The insured's claim for fire loss was rejected based upon an endorsement requiring sprinkler systems be installed in all buildings. Illinois Union Ins. Co. v. Grandview Palace Condo. Assn., 2017 N.Y. App. Div. LEXIS 8023 (N.Y. App. Div. Nov. 14, 2017).
The policy issued to the insured included a protective safeguards endorsement (PSE) that required the insured to maintain automatic sprinkler systems in all buildings of its multi-building condominium complex. After a fire at the complex, an investigation determined that some of the buildings did not have sprinkler systems and others had only limited sprinkler systems, some of which were not working properly. Coverage was denied for failing to comply with the PSE.
The insured argued the PSE was ambiguous. For example, the multiple buildings in the complex were actually multiple coverage locations, so that the absence of sprinklers in one building did not mean that coverage was excused for all buildings with sprinklers. The court rejected the insured's attempt to create an ambiguity where none existed. Therefore, the insurer properly denied coverage for failing to comply with the PSE.