In Jack Trocki Dev. Co., Inc. v. Robert H. Wise Management Co., Inc., a Pennsylvania held it is the insured’s burden to establish that an exception to an exclusion is applicable, thus, placing its claim within the coverage of a policy.

By way of background, the plaintiff-insured owned a condominium unit that was insured by the defendant-insurer.  The plaintiff’s property allegedly sustained water damage and, as such, the plaintiff submitted a claim to its insurer.  In response to the claim, the insurer conducted an investigation by retaining a civil engineer to perform an inspection of the property.  Ultimately, the engineer concluded there was no evidence of an occurrence.  The insurer denied the insured’s claim, as the policy did not provide coverage for damage caused by wear and tear.

In determining whether the denial was proper, the court looked to the policy language.  The court noted that the insurer agreed to pay for damages caused by a “Covered Cause of Loss”, which excluded from coverage certain types of losses caused by wear-and-tear.  However, the policy carved out an exception by stating if an excluded cause of loss, such as wear-and-tear, resulted in a “specified cause of loss”, then there would be coverage under the policy.  Water damage was listed as a “specified cause of loss”.  Water damage, however, was defined by the policy, in part, as: “accidental discharge or leakage of water or steam”.  The court reasoned that although the insured claimed that his property was damaged by water, the insured did not establish the water damage was caused by accidental discharge or leakage.  Rather, the only evidence produced indicated that the damage was caused by normal wear and tear.  Consequently, the court concluded the insured failed to establish the exception to the exclusion was applicable and, thus, no coverage was provided under the policy for the insured’s claimed loss.

As a general matter, under Pennsylvania law, an insured carries the burden of establishing his or her claim is covered under the policy.  This case supports the proposition that Pennsylvania courts extend this burden to requiring an insured to establish that an exception to an exclusion provides coverage under the policy.

Thanks to Colleen Hayes for her contribution to this post.