Material damage insurance covers losses for “sudden” damage.  They do not cover a gradual deterioration or gradual damage such as a slow leak from a roof.  In a recent case a company claimed on its material damage insurance for 24 alleged incidents of water damage following times of heavy rain and high wind.  The 24 incidents happened between August 2012 and August 2015 but were only reported to the insurer in 2015. 

When the insurance adjuster went to the premises to inspect the damage to the goods that had been claimed for they had already been discarded.  Their insurance company refused the claim because the damage happened over an extended period of time so there was no proof of “sudden” damage and even if there had been sudden damage, the failure to report the losses to the insurance company for three years prejudiced the insurer’s ability to assess the claim because all of the damaged goods had already been disposed of as scrap.

The failure by the insured company to establish that there was “sudden” damage to the contents of its warehouse meant that there was no cover under the policy.

Alan Knowsley

Insurance Lawyer