A crane struck Chabad's building. Chabad had two insurance policies on that building. One covered wind damage and the other did not. Chabad collected on the first policy because Tropical Storm Barry was the reason the crane struck the building. Chabad then requested coverage under the second policy. Chabad argued that the building loss was not due to wind but was instead due to an ensuing loss.

Click here to see how the courts reacted to the insurance company's denial.

Many policies exclude a cause of loss but then give back part of the coverage in an exception for ensuing loss. For example, assume that loss caused by centrifugal force is excluded, but, if a fire ensues because of the damage the centrifugal force causes, the damage the fire causes is covered. When a widget wheel rotates too fast and flies apart, the damage to the wheel is not covered and the damage which the flying wheel causes is not covered. However, if the flying wheel somehow starts a fire, the damage that fire causes is covered.

Click here to review the PF&M analysis of the ISO Property Causes of Loss Forms.

The windstorm policy's carrier was Lloyd's of London. Its wording is often different from standard Insurance Services Office (ISO) or American Association of Insurance Services (AAIS) coverage forms but is similar to traditional insurance wording because Lloyds started much of that traditional wording.

Click here for information about Lloyd's of London and the important role it plays in insuring businesses and individuals in the United States.

Windstorm and hail is a covered cause of loss/peril on almost all property-related coverage forms. However, it is often excluded or subject to high deductibles in certain communities with high damage potential.

Click here for a discussion on the windstorm and hail cause of loss/peril.