The latest in insurance "loophole" arguments
A superficial search of this weblog will provide numerous examples of insurers attempting to avoid obligations they have collected premiums to cover--through nonsensical or perverse construction of the insurance policy contract. The industry hit a new low in Texas this fall, however, when Great American Insurance Company filed an argument claiming that it was not responsible to provide "excess" coverage for several deaths that resulted from an office building fire. The insurer is claiming that although its policy including fire liability coverage, it owes no coverage for the seven deaths that occurred in a 2007 fire because the victims all died of smoke inhalation. The insurer is arguing that it owes no coverage for smoke inhalation deaths because it included an exclusion in the policy for damages caused by "pollution".
The building owner's attorney was stunned by the company's claim, which is directly contrary to the position taken by the insurance company that has primary insurance coverage on the building. The attorney who filed the argument for "Great American" [it pains us to call these crooks by that name] and the insurer itself both refused comment: we'd argue out of shame. A Houston law professor was quoted in the Houston Chronicle to the effect that the "Great American" claim will test the limits of insurance coverage jurisprudence, since a hyper-technical reading of the insurance language would lead to an outcome that is divorced from reality and common sense. The Michigan Supreme Court Engler majority has been engaging in that kind of nonsense for several years in our state. Maybe this is what "Great American" has come to stand for after years of financial scandal, self-dealing, conflict of interest, and purchasing influence.