The court determined that the policy's ensuing loss provision prevented the insurer's motion for summary judgment on coverage for repair of an elevator. Lloyd's Acceptance Corp. v. Affiliated FM Ins. Co., 2013 U.S. Dist. LEXIS 130405 (E.D. Mo. Sept. 12, 2013).

   The insured managed an apartment building with four passenger elevators. After an inspection of the elevators, it was determined repairs were needed. One of the elevators was shut down so that replacement parts could be located and ordered. Steel suspension ropes on the other elevators had to be replaced.

   A claim for repair and replacement costs was submitted to the insurer under a California Standard Form Fire Insurance Policy. The insurer contended that the claim was based upon gradual deterioration, inherent vice, faulty workmanship, rust, corrosion, contamination, and electric and magnetic injury, all of which were excluded under the policy. 

   The insured filed suit and cross-motions for summary judgment were filed. The insured argued that the faulty workmanship exclusion applied to construction defects, but did not apply to negligent repair or maintenance of completed projects at issue here. Looking to the entire provision, the court noted that the phrases surrounding "faulty workmanship" related to defects that occurred before or during a construction activity. Therefore, the insured's motion for partial summary judgment was granted. 

   The insurer argued the claim did not fall under the ensuing loss exception to the exclusions. The policy had two sets of exclusions. The preface of the first set stated:

We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss . . . .

The preface of the second set read:

We will not pay for loss or damage caused by or resulting from any of the following perils; however, if loss or damage not excluded results, then the resulting damage is covered.

   The absence of the "regardless of" phrase in the second set implied that these exclusions applied only when they solely caused the loss. Otherwise, there would be coverage under the resulting loss provision in the preface. The insurer offered no argument that the breakdown of machinery or equipment did not cause the insured's loss, and thus failed to demonstrate that the claim fell within an exclusion. Therefore, the insured's motion for summary judgment was denied.