As can be easily witnessed as you drive around town, construction companies often use blasting, pile driving, dewatering and heavy equipment in the performance of large construction projects. Many times, damage can be caused to buildings on nearby properties due to the enormous amount of vibration generated by these activities. The question then becomes whether the cost to repair the damage caused by this vibration is covered under the property owner’s property insurance policy.
For many years, insurance companies sought to exclude coverage for such damage through the use of the “Earth Movement” exclusion found in most policies of insurance. Although the exact wording of the definition may change from policy to policy, the usual earth movement exclusion language is similar to the following:
- 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.
- Earth Movement, meaning earthquake, including land shock waves or tremors before, during or after a volcanic eruption; landslide, mine subsidence; mudflow; earth sinking, rising or shifting; unless direct loss by:
(1) Fire; or
The question as to whether coverage should be afforded to this type of damage was heavily litigated for many years, until the Supreme Court of Florida finally clarified this issue in the case of Fayad vs. Clarendon National Insurance Company, 889 So.2d 1082 (2005). After an in depth analysis of the issues, the answer finally given by the Florida Supreme Court was – “Maybe”.
In the Fayad case, the insured’s property had incurred a substantial amount of damage due to blasting activities taking place near their home. When the insureds presented a claim for this damage, their insurance company denied their claim based upon the insurance policy’s Earth Movement exclusion.
Ultimately, the Florida Supreme Court found that the subject insurance policy DID provide coverage for this type of loss and that the insurance company was responsible for the payment of the insured’s damages. The Court based its decision on the specific language of the subject insurance policy and the fact that the policy seemed to only exclude earth movement or vibration caused by a “natural event” as opposed to a manmade event. Specifically, the Court concluded:
We interpret Clarendon’s earth movement exclusion to exclude damage caused by earth movement arising from natural events from coverage rather than damage cause by earth movement arising from any cause, including man-made events such as blasting.
If the Supreme Court found that the policy covered this type of loss, why did I say that the Court’s ultimate answer was “Maybe”? The reality is that insurance companies tend to learn from their mistakes and many insurance companies have since re-written their policies to clarify their intention to eliminate Earth Movement caused by any event – including manmade events such as blasting. Therefore, if you believe you have damage to your property that may be the result of blasting, pile driving or other vibration activities, please contact our office so that we may review your situation and provide a free consultation as to your rights.