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Question
Our insured is a condominium.  One unit owner claims that her kitchen cabinets have termite damage.  The claim was denied under the Commercial Property portion of the policy (Causes of Loss - Special Form CP 10 30 10 90) stating the "insects, birds, rodents or other animals" exclusion.  Now the unit owner wishes to pursue her claim under the Liability portion of the policy (CG 00 01 10 01) alleging that the termite infestation originates in the condominium's utility room (handyman's).  We understand that no coverage is afforded under the GL since the kitchen cabinets are part of the building. Before we enter into any legal liability matters, we would like to address the coverage issue first.  Thank you for your input.

Answer
Hi Norma,

Unfortunately, the unit owner can bring suit...however, the court may throw it out.  In the meantime, the CGL would provide defense.  That being said, I can't imagine any attorney foolish enough to accept a case like this.  

In order to bring a successful suit, the unit owner would have to prove negligence on the part of the association.  I'm not sure how anyone could prove negligence related to termites in an environment where termites thrive.

Personally, I don't think it matters who is responsible for the cabinets.  The loss of use of the unit could be enough of an inconvenience to warrant some sort of compensation.  But again...while I'm not an attorney...i just don't see any issue that could cause a successful negligence-related suit.

Let me know if you have more questions.

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Jay K. Williams, AAI, AIP, CIC, CRM

Expertise

I can answer questions relating to the following coverages: personal auto; homeowners; commercial auto; commercial liability; commercial property; business income and all other property and casualty coverages.

Experience

I have been in the insurance industry in Florida since 1979. I am currently the president of a Florida domestic insurance company subsidiary. I've taught continuing education classes in Florida and across the country. I am quite familiar with all coverages including Florida Condominium master policies and unit owner policies. I also specialize in agent professional liability. I have been a professional educator since 2001.

Organizations
I am a member of the Florida Associaion of Insurance Agents, the state affiliate of the Independent Insurance Agents and Brokers of America.

Education/Credentials
I currently carry the following professional designations: Accredited Advisor in Insurance (AAI) Associate in Insurance Production (AIP) Certified Insurance Counselor (CIC) Certified Risk Manager (CRM)

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