Split On Calif. Code Upgrade Coverage Remains Unresolved
An appellate court recently interpreted the law and ordinance exclusion to preclude coverage when the enforcement of a law or ordinance is the actual cause of the loss itself rather than a covered peril.
March 18, 2013
Law360, New York (March 18, 2013, 1:17 PM EDT) -- California’s Fourth Appellate District Court recently interpreted the law and ordinance exclusion to preclude coverage when the enforcement of a law or ordinance is the actual cause of the loss itself rather than a covered peril. Reichert v. State Farm Gen. Ins. Co., 212 Cal. App. 4th 1543, 152 Cal. Rptr. 3d 6 (2012). Additionally, the court held that even if the law or ordinance is being enforced due to a third party’s negligence, the loss may still be precluded under the exclusion. Id. at 1549-50, 152 Cal. Rptr. 3d at 10-11.
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