Read that insurance policy carefully…
The Indiana Court of Appeals held recently that an insured’s policy can be read to provide both property damage coverage and personal injury coverage for the same injury to real estate.
In FLM v. Cincinnati Insurance, the insured’s property was polluted by contaminated sand from the Chrysler foundry in Indianapolis. FLM’s attorneys argued that the damage caused by the polluted sand on FLM’s property triggered not only Cincinnati’s property damage coverage but also its personal injury coverage.
The Court of Appeals concluded that the deposited sand constituted a ‘wrongful entry’ or ‘invasion of the right of private occupancy’ covered by the personal injury provisions of the comprehensive general liability insurance policy issued by Cincinnati. The same sand also damaged FLM’s property, thus triggering the property damage coverage in the same policy. The result: FLM received both limits of $1,000,000 in coverage, for a total of $2,000,000.
Lesson learned: Insurance policies need to be read carefully. Vague or ambiguous terms must be interpreted by a court to provide coverage.