The insureds unsuccessfully argued that water damage to their home was covered by the ensuing loss provision. Friedberg v. Chubb & Son, 2012 U.S. App. LEXIS 18817 (8th Cir. Sept. 7, 2012).

   The insureds' home was built in 1989. In 2006, extensive water damage was found to the house. The insureds notified their carrier, Chubb. The insureds had coverage for all risks unless stated otherwise in the policy or if an exclusion applied.

   Chubb hired an adjustor who determined that defective construction had enabled water to enter the wall and beam systems. Chubb denied coverage under the faulty planning, construction or maintenance exclusion. The exclusion also provided, "[W]e do insure ensuing covered loss unless another exclusion applies."

   The insureds sued Chubb. The district court granted summary judgment for Chubb, holding that the water damage was a loss caused by faulty construction and therefore excluded under the policy.

   On appeal, the insureds first argued that the policy covered the water damage to their home under the concurrent causation doctrine. The loss occurred from the presence of water (a covered peril) and from faulty construction (an uncovered peril). The court found if an excluded period was the efficient and proximate cause of the loss, then coverage was excluded. The faulty construction of the insureds' house was the efficient and proximate cause of the loss, or the overriding cause. Once the house was plagued with faulty construction, it was foreseeable that water would enter. Although water intrusion played an essential role in the damage to the house, it was not an independent and efficient cause of the loss.

   Further, coverage was not restored by the ensuing loss clause. Under Minnesota law, the ensuing loss provision excluded from coverage the normal results of defective construction and applied only to distinct, separable, ensuing losses.