Policy exclusion bars sewage damage coverage: Court
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A policy exclusion that bars coverage for water that backs up or overflows from a sewer includes damage caused by the sewage carried into an insured property, the Ohio Supreme Court said Wednesday in overturning a lower court’s ruling.
In 2014, sewage from the local sewer system backed up into the Bank Nightclub in Akron, Ohio, which was insured by Bedford, Texas-based United Specialty Insurance Co., according to the ruling in AKC Inc., d.b.a. Cleantech v. United Specialty Insurance Co.
The bar hired North Canton, Ohio-based AKC, which operates as Cleantech, to clean up the site. After United Specialty refused to provide coverage, citing the exclusion, the bar assigned to AKC any claims it might have against the insurer, and AKC sued the insurer for breach of contract.
A trial court ruled in the insurer’s favor but was overturned by a state appeals court.
Water that backs up or overflows from a sewer is obviously going to contain sewage, the supreme court said in its 4-1 ruling. “In fact, there is no doubt that the average person purchasing insurance would understand this to be so,” it said.
“In light of the plain and unambiguous language in the policy before us, and the decisions of numerous courts across the country, the water-backup exclusion clearly includes damage caused by sewage and there is no coverage here,” the majority opinion said, in reversing the appeals court.
A dissenting opinion said, “If the exclusion was to have encompassed raw sewage backing up from sanitary sewers it could have specifically so stated.”
AKC attorney Emmett E. Robinson, of the Robinson Law Firm LLC in Cleveland, said in a statement, “I'm disappointed in the ruling and, especially, am disappointed that the Court provided so little analysis — and no textual analysis — in support of its holding. The law is clear that ambiguity is to be resolved in favor of the insured.”
An attorney for United Specialty did not respond to a request for comment.
