Let It Snow. Let It Snow, Let It Get Damaged?

Gearing up for winter—what insurers need to know in preparing for cold weather claims.

November 5, 2018

The winters in recent years have been making headlines, particularly on the East Coast, where snowfall reached record levels and with it the number of property damage claims.¹ To prevent the weight of ice or snow or water penetration from damaging residential or commercial buildings, many owners resorted to prophylactic self-help methods, such as shoveling snow off their roofs. The coverage question arising from these efforts is whether insurance policies covering direct physical loss or damage to property obligate insurers to reimburse insureds for the costs incurred to safeguard their property and prevent damage from ice or snow. According to Roche Bros. Supermarkets, LLC v. Cont’l Cas. Co., a recent Massachusetts case addressing this precise issue, the answer is “no.”

In 2015, Roche Brothers reportedly spent more than $800,000 to remove snow from the roofs of its properties at various locations.² To recoup this expense, Roche Brothers submitted a claim to its insurer, Continental Casualty Company (“Continental”). Continental denied the claim on the grounds that the policy covered only actual damage, not preventive expenses. Roche Brothers challenged this position by filing the above-captioned lawsuit.

While recognizing that the snow removal was a “very prudent, prophylactic step” to avoid possible structural damage to the insured’s buildings, the court ultimately held in favor of Continental, finding that the Roche Brothers properties did not suffer a covered loss. The court reasoned that the unambiguous terms of the policy insured Roche Brothers only for physical loss or damage to property and not for expenses incurred to protect against the possibility that snow might cause physical damage.³ In other words, there is no coverage for the mere hypothetical risk that property could be lost or damaged at some point in the future.⁴ As the court reasoned, to read and apply the policy any other way would modify the policy to allow for additional coverage for which neither party contracted.⁵ Therefore, where the Roche Brothers’ properties did not suffer any physical damage as a result of the snowstorms and where none of the contents was lost or damaged, no “loss” occurred.

This case is good news for insurers. With no subsequent appellate history or distinguishing cases in Massachusetts or other jurisdictions, insurers covering homes or commercial buildings under similarly worded policies in New England can derive support from this case for the denial of coverage for claims for preventive expenses.⁶

¹Diedre Fernandes, “Insurance claims on the rise as snow piles on” Boston Globe (Feb. 12, 2015), available at https://www.bostonglobe.com/business/2015/02/12/insurance-claims-rise-snow-piles/8hwxiHlX5mAI6POScfms9K/story.html.

² No. 2017-0159-BLS1, 2010 Mass. Super. LEXIS 81, at *1-3 (Mar. 16, 2018).
³Id. at *1-10 (The policy insured against two types of risks: (1) direct physical loss of property; and, (2) direct damage to property).
⁴Id. at *4.
⁵ Id. at *5 (“Simply insuring against the ‘risk that damage might occur’ does not explain what insurance is being provided. If the risk does not materialize, there is no loss to the value of the property insured. What Roche is apparently arguing is that one must read into the Policy the provision that if the insured reasonably believes that there is a risk that property damage will occur, then the Policy covers the cost of eliminating that risk; in other words, preventative maintenance. There is simply no language like that in the Policy”); see also Tocci Bldg. Corp. v. Zurich Amer. Ins. Co., 659 F. Supp. 2d 251, 259 (D. Mass. 2009) (“[I]t would make no sense to cover an event which creates a risk of physical damage . . . It is impossible to read the insurance policy as providing coverage for ‘risk’ in the absence of ‘damage’”).
⁶But as always, the language of the policy is key. Policies that contain “sue and labor” provisions requiring protection of property may call for a different result. Roche Brothers was decided without consideration of the existence of a “sue and labor” clause.