Although California-based incidents certainly serve as the most prominently spotlighted examples of contested insurance coverage in incidents involving shifting ground (think mudslides, earthquakes and so forth), so-called “earth movement” cases also arise in insurance litigation in many other states as well, including Colorado.
Such cases are inherently complex, and often heatedly contested. A recent National Law Review article duly notes that, unsurprisingly, “the scope of earth movement exclusions has been heavily litigated.”
It is certainly unremarkable that insurance companies would seek to protect themselves against claims in cases where some natural shifting of ground occurs. If a liability limitation did not exist in such instances, an insurer would run incalculable and potentially catastrophic risks defending against what are sometimes called Acts of God (force majeure).
It is equally understandable, though, that an insured party would want to be covered in any case where a third party (e.g., third party is a building owner that has contracted with a construction contractor for specified structural improvements, with the contractor being the insured) files a lawsuit for damages resulting from ground movement.
In both figurative and literal terms, a claim involving ground displacement and an earth-movement exclusion can make for a slippery slope.
Where should a court draw the line on recovery versus an insurer’s winning argument against coverage and liability?
Much depends on the precise language in a policy, of course, with judges additionally weighing in with viewpoints that, while grounded in the law, can also be subjectively influenced by other factors, as well.
Insureds and insurers alike that have questions or concerns regarding their respective rights and duties under a policy can contact a proven insurance defense attorney for candid consultation and, when necessary, forceful and knowledge legal representation that safeguards their rights and seeks to fully promote their best interests.