Opinion ID: 2972650
Heading Depth: 2
Heading Rank: 2

Heading: Property Insurance

Text: Federal also provided Norvest/Norquick with property insurance subject to certain limitations and exclusions. (J.A. at 670-71, 674-76.) In that policy, only the “Mechanical Breakdown” and “Ammonia Contamination” exclusions are relevant to this case. The Mechanical Breakdown exclusion states This insurance does not apply to loss or damage to property caused by or resulting from mechanical breakdown of that property. This Mechanical Breakdown exclusion does not apply to: • loss or damage that results to other insured building or personal property; or • ensuing loss or damage caused by or resulting from a peril not otherwise excluded. (J.A. at 670 (italized emphasis added; bold emphasis in original).) The Ammonia Contamination exclusion states This insurance does not apply to loss or damage caused by or resulting from the discharge, dispersal, seepage, migration, release or escape of ammonia from any processing equipment, plumbing system, refrigeration system, cooling system or heating system. This Ammonia Contamination exclusion does not apply: • if the discharge, dispersal, seepage, migration, release or escape of ammonia is caused by or results from any of the specified perils; or • to ensuing loss or damage caused by or resulting from a specified peril. (J.A. at 674 (italized emphasis added; bold emphasis in original).) The Federal policy identifies the following as “specified perils”: • aircraft or self-propelled missiles; • explosion; • fire or lightning; • leakage from fire protection equipment; • mine subsidence; • riot or civil commotion; • sinkhole collapse; • smoke; • vandalism; • vehicles; • volcanic action; or • windstorm or hail. (J.A. at 581.) No. 03-2479 Federal Ins. Co., et al. v. Hartford Page 5 Steam Boiler Inspection and Ins. Co. HARTFORD POLICY LANGUAGE The Hartford policy provides Norvest/Norquick coverage for “Equipment Breakdown.” (J.A. at 448.) The insurance “applies to the direct result of an ‘accident’ to ‘covered equipment.’” (J.A. at 448 (emphasis added).) Per the terms of the Hartford policy, an “accident” is “direct physical loss” from a “[m]echanical breakdown, including rupture or bursting caused by centrifugal force.” (J.A. at 448.) The Hartford policy specifically provides coverage for the loss of perishable goods “due to contamination from the release of refrigerant, including but not limited to ammonia.” (J.A. 449 (emphasis added).) The Hartford policy excludes coverage for “[f]ire or combustion explosion, whether or not caused by or resulting from an ‘accident’” and “[w]ater or other means used to extinguish a fire, even when such an attempt is unsuccessful.” (J.A. at 464-65.)