“Corrosion” and “Sudden and Accidental” in Context of Pollution-Exclusion Clause under RI Law”

In Nunez v. Merrimack Mutual Fire Insurance Co., (No. 2013-129-Appeal), the Rhode Island Supreme Court looked at the terms corrosion and sudden and accidental in the context of an oil leak on an insured's premises.

May 2014

Drew W. Colby

In Nunez v. Merrimack Mutual Fire Insurance Co., (No. 2013-129-Appeal), the Rhode Island Supreme Court looked at the terms “corrosion” and “sudden and accidental” in the context of an oil leak on an insured’s premises. The Court ruled the leak occurred due to “corrosion” and, therefore, the policy excluded coverage. The Court further ruled that even if “sudden and accidental” is measured from an insured’s perspective, the loss must also arise from “tearing apart, cracking, burning or bulging.” Because corrosion rather than “tearing apart, cracking, burning or bulging” caused the loss, the mere fact that the loss might have been “sudden and accidental” is not enough to trigger coverage.

As background, the insured purchased a home, but conditioned the sale on the seller replacing the oil tank and boiler. Although the seller replaced the oil tank and boiler, the original underground oil line feeding the boiler remained. A couple of years after the sale, a technician servicing the boiler noticed leaking oil. An investigation revealed the leak resulted from the oil feed line corroding over a number of years.

The insured claimed entitlement to coverage under Section I Perils Insured Against because the pollution release was caused by a Peril Insured Against under Coverage C. Coverage C, Section 13 provides coverage if the release was caused by the “Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system . . . .” The insurer, on the other hand, countered by noting coverage was excluded under Section I (“We do not insure, however, for loss . . . caused by . . . corrosion.”).

The Court ruled the loss arose from corrosion and, therefore, the plain language of the policy excluded coverage. Moreover, even if “sudden and accidental” is measured by the insured’s expectation, those terms are only relevant if the loss also occurred from the “tearing apart, cracking, burning or bulging of a steam or hot water heating system.” Because corrosion is not “tearing apart, cracking, burning or bulging,” the second half of the requirement was not met and coverage was excluded.

Copy of Nunez v. Merrimack Mutual Fire Insurance Co., (No. 2013-129-Appeal) [PDF]


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