The policy's anti-concurrent causation clause preserved the possibility of coverage when the insurer's motion for summary judgment to disclaim its indemnity obligation for damage caused by Hurricane Sandy was overturned by the Second Circuit. Madelaine Chocolate Novelties, Inc. v. Great Northern Ins. Co., 2018 U.S. App. LEXIS 29821 (Oct. 23, 2018 2nd Cir. )

    In 2012, Madelaine Chocolate suffered significant damage to its business due to storm surges created by Hurricane Sandy. Madelaine Chocolate had an "all-risk" policy issued by Great Northern. Madelaine Chocolate filed a claim for property damage of approximately $40 million and business income loss and extra operation expenses of $13.5 million. Great Northern denied most of the claim, reasoning that the storm surge damage was excluded under the policy.

    The policy included a Windstorm Endorsement which defined "windstrom" as  "wind" or "wind-driven rain . . . which contributes concurrently to or contributes in any sequence to the loss or damage, even if such other cause or event would otherwise be covered." Therefore, the Windstorm Endorsement contained its own anti-concurrent causation (ACC) clause. Madelaine Chocolate interpreted the Windstorm Endorsement, particularly its ACC clause, to encompass losses caused by storm surge, a wind-driven peril.

    Great Northern, however, denied coverage based upon the policy's flood exclusion provision, which stated the insurance did not apply to loss or damage caused by "waves, tidal water or tidal waves" which "contributes concurrently to or contributes in any sequence to the loss or damage, even if such other cause or event would otherwise be covered." Therefore, the parties disputed whether storm surge damage was excluded from coverage under the Flood Exclusion in light of the Windstorm Endorsement's ACC clause. The district court granted summary judgment to Great Northern, finding that the Flood Exclusion unambiguously excluded storm surge damage from coverage under the policy. 

    The Second Circuit vacated the district court's judgment and remanded for further proceedings. The district court was instructed to assess whether the Windstorm Endorsement's ACC clause conflicted with or otherwise created an ambiguity due to the policy's Flood Exclusion. It was suggested that the district court may wish to permit discovery into interpretive materials relating to the Windstorm Endorsement and its relationship to the policy's coverage provisions.