hammer, libra, dish-802301.jpg

Property in 60 Seconds: Clear Vacancy Language Earns Insurer Summary Judgment

On May 14, 2024, the Eastern District of Pennsylvania held that the Vacancy provision in a commercial property policy applied, barring coverage for a policyholder’s claim of over $13 million in theft/vandalism damages, while simultaneously denying allegations of bad faith. 

In 4301 N Delaware QOB LLC v. Selective Insurance Company of South Carolina, the plaintiff policyholder sued Selective for breach of contract and bad faith due to an alleged delay in making a coverage determination and issuing loss payments following an alleged theft/vandalism. Selective countered, arguing the building was vacant for more than 60 days and the loss not covered. Selective further argued that any alleged delay was associated with a necessary, ongoing investigation of the loss.

The Court sided with Selective on all arguments, applying the clear unambiguous vacancy language. In discussing the bad faith allegations, the Court concluded that because the Vacancy provision applied, Selective had a reasonable basis for denying the claim. Moreover, even if the Vacancy provision was inapplicable, the circumstances surrounding the use of the building and Plaintiff’s failure to timely provide responsive information created a reasonable basis for both Selective’s belief that the vacancy provision might apply and Selective’s investigation. The court granted Selective’s Motion for Summary Judgment on all counts. 

The Opinion can be found here.

This post was originally published through Horst Krekstein & Runyon’s Property in 60 Seconds Newsletter. If you would like to receive future copies of that newsletter, please use this link to sign up.