Hunton Insurance Recovery Blog

In 3371 Reading, LLC v. Liberty Mutual Group, the Sixth Circuit did something courts do not always do in coverage disputes: it refused to let an insurer avoid liability based on a technical policy condition that could never actually be satisfied.

The decision is a straightforward reminder of two core principles. First, policies must be interpreted from the standpoint of a reasonably prudent insured. Second, hyper-technical conditions cannot be used to deny coverage where compliance is never possible.

The Supreme Court of Wisconsin ruled yesterday that a construction company's builder's risk policy issued by Assurance Company of America ("Assurance") applied to cover a fire loss at a home under construction, even though the prospective purchasers of the home were residing in the home at the time of the fire and had already recovered from their homeowner's policy.