Property ruling in Chubb’s favor affirmed

A federal appeals court has affirmed dismissal in favor of a Chubb Ltd. unit in a case involving a building that was sinking into the ground, based on a design exclusion in the insurer’s coverage.

Jowite Limited Partnership discovered that one of three buildings it owns in Easton, Maryland, which was constructed in the late 1980s, was sinking, according to Thursday’s ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, in Jowite Limited Partnership v. Federal Insurance Co.

After a construction company recommended the building be demolished, Jowite filed a claim with Chubb unit Federal Insurance seeking coverage for the damage caused to the building “due to ground settling,” the ruling said.

After Federal denied the claim, citing several policy exclusions, including defective design and settling exclusions, Jowite filed suit in U.S. District Court in Baltimore, which ruled in the insurer’s favor.

The ruling was affirmed by a unanimous three-judge appeals court panel. “While we conclude that the district court committed no reversible error in holding that the design exclusion bars coverage of Jowite’s claim, we also observe, without deciding, that the result of this case would be unchanged were we to review the district court’s application of the settling exclusion,” the ruling said.

Attorneys in the case did not respond to requests for comment.

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