Rip and Tear Coverage in Florida

Insurance coverage always seems to be a topic of discussion between insurance providers and the courts. Exactly to what extent policy holders are covered is always being further defined, contested and redefined. The latest issue to arise during their ongoing back-and-forth: rip and tear coverage for commercial general liability insurance.

What is Rip and Tear Coverage?

Rip and tear refers to damages that non-defective property incurs in order to make repairs to defective property. Essentially, this means the necessary removal or destruction of any property that must be cleared to address property defects.

Commercial general liability (CGL) policies provide coverage for property damage caused by an occurrence. In Florida, an “occurrence” includes property defects.

Though coverage does not extend to include repairs to the defective property itself, Florida law addresses that coverage applies to property damage caused by defective works.

Florida Rip and Tear Coverage

Recently, Florida courts decided that CGL policy holders would be entitled to rip and tear coverage.

In two separate instances, Florida courts ruled in favor of rip and tear coverage for policyholders who experienced property damage as a direct result of other property defects or defective work.

Insurance Companies Respond

In response to the recent rulings, insurance companies have introduced new exclusions that seek to severely limit the effectiveness of rip and tear coverage. Some may eliminate it entirely.

What It All Means for CGL Policy Holders

It is unclear how these measures by insurance providers will play out. It is likely, though, that the courts will respond to these exclusions, continuing the back-and-forth between the two.

In the meantime, CGL policy holders should pay special attention to all-inclusive language in added endorsements to CGL policies that address limitations to rip and tear coverage.

Consumer Resources

To find out more about the recent court rulings, check out these links:

http://media.ca11.uscourts.gov/opinions/pub/files/201411639.pdf

https://policyholderreport-redesign.lexblogplatform.com/wp-content/uploads/sites/268/2015/03/Pavarini-v-ACE.pdf