Ohio Supreme Court holds that insurance policy exclusion for water backup encompasses sewage backup.

The Ohio Supreme Court was asked to determine if a water backup exclusion in a commercial property policy excluded coverage for damage caused by a sewage backup or overflow. The court majority held that the exclusion applied, with two Justices dissenting. 

The case arose out of a sewage backup at a bar in Akron, Ohio, which flooded the interior of the building. The bar submitted a claim to its property insurer, and the insurer denied the claim based on the exclusion for “water that backs up or overflows from a sewer.” The bar assigned its claim to the company that did the cleanup, AKC, which sued the insurer. The trial court granted summary judgment to the insurer, and AKC appealed. 

The 9th District Court of Appeals found the exclusion ambiguous because it only referred to water that backed up and overflowed. They reasoned that the insurer could have easily included sewage in the exclusion if they wanted to exclude sewage and not just water. 

The Ohio Supreme Court reversed, finding the exclusion unambiguous and reasoning that sewers contain sewage and an ordinary understanding of the exclusion would lead one to realize that the backup or overflow of water from a sewer includes sewage. 

Although rules of contract construction require exclusions to be read narrowly, the rule of strict construction does not permit a court to ignore the obvious intent of the exclusion. 
 

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