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Nevada Insured Burdens of Burden of Exemption – Property Insurance Coverage Law Blog



Exclusion provisions in a policy aim to limit the coverage area by limiting certain events or losses; often serves as a basis for rejecting a claim. Nevada case law has long held that the burden is on the insured to prove that a claim falls within the coverage area, and the insurer bears the burden of proving the applicability of an exemption. But for the first time, the Supreme Court of the State of Nevada was faced with the question of who bears the burden of proving an exemption from a policy exemption, which essentially restores coverage. 1

Zurich American Insurance Co. v. Ironshore Specialty Insurance Company arose from two related design defect claims that relied on the insurance's "sudden and unintentional" claims. 2 By adopting the majority strategy, the Supreme Court of Nevada concluded that an exemption from an exemption rests with the insured, not the insurer. The court also considered that insured persons can use external facts that are available to the insurer when determining the insurer's liability.

When pointing to relatives. states and similar jurisprudence in Nevada, the court reasoned that since the insured bears the burden of proving that the loss falls within the scope of the coverage, the insured must prove that the coverage is revived when they apply for an exemption. the court was careful to clarify that in connection with the insurer's obligation to defend, the insured is only obliged to determine that there is a potential for coverage under the exemption.

Although this decision provides more scope for determining an insurer's obligation to defend, it still poses challenges for Nevada insureds seeking to prove an exemption from an exemption provision.
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1

See Zurich American Ins. Co. v. Ironshore Specialty Ins. Co. 137 Nev. Adv. Op. 66 (Nev. 28 October 2021) (answers certified questions from the Ninth Circuit Court of Appeals).
2 https://www.propertyinsurancecoveragelaw.com/2020/08/articles/insurance/who -har-burden. -to-prove-an-exception-to-an-exclusion-of-coverage-in-an-insurance /


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