A policyholder bears the initial burden of showing that the insurance contract covers the loss.

This insurance coverage dispute involved property damage during Hurricane Sandy to a generator installed in the basement of One Manhattan Plaza. Under New York law, “a policyholder bears the initial burden of showing that the insurance contract covers the loss.” The issue boiled down to the definition of the covered premises. The plaintiff argued that the policy provided coverage for flood damage to the downtown location, including the basement. The court determined that the “Scheduled Locations Endorsement” was a limit of coverage to the 33rd floor. As such, the policy was appropriately read as covering only the 33rd floor. The court held that the plaintiff failed to carry its initial burden of showing that its loss took place at a “covered location.”

Case Law Alerts, 2nd Quarter, April 2014