a building." This modification may have improved the situation for the owner of premises rented to others who would not ordinarily be carrying burglary or theft insurance; but, it did not address the basic question, at least, for those who take the position that the exclusion must be interpreted as applying only to so much of the loss as is directly due to pilferage, theft, burglary, or larceny.

In State Auto Mutual Ins. Co. v. Trautwein, 414 S.W.2d 587 (Ky. App. 1967), a Kentucky court called damage to a building and theft of four air conditioners affixed to it "willful and malicious physical injury to or destruction of a building". The insured recovered the entire loss since the form covered willful damage to the building as an exception to the exclusion of loss by pilferage, theft, burglary, or larceny.

A similar conclusion was reached in United States Fidelity and Guaranty Co. v. Bimco Iron & Metal Corp., 464 S.W.2d 353 (Tex. 1971), where burglars dismantled and destroyed the electrical system of a building and removed wire and transformers. The court found the entire loss, including the theft, to be damage to the building caused by burglars and hence covered.

Another court ruled that the theft exception to coverage for vandalism did not exclude vandalism damage that occurred prior to or concurrently with a theft in Haas v. Audubon Indemnity Co., 722 So.2d 1022 (La. App. 1998). In this case, intruders removed pipes and wires from a vacant building. Citizens in the area complained that they had no water, and the City discovered that the main water valve had been shut off. When the water main was turned on again, the building was flooded. The court said that the acts of vandalism were not diminished by the theft and that the "theft damage is a narrow exception to the vandalism coverage. It is not an independent exclusion." The loss did not arise solely from theft, and because of the destruction wreaked on the building, the acts were considered to be vandalism.

However, a California court of appeals subsequently expressed a different view. In Pryor v. State Farm Fire & Casualty Co., 141 Cal. Rptr. 394 (1977) the court rejected the Trautwein and Bimco findings under similar circumstances. Here, burglars removed built-in appliances and carpeting from three houses under construction. Applicable insurance policies included coverage against vandalism and malicious mischief, with wording similar to that in the Trautwein case. But here, the court distinguished between theft of building items (excluded) and willful damage to the building (covered) in awarding recovery only for the cost of repairs to cabinetry, walls and floors damaged by the burglars in removing the property, and the cost of installing the replacements for the stolen property, but not the value of the stolen property itself. Thus, the California court made a distinction not made in either the Trautwein or  Bimco cases between theft of building items and other kinds of willful building injury or damage, finding coverage only for the latter.

Intent was an important factor in the court's decision in Smith v. The Shelby Ins. Co., 936 S.W.2d 261 (Tenn. Ct. App. 1996). Electrical wiring, pipes, and condenser coils in an air conditioning system were removed from the insured's building by unknown persons, presumably to take out copper. The building was extensively damaged. The court said that the parties clearly intended to exclude such loss as theft and that the policy's definition of vandalism did not apply because the thieves did not maliciously damage the building. The court stated, "A thief enters a building in order to steal something; certainly a thief's primary focus is not the malicious defacing, destroying, or damaging of property. If the motivation and end result is that of theft and claimed loss is '[c]aused by or result[s] from [that] theft,' there is no coverage."

These cases leave another question unanswered—does the specific coverage of damage by burglars to a building automatically rule out malicious damage to contents by burglars? The current commercial property forms do not address the contents question and it is reasonable to exclude such damage at first blush. However, the parties concerned must still sort out the loss. Was this item damaged by vandalism or was the damage caused by the theft? Can the loss can be apportioned to a specific cause and paid accordingly?

At least one court decision applies to the situation—Cresthill Industries, Inc. v. Providence Washington Ins. Co., 385 N.Y.S.2d 797 (1976). The court took the position that the exclusion of loss by pilferage, theft, burglary, or larceny prevents a person from maintaining that theft of personal property is an act of vandalism. The court further stated that if an insurer were permitted to exclude all losses by pilferage, theft, burglary, or larceny, a person could never recover for a vandalism loss inside the premises because one who unlawfully enters a building to commit a crime would be considered a burglar. It was therefore the court's viewpoint that the parties to the contract could never have intended such an absurd result.

The insured, in this case, leased a portion of the ground floor of a three-story warehouse for the storage of his merchandise. Burglars broke into the unoccupied third floor, severed the water pipes, left the water running, and took the fixtures. The water eventually entered the first floor in sufficient quantity to damage the insured's merchandise.

The insured's policy covered the perils of fire, extended coverage, and vandalism or malicious mischief. The insurer agreed under its policy to provide coverage against direct loss by vandalism and malicious mischief—meaning only willful and malicious damage to or destruction of the covered property, subject to the exclusion of loss by pilferage, theft, burglary, or larceny, except willful damage to the covered building caused by burglars.

The claim was denied by the insurer for the following reasons: (1) loss was not brought about by vandalism or malicious mischief and, therefore, was not a direct loss; (2) the perpetrators' intent was not to damage the insured's property but solely to steal pipes and fixtures from the third floor of the building; (3) the specific cause of loss was not vandalism or malicious mischief but remote burglary and theft; (4) the policy excluded loss by pilferage, burglary, theft, or larceny, except willful damage to covered buildings by burglars, and no claim was made for building damage.

The insured, on the other hand, maintained that loss was covered because (1) the cause of damage was the severance of pipes and fixtures prior to their removal; (2) such severance constituted an act of vandalism or malicious mischief within the policy definition; (3) the flow of water resulted in direct loss to insured property, rather than consequential loss; (4) the theft of pipes and fixtures after their severance would not activate the exclusionary provision because the acts of vandalism occurred prior thereto; and (5) the exclusion, as written, was unclear and should be interpreted in favor of the insured.

The lower court found for the insurer, stating that the willful damage was not to the insured's property, but to the plumbing fixtures, which were some distance away. The origin of loss also was the result of burglary and larceny, which were excluded except for damage to a covered building, and no such damage had occurred.

However, part of the reason the court overturned the decision was based upon a similar set of circumstances and identical policy provisions in the case of Beauty Supplies, Inc. v. Hanover Ins. Co., 526 S.W.2d 75 (Mo. App. 1975). The court in that case held that there was a burglary (entry into the second floor of the building), an act of vandalism (severing of water pipes that ultimately damaged property of the insured-tenant on the first floor), and theft (of the pipes). From that court's viewpoint, water damage to the insured's property was directly caused by an act of vandalism, notwithstanding an excluded peril (burglary).

The court reasoned that vandalism, a specifically insured peril, was the predominating, efficient cause or proximate cause because it produced the resulting damage to the insured. Burglary, on the other hand, was considered to be an antecedent contributing circumstance, and not the proximate cause because it merely set the stage for the later event of vandalism. The court explained  the meaning of an antecedent contributing circumstance by comparing it to a person who lights a match in a gas-filled room and an explosion results. The explosion is the proximate cause and the lighting of the match is the antecedent contributing cause. Theft of the pipes was considered to be an independent concurring cause because that act did not cause damage to the insured's merchandise.

Applying the facts of the Beauty Supplies case to the one under consideration, the court stated that to establish coverage, the insured must overcome three major obstacles: (1) the act of vandalism must be within the meaning of the policy; (2) vandalism must be the proximate cause resulting in direct loss to the insured's property; and (3) the policy exclusions (such as pilferage and burglary) must be inapplicable.

Taking the first obstacle, the court held it undeniably clear that the severing of pipes and fixtures prior to their removal constituted a completed act of vandalism even though the pipes were ultimately removed from the premises. The policy, in fact, made this point clear because it excluded loss by pilferage, theft, burglary, or larceny, but it did cover willful damage caused by burglars.

The second obstacle—whether loss by vandalism was considered as being the result of a direct loss to insured property—was more difficult for the court to consider. While the policy precluded coverage against acts of vandalism not made directly to property of the insured, the court still found for coverage on the basis of wanton conduct, that is, conduct marked by or manifesting heedless disregard of justice or of rights of others.

The third obstacle—whether the policy exclusions in question applied to bar recovery—was a burden of the insurer to prove. The court held here that the insurer failed to prove that the meaning it attached to those exclusions was the only one that could apply fairly.

Vacancy and Unoccupancy

In the past, a standard condition of vandalism or malicious mischief insurance suspended coverage after thirty days during which the property was vacant—devoid of both contents and occupants. Comparable periods of unoccupancy—occupants gone but contents remaining—did not affect the coverage. Ultimately, however, unoccupancy was accorded the same treatment as vacancy. The appropriate language was subsequently introduced and lack of occupants for periods longer than thirty days had the same suspending effect on vandalism or malicious mischief insurance that total vacancy alone once had.

Current property forms are worded differently. The vacancy clause states that if the building where loss or damage occurs has been vacant for more than sixty consecutive days before the loss, the insurer will not pay for any loss or damage caused by vandalism. The clause then defines a vacant building as one that does not contain enough business personal property to conduct customary operations. Thus, the definition of vacancy (as provided in the form) has been expanded to limit coverage for buildings that are not completely devoid of either contents or occupants. Buildings under construction or renovation are specifically exempt from the vacancy provision; such buildings are not considered vacant.

Is there a similar exemption for buildings under reconstruction? This was an issue pointed up by a case before the Colorado court of appeals—Aetna Casualty & Surety Co. v. Transamerica Title Ins. Co. of Colorado, 480 P.2d 585 (Colo. App. 1970). The insured had purchased fire, extended coverage, and vandalism or malicious mischief insurance on his building. There was a fire causing extensive damage requiring nine months for repairs. Six months later, while the fire damage was being repaired, there was a vandalism loss of nearly $33,000. The insurance company denied coverage on this loss because the building had been vacant for more than thirty days. The insured argued that the building was vacant because, as the insurer knew, it was incapable of being occupied and that under the circumstances the vacancy provision of the vandalism agreement was inoperative.

The court found that cases touching on vacancy restrictions during the time of repairs of a previous insured loss are few. None deals specifically with vandalism damage, most being concerned instead with a second fire loss occurring at a time when the period of vacancy can be said to have voided the fire coverage. In what seems to be the earliest case, Lancashire Ins. Co. v. Bush, 82 N.W. 313 (Neb. 1900), the Nebraska Supreme Court ruled in favor of the insured on the same point raised by the Colorado insured—the vacancy restriction cannot apply to a building that the insurance company knows is incapable of being occupied.

In 1913, however, a New Jersey court rejected the reasoning of the Nebraska court. In Kupfersmith v. Delaware Ins. Co., 86 A. 399 (N.J. Err. & App. 1913), the court said the language of the policy is clear—vacancy beyond a stated period of time voids the coverage, regardless of the cause of the vacancy.

A United States court of appeals was the next to consider the problem in American Central Ins. Co. v. McHose, 66 F.2d 749 (3d Cir. 1933). The court agreed with the Nebraska court and rejected the New Jersey reasoning favoring the insurance company. This court said that the New Jersey court was correct that it is not the business of the courts to rewrite the policy contract when there is no ambiguity in the language. Nevertheless, the court said that the implications of the contract must be examined and given proper weight alongside its bare language. The provision that voids coverage if the building is or becomes vacant implies, according to the court, that the building is inhabitable in the first place.

The court, after reviewing these earlier decisions, agreed with what was believed to be the majority view—"it would be unreasonable to require the insured to occupy a building known to be uninhabitable by both parties in order to hold the insurer liable. Coverage was found for the insured."

A similar finding, exempting a building under reconstruction from the vacancy clause, was handed down in Brouillette v. Phoenix Assurance Co., 340 So. 2d 667. This case involved a house being reconstructed at a new site. Using a bulldozer, the insured's brother intentionally pushed the house off its new foundation and the court declared that the insurer knew the insured could not inhabit the house at the time of the damage by the brother, so the vacancy clause was not operative.

In another case, Poland v. Philips, 371 So. 2d 1053 (1979),  the court rejected an insurer's attempt to use the vacancy of an insured warehouse, even though it extended well beyond the time limitation specified in the vandalism or malicious mischief limitation, as grounds for denying a vandalism claim. The court found that the policy in question had been issued with full knowledge on the part of the insurer that the building was vacant. The time limit operates, the court said, "upon a premise that the building would not be insured if it were vacant." For this reason, the court ruled that an insurance policy may not be issued on a building known to be vacant and then be voided solely on the grounds of the building's vacancy.

Malicious Fire and Explosion

Fire damage caused by vandals is usually covered under the standard fire cause of loss, just as explosion damage caused by vandals is protected as part of the explosion cause of loss; vandalism or malicious mischief insurance need not be involved. This may vary, however. See, for example, the current ISO homeowners policy.

Explosion of steam boilers and certain other objects owned or controlled by the insured is excluded and the presence of vandalism or malicious mischief insurance does not alter the situation. It can be noted that malicious damage, other than explosion—such as the smashing of a boiler's plates—is covered by vandalism or malicious mischief insurance if the boiler or machinery qualifies as insured property within the terms of the policy offering coverage for such property.

Consequential Damage

Vandalism or malicious mischief insurance, like other covered causes of loss on property forms, was historically subject to an exclusion of loss resulting from temperature or humidity. If the insured wished to have protection against consequential losses like freezing or spoilage caused by vandals damaging on-premises heating or refrigeration equipment, underwriters customarily added that coverage by endorsement for an additional premium.

In the current commercial property program, Insurance Services Office eliminated the exclusion from all building and personal property forms that contained it. Consequently, those forms now cover losses involving change in temperature or humidity as long as the proximate cause of loss is vandalism or malicious mischief. An example of covered loss is freezing damage resulting from vandals damaging or merely turning off the heating equipment of a building. Freezing caused by vandals interrupting power away from the insured premises is still excluded, incidentally, because of the off premises power interruption exclusion in the property forms.

Some jurisdictions have adopted the doctrine of efficient proximate cause, which allows recovery when a covered cause of loss sets in motion an unbroken chain of events that produce a loss for which recovery is sought. The initial cause—the efficient proximate cause—must be covered by the policy for recovery to be allowed.

Some policies contains specific language to bypass the doctrine. For instance, in TNT Speed & Sport Center, Inc. v. American States Ins. Co., 114 F.3d 731 (8th Cir. 1997), the court said that vandalism contributed to a loss when vandals removed sandbags from a levy, causing the Mississippi River to flood the insured's property. However, the policy excluded direct or indirect water loss or damage, "regardless of any other cause or event that contributes concurrently or in any sequence to the loss." The court said that the phrase clearly showed the intent "to contract out of efficient proximate cause doctrine," and that the exclusion precluded coverage for the water damage.

Other Notes

Note that vacancy is defined in standard policies providing vandalism or malicious mischief coverage as when a building does not contain enough business personal property to conduct customary operations. Thus, it is no longer possible to argue that the mere presence of some kind of contents saves the building from being vacant; the contents must be such as to enable the insured to conduct customary operations of his business.

Coverage may be extended during a period of vacancy through use of endorsement CP 04 50 07 88. This states that the vacancy loss condition does not apply to direct physical loss or damage at the locations and during the time periods scheduled on the endorsement. The rules limit this extension of coverage by not allowing the period of coverage to extend beyond the anniversary date of the policy. This endorsement obviously applies to vandalism coverage, thus allowing such coverage for a vacant building if this is acceptable to all interested parties. However, it should be noted that, if so indicated on CP 04 50, this vacancy permit could be written so that it would not apply to the vandalism cause of loss; thus, if an underwriter chose not to insure against vandalism losses in a vacant building while at the same time insuring other causes of loss, this endorsement would enable the underwriter to do so.

Vandalism is provided automatically by the property coverage forms, but it can be excluded by use of CP 10 50 07 88. This endorsement applies to all the causes of loss forms and simply excludes loss or damage by vandalism of the described property. This endorsement is basically an underwriting tool to be used if the vandalism exposure is too severe under the guidelines of the underwriter. Such an exposure can be excluded and the rest of the risk can be covered. This enables the underwriter to follow his guidelines while writing the business and lowers the premium paid by the insured.

Both the causes of loss-broad form (CP 10 20 10 12) and causes of loss-special form (CP 10 30 10 12) offer collapse as an additional coverage as long as the collapse is caused by, among other things, vandalism. Thus, if vandals destroy a building to the extent that it collapses, these forms would apply.

CP 10 30 also covers loss or damage to property in transit if such loss is caused by vandalism. The coverage is limited to $1,000 and any property damaged must be the personal property of the named insured and must be in a motor vehicle owned, leased, or operated by the named insured. Also, the loss must occur in the covered territory.