An Aspen Insurance Holdings Ltd. entity is not required to provide coverage to a landlord for demolition costs associated with water damage due to an unexplained twelve-day delay in disclosing the damage, a federal appeal court said in  Louisville, Kentucky-based South Fifth Towers LLC owns a Louisville high-rise apartment equipped with Aspen London-based Aspen Insurance UK Ltd. according to Friday's 6th US Circuit Court Appeals in Cincinnati in South Fifth Towers LLC v Aspen Insurance UK Ltd. and Tenco Services Inc.
On June 26, 2013, thunderstorms fell 2.6 inches of rain on Louisville and caused water damage. Southern fifth contacted their insurance broker either that evening or the next day, but Aspen was not informed of what happened until 1
At that time, Aspen sent his own adjusters, employees of Co-Defendant Brentwood, Tennessee-based Tenco, the demolition was almost completed, according to them.
South Fifth eventually demanded a loss of $ 1.3 million and Aspen denied coverage. In the subsequent disputes, the US District Court in Louisville ruled in Aspen and Tenco's service, as confirmed by a unanimous three-judge appeal panel.
"There can be no genuine dispute that Aspen probably suffered from major prejudices" from the 12-day delay being told about the water damage, the court said.
The policy "demanded southern fifth to announce as soon as it could," they said.
"Here the southern fifth did not provide notice as soon as it could have. Aspen was notified eleven days after it notified its insurance broker … When (the broker) was asked about this delay, he could not explain why Aspen had not been notified before. And in appeal, Sydfifth does not fail to explain the delay, "they said.
"The late dismissal deprived Aspen of the chance to see the water damage before the demolition began. That means that Aspen had no way of judging how much of the demolition was necessary or opposed to imbalance or too expensive demolition before it happened," they said.
"Although all demolition was appropriate, it made it impossible for Aspen to consult and coordinate with the demolition contract and the southern fifth, the verdict says.
Aspen" had no chance to inspect the damage, see the moisture content before demolition (which the contractor did not maintain) ), or ask the contractor to do something else in such extensive and expensive demolition, "the judge said.  The record" reveals no genuine dispute that … late dismissal created a reasonable likelihood of substantial prejudice against Aspen, "the court said in confirmation
In 2016, a federal court of appeal confirmed a lower court of law and said QBE Insurance Corp. was entitled to deny a homeowner's association of hail damage because it submitted its application nine months ago and failed to adequately explain the delayed announcement way.