US court refuses ‘collapse’ cover for decayed building

Patrick Bracher from Norton Rose Fulbright.

A Federal Appeals Court in the US has refused to grant cover for alleged ‘collapse’ of a building which was insured under a property policy.

The building in question had some decayed framing but the framing as a whole was sufficient to support the weight and loads imposed.

The court held that the word ‘collapse’ requires ‘an impairment so severe as to materially impair a building’s ability to remain upright’.

The case is American Economy Insurance Company v CHL, LLC.

First published by Financial Institutions Legal Snapshot.