Commercial Insurance Policy

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WI Court of Appeals – District III

Case Name: Secura Insurance v. Lyme St. Croix Forest Company, et al.

Case No.: 2016AP299

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Commercial Insurance Policy

Secura appeals the circuit court’s determination regarding the applicable policy limitation in a commercial general liability (CGL) policy Secura had issued. Applying Wilson Mutual Insurance Co. v. Falk, 2014 WI 136, 360 Wis. 2d 67, 857 N.W.2d 156, the circuit court held that there was a separate “occurrence” each time the fire entered onto a new piece of real property and caused damage. Consequently, the court held that Secura’s aggregate policy limit of $2 million applied, rather than the per-occurrence limit of $500,000. We agree that the aggregate limit applies, and we therefore affirm on that issue.

Hanover Insurance Company cross-appeals the circuit court’s determination that there was no coverage under an umbrella business liability policy Secura had also issued to the logging company. We generally agree with Secura that coverage is precluded pursuant to an exclusion for property damage “arising out of” the destruction of standing timberland by fire. However, we cannot conclude the exclusion applies to all property damage, as the record shows there may have been property damage that occurred prior to the fire reaching standing timber. Accordingly, we reverse and remand for a factual determination on the issue of damages relevant to coverage under the umbrella policy.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.