Facing an issue of first impression, the West Virginia Supreme Court ruled that property damage caused by either a man-made or a natural cause was excluded under the Insurance Service Office's 2013 earth movement endorsement. Erie Ins. Prop. & Cas. Co. v. Chaber, 2017 W. Va. LEXIS 430 (W. Va. June 1, 2017).
Five commercial rental units were located on the insureds' property. One unit was a motorcycle shop. Soil and rock slid down a hill and damaged the motorcycle shop. A claim was submitted to Erie.
The policy's earth movement exclusion provided that buildings were not covered for,
[L]oss or damages caused directly or indirectly by any of the following. Such '"loss" or damage is excluded regardless of any cause or event that contributes concurrently or in any sequence to the "loss":
. . .
b. Landslide, including any earth sinking, rising, or shifting related to such event . . .
. . .
This exclusion applies regardless of whether any of the above is caused by an act of nature or is otherwise caused.
Erie relied on the exclusion to deny coverage. The insureds filed suit. Erie filed a motion for summary judgment which was denied because genuine issues of material fact existed regarding the cause of the insureds' damages and whether such cause was man-made, natural, or a combination of both. The court later granted the insured's motion for summary judgment, finding that coverage existed based upon evidence of earth movement caused by both natural and man-made events, specifically an improperly excavated hillside.
The supreme court reversed. The ISO's new exclusion added the phrase "caused by an act of nature or is otherwise caused" to minimize confusion regarding the scope of coverage and the nature of earth movement exclusionary language. The phrase clearly and unambiguously excluded coverage for a landslide resulting from a natural event or otherwise. Here, regardless of whether the event was triggered by natural forces or improper excavation of the hillside at the rear of the property, the exclusion applied.
The circuit decision was reversed and the matter remanded with instructions to enter declaratory judgment for Erie.
