New-York tribune., 1901-03-09
FIRE INSURANCE VALIDITY
QUESTION INVOLVED IL ATTITUDE OF
COMPANIES N RELATION TO LOSSES
N TARRANT BUILDING.

The settlenent OF the losses growing out OF the
destruction OF the Tarrant Building has aroused
considerable comment in insurance and general
business circles This fire occurred on october q
1900 and two days later the insurance companies
interested. nearly fifty in number appointed a
counlittee. Of which Edward T. BeddaN was mace
chairman, 10 inquire into il. On November TINS
committee furnished with opinion which set
forth in substance that If the owner had in the
building quantities OF any OF the prohibited articles
"a excess OF the quantities allowed by law the
policies would 20 such owner, be void. ana also
so far such contents belonged to persons other
than Tarrant & Co.. and were insured under sepa-
rate policies. where such insured themselves, vio-
lated neither the provisions OF the respective con-
tracts OF insurance nor infrineed upon statutory
provisions or ordinances il would in general ap-
pear clear that such insured have valid claims for
the amount of their respective losses"
II is the last clause OF the opinion which has
been commented on as expressing an entirely new
theory of the liability of fire insurance companies
The effect or such an opinion is regarded as in
validating every insurance policy on any building
in which by either negligence or overt act any
violation Of law occurs. The contention that such
violation frees the company from liability has
created much disQuietude, especially among those
who have valua ble stocks Of drugs which they have
heavily insured. They say that II the policies held
on the drugs in storage iu the Tarrant Building
invalid because of lack 81 compliance with the
statutes on the part Of the then there can
he no surety security is afforded by insurance
policies anywhere
On this subject 2 circular letter has been sent TO
the companies interested by firm Of insurance
brokers which the opinion Of the counsel of the
committee directly oonrraverted. This letter
saws IN part
A spirit Of and insecurity dangerously APP
urOaching suspicion of unfair dealing and baa
faith) Is pervadng the minds of merchants and the
brokers called unon to-day 10 advise their clients
where and how they may obtain security and in
20 combat one Of TWO arguments. either that the
contract of insurance docs rot insure or that tho
companies have intrenched themselves behind a
committee for the express and aVowed purpose or
collectively withstandiGg. lt:gatng and defendinE
ali claims of loss unon al kinds ~ mercha7dise
against all classes of insured, under all forms OF
policies. without any legal or moral Justhoaton
Whatsoever.
On the question Of the losses on the Tarrant
building and the contents the letter goes on 10 say
The insurance companies well knew the contents
of the Tsrrant Building; they well knew the use 10
which every square foot Of every floor OF that
buildng WAS put. Upon this. their own eN-
sr1ination and survey they reported recently as
Nav - 1899. exposures not serious. 'coildltlon
fair accented uayreut % the premium and issued
thefr policies No change in the condition or sur
rourdirgs has occurred. Upon what ground, tnei''
can the companies repudaJe liati4ity?
After referring the clauses in the opinion IN re-
rard 10 violations Of the law the letter says:
srrinred Of Oh unnecessary words. this means
fion that when the owner OF property covered by
policy of FIRE insurance violates law or an or
dinance in the care. conduct or use OF nat prop
srty the policy in question is rendered void