Insurance Law: Anti-Concurrent Or Anti-Sequential Clauses
By: Donna Russo, Esq.
Anti-concurrent or anti-sequential clauses exclude coverage in situations where a covered event and an excluded event contribute, concurrently or sequentially, to a single loss. In Ashrit Realty LLC, Bhavika Realty, LLC v. Tower National Insurance Company, Appellate Division, January 20, 2015, A-1647-13T4 (unreported), the plaintiffs owned a gas station and convenience store. The property sustained damage during a storm in August, 2011 and more extensive damage two weeks later during Hurricane Irene. After the hurricane, plaintiffs discovered a large hole as a result of a collapsed pipe. The collapsed pipe caused leaking water and substantial soil erosion which caused the collapse of the rear portion of the building.
The insurance company denied coverage based on an exclusion in the policy. Plaintiffs sought declaratory judgment that the loss was covered. The policy covered loss caused from hidden pipe decay. However, the policy excluded coverage for damage caused by soil erosion and water damage. The policy also contained an anti-concurrent/anti-sequential clause. [“Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss”]
Both parties’ experts agreed that the pipe sustained damage after the August, 2011 storm and partially collapsed after Hurricane Irene two weeks later. Plaintiffs did not contest that water was discharged as a result of the pipe collapse. Plaintiffs argue that the collapse of the pipe and not the soil erosion resulting from the water discharge was the cause of the loss. However, the plaintiffs’ expert did not challenge that soil erosion occurred.
The Appellate Division acknowledged that where there were two or more identifiable causes, one covered and the other excluded, which contribute to a single loss, there would be coverage absent an anti-concurrent or anti-sequential clause in the policy. (citing Simonetti v. Selective Ins. Co., 372 N.J. Super. 421, 431 (App. Div. 2004). However, in the within matter, the policy did contain an anti-concurrent or anti-sequential clause. On this basis, the Appellate Division confirmed the trial court’s ruling that plaintiffs’ losses are not covered.