The Sixth Circuit found that the insured’s loss of property due to fire was covered despite noncompliance with an endorsement requiring encompassing the property. 3371 Reading, LLC v. Liberty Mut Group, Inc., et al., 2026 U.S. App. LEXIS 19156 (6th Cir. June 29, 2026).

The insured, 3371 Reading, owned a building undergoing renovation. After the structure burned down, 3371 Reading made a claim under its policy with Ohio Casualty Insurance Company. Ohio Casualty relied on an endorsement requiring fencing round the jobsite.

A fence around 3371 Reading’s property, however, was impossible. There was no space on 3371 Reading’s side of the property line to place a fence on three sides of the property. Erecting a fence would have required 3371 Reading to either trespass on its neighbors’ properties or obtain easements from them. The property on the southern side shared a wall, so the most that 3371 Reading could have done was build a fence along three sides of the property.

3371 Reading filed suit. The parties cross-moved for summary judgment. The district sided with Ohio Casualty.

The Sixth Circuit predicted that if faced with the endorsement, Ohio courts would not have enforced it. That meant the endorsement was not enforceable and 3371 Reading was entitled to coverage.

Building a fence around the entire property was impossible because the property shared a wall with its southern neighbor. Even if the policy were read to require the type of fencing stated in the policy, that requirement was void with respect to the property at issue because of impossibility of performance.

While 3371 Reading was entitled to coverage for the fire, the claim for bad faith was rejected. The policy was difficult to parse, and the insurer’s position was at least plausible.