An article I wrote on ensuing loss was recently published in the ABA's Insurance Coverage Litigation Committee's Coverage Magazine (article attached here.) The article discusses first party property policies providing for ensuing loss. The ensuing loss provision may read something like this: "We will pay for resulting loss caused by a Peril Insured." Accordingly, although a loss may be excluded from coverage, any ensuing or resulting loss caused by a covered peril may still be covered.
The following hypothetical may help us understand the concept of ensuing loss:
Recall the 1906 San Francisco Earthquake. On that terrible day, an earthquake occurred throughout the city. The earthquake led to ruptured gas lines. The escaping gas eventually ignited, causing extensive fires, which caused the loss of homes and structures in the city. A homeowner’s policy usually does not cover earthquakes (although a special earthquake policy may be available for purchase). Loss caused by fire, on the other hand, is typically covered in the homeowner’s policy. So if the excluded peril (earthquake) caused an independent peril (fire), the resulting loss caused by the fire would be covered as an "ensuing loss."
