Who has the burden of proof in a typical all-risk insurance which is now often called an "open danger" policy? What does a policyholder normally have to prove in order to claim property damage? These are pretty basic questions with answers that can get confusing when the burdens change.
Under Characters 'insurance burden under all risk policies is characterized as "relatively light" Merlin Law Group attorney Shaun Marker noted:
In disputes, the parties' burden of proof is extremely important. Plaintiffs must understand the burden of proof that applies in the case in which they are involved. Consider the difference between having to prove that a loss is covered in accordance with specific insurance terms and having only to prove that a loss was accidental and affected the insured property. The first situation may be appropriate under a risk management policy. The second is a policyholder's burden of proof according to an all-risk policy.
Marker then noted a case in New York where there was a fairly standard rule for the policyholder's burden under an all-risk policy:
An insured who claims under an all-risk policy has the initial burden of establishing a prima facie cases for recovery. An insured person meets this burden by showing: & # 39; (1) the existence of an all-risk policy, (2) an insurable interest in the subject matter of the insurance contract, and (3) the unfortunate loss of the covered property. & # 39; This burden has been characterized as & # 39; relatively easy. & # 39; the burden is shifted to the insurer to determine that an exemption applies. The court found that the insurer's burden is a "heavy" one to deny coverage due to exclusions in an all-risk policy.
The case I mentioned 1 in last week's post, Do Do You Have a Florida Property Insurance Dispute Over Valuation? Understanding the differences between compensation cost value, fair cash value and how the broad evidence rule works is a practical example of this concept. The court noted the argument between the parties about the damage to the church roof:
ASIC claims that most of the roof damage was not hurricane damage, but it does not dispute the church's claim that the hurricane caused at least some roof damage. The parties actually agreed at the hearing that there was a covered loss during the insurance period. They further agreed on the burden-shifting framework for determining insurance coverage. According to this framework, the insured bears the first burden of determining a loss covered by the insurance. If the insured shows a covered loss, the burden shifts to the insurer to show that an exemption applies. (citation omitted)
When the parties acknowledged that the concept of burden of proof has shifted, the court then discussed the practical effect of the case being forced to a trial:
So with the parties essentially agreeing on all this, ASIC may argue that summary assessment in this matter would not promote the case in any meaningful way. And it may not make much of a difference. But at trial, it will prevent the church from having to bear its initial burden of showing a covered loss.
By claiming that such a discovery would not meaningfully promote this case, ASIC claims that & # 39; [the Church] must prove that all of its alleged damages on both roofs are covered by the policy. “… But this incorrect framework for shifting burdens. When the insured meets his initial burden by showing a covered loss, ”the burden shifts to the insurer to show that the loss was due to an excluded cause. The insured does not have to disprove any excluded causes. ’ Citizens Prop. Ins. Corp. v. Munoz 158 So. 3d 671, 674 (Fla. 2d DCA 2014)…
Once again, ASIC agrees that some shingles and some tabs on the roof belt were damaged by winds from Hurricane Michael. "… Based on this acknowledgment, it has been determined that a covered loss occurred, and I will grant the Church's motion to that extent. But to be clear, I do not find (and have not been asked to find) that all roof damage was covered. ASIC can still present evidence that only part of the roof damage was caused by wind, but it bears the burden of showing that any damage was the result of an excluded cause.
The district court therefore granted the policyholder's claim for a partial summary judgment and shifted the burden on the insurer to prove which part of the alleged loss was excluded.
Thought For The Day
Faced with the choice between changing one's mind and proving that there is no need for it, almost everyone is preoccupied with the proof.
—John Kenneth Galbraith
1 Dupont-Butler v. American States Ins. Co. No. 1:20-cv-35 (N.D. Fla. February 25, 2021).