TRB Investments, Inc. v. Fireman's Fund Insurance

This case involves a property insurance policy that withdraws coverage for specified perils while the insured premises are vacant. The pertinent exclusion contains an exception stating that buildings “under construction” are not considered vacant. The question before us concerns whether the work being performed on the building at the time of the loss rendered the building “under construction” such that the vacancy exclusion does not apply.

Plaintiffs argue their efforts meant that the structure was “under construction” and therefore covered under the policy when a water heater or waterline ruptured and caused substantial damage to the property. Defendant insurer disagrees with this interpretation of the policy. The Court of Appeal affirmed a grant of summary judgment in favor of the insurer, determining that the word “construction,” as utilized in the policy, “envisions the building of a new structure,” which did not occur here.

We reverse the Court of Appeal. As used in the insurance policy here, the word “construction” cannot reasonably be understood to be limited only to the erection of a new structure. Rather, the term contemplates all building endeavors, whether…