The USDC for the District of Massachusetts recently held that deterioration constitutes hidden decay under the Additional Coverage for Collapse. The insured sought coverage after a portion of its property failed and fell to the floor. The policy provided coverage for Collapse caused by hidden decay. The policy did not define decay. However, the carrier denied coverage, relying on exclusions for loss caused by wear and tear, deterioration, and faulty, inadequate, or defective design or construction.
The USDC granted summary judgment in favor of the insured holding that “. . . the plain and ordinary meaning of ‘decay’ as used in the Policy encompasses a gradual deterioration or decline in strength or soundness . . .” Thus, since the Collapse was caused by “the progressive failure of the fasteners over a long period of time,” coverage was afforded under the Additional Coverage for Collapse caused by hidden decay. In reaching its ruling, the USDC further clarified that the Additional Coverage for Collapse superseded any general exclusions, and thus the exclusions relied on by the carrier were inapplicable.