Recovery for the cost of stabilizing and then demolishing a building were excluded from coverage by the owned property exclusion. Clarinet, LLC v. Essex Ins. Co., 2013 U.S. App. LEXIS 7922 (8th Cir. April 22, 2013).

   In 2005, Clarinet purchased a building in St. Louis which was listed on the National Register of Historic Places. A windstorm on July 19, 2006, caused damage to the building, destroying parts of two exterior walls and part of the roof. Debris and bricks fell and damaged nearby city property. 

   After the storm, Clarinet sought to stabilize the building with aluminum bracing towers and netting. This continued for months until Clarinet demolished the building in June 2007, at costs exceeding $660,000. 

   Clarinet's CGL policy with Essex had an owned property exclusion, excluding from coverage, "'property damage' to property the insured owned, rented, or occupied, including any costs or expenses incurred for repair, replacement, enhancement, restoration, or maintenance of the property for any reason, including prevention of injury to a person or damage to another's property."

   Clarinet first gave notice of the stabilization and demolition to the insurer after the building was destroyed. Essex denied coverage for the expenses for stabilizing and demolishing the building. 

   The trial court granted summary judgment to Essex. The Eighth Circuit affirmed. Clarinet argued that the costs of stabilizing and demolishing the building were covered because these expenses were necessary to prevent further injury to persons and property. But the policy excluded these expenses under the owned property exclusion. 

    Thanks to my Damon Key blogging colleague, Robert Thomas (www.inversecondemnation.com) for sending me this case.