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This week an appellate court in Michigan ruled that the earth-movement exclusion in a Businessowners Insurance Policy applied to all earth movements, and not just “natural” earth movement. The case is Home-Owners Ins. Co. v. Andriacchi, No. 331260 (Mich. Ct. App. June 8, 2017).

The insurance company, Home-Owners, provided a businessowners policy of insurance to Andriacchi. The policy in place covered risks of physical loss unless that loss is either excluded or limited as per certain sections of the policy. Early in 2014, Andriacchi filed a claim for damages to his building that occurred after major street repairs had been executed. A licensed engineer employed by Home-Owners determined that the cause of the observed structural damage was earth movement beneath the interior concrete floor slab. Home-Owners denied the claim because the policy included an exclusion to coverage for “any earth movement.” Andriacchi maintained that the earth movement exclusion that was listed in the policy applied only to natural earth movement, not to “man-made” earth movement, and if the words “any earth movement” were read in context with those surrounding them, the exclusion would be limited to natural phenomena. The trial court determined that “any earth movement means any earth movement” and ruled in favor of Home-Owners.

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