The evening times. [volume] (Washington, D.C.) 1895-1902, 1901-03-09
FIRE INSURANCE PROBLEM
Question of Validity Growing Out
OF the Tarrant Disaster.

The Attitude of the New York Com
pnnies Causes Alarm Among Met
ropoiitan Merchants Criticism,
! NEW YORK. March 9-The settlement
| of the losses growing out of the destruc-
| ton Of the Tarrant Building has aroused
! considerable comment in insurance and
! general business circles. The Tarrant fire
| occurred on October %, 1880. and two days
! later the insurance companies interested.
! nearly fifty in number, appointed a com
! mittee. To enquire into it
On November this committee was fur
! nished with an opinion which set forth in
! substance that if the owner had in the
| building quantities Of any of the prohib-
| tied articles in excess OF the quantities
! allowed by law the policies would as to
such owner be void, and also so far as
such contents belonged TO persons other
! than -Tarrant & Co. and were insured
under separate policies. where such in
sured themselves violated neither the
/ provisions Of the respective contracts OF
! insurance nor infringed upon statutory
provisions or ordinances, it would in gen
! eral appear clear that such insured have
valid claims for the amount Of their re-
/ spectiVe losses"
It is the last clause of the oDfniou which
! has been commented on as expressing an
! entirely new theory of the liza biiity of fire
insurance companies The effect of such
an opinion IS regarded as fnvaIidatfng ev-
cry insurance policy on any building in
which by either negligence or overt act
! any violation Of the law occurs. The con-
| tention that such violation frees the com
pany from liability has created much dis
quietude, especially among those who
have valuable stocks OF drugs which hey
have heavily insured They say that If
the policies held on the drugs in storage
IN the Tarrant Building are invalid be
cause of lack Of compliance with the
statutes on the part of the owners. then
there can be no surety that security is af-
forded by insurance policies anywhere
On this subject a circular letter has
been sent to the companies interested by
nrIn OF insurance brokers, in which the
opinion or the counsel Of the cOTamittee Is
directly contraverted. This letter says in
part:
"A spirit of unrest and insecurity
dangerously approaching d suspicion of
unfair dealing and bad faith IS pe-.ad-
ing the minds Of mercha ntS, AMI the
Drokera called upon today to advise their
clients where and how they may obtain
security and indemnity in their policies
OF insurance are compelled to combat
one OF TWO arguments. either that the
that the companies have intrenchei
themselves behind a committee for the
express and ayowed purpose of coIIec-
tiVely withStanding. Iitigating and de-
Tending all claims of loss upon all kinds
Of merchandise against all classes of in
sured. under all forms Of policies with
out any legal or moral justification
whatsoever.
- On the question of the losses on the
Iarrant Building and the contents, the
letter goes on to say
The insurance companies well knew
the contents Of the ':'arrant building:
they well knew the use to which every
square foot Of every floor of that build
ing was put. Upon this their
own examination and survey. thew re-
ported as recently as May 49, 1893. 'ex-
posiires not serious, condition fair ac-
cePted payment of the premium and is
sued their policies No change in the
condition or surroundings has occurred
Upon what ground. then. can the com
panIeS repudiate liability
After referring to the clauses in the
opinion in regard to violations of the law
the letter says:
stripped of all unnecessary words. this
means that the committee is advised 70
assume the position that when the own
er OF property covered by policy Of fire
insurance violates a law or an ordinance
IN the care conduct. or use OF that prop
erty the policy in question is rendered
void. -