In case you didn’t know it, many property insurance policies contain an exclusion that bars coverage for damage caused by “water that backs up or overflows from a sewer.” So, that raises the question: does this exclusion apply if what backs up is “sewage” rather than just plain old rainwater? The Ohio Supreme Court just waded in on this question and said the exclusion does, in fact, bar coverage whether it’s sewage or rainwater. In
AKC, Inc. v. United Specialty Insurance, 2021-Ohio-3540, sewage backed up into a nightclub in Akron. The insured asked its insurance company to pay for the damage and clean-up costs that occurred. The insurance company plugged its nose and said no: the policy’s exclusion for water backing up from a sewer barred coverage. The company that the nightclub hired to do the clean-up thought that stank. So it took an assignment of the claim and sued the insurer for coverage. The trial court sided with the insurer on summary judgment, but the appellate court found that conclusion odorous, concluding that there was a difference between sewage and rainwater and finding the exclusion only barred coverage for rainwater backups. The insurer felt flushed and appealed to the Ohio Supreme Court. The majority reversed the appellate court, reasoning that the average person with a plunger knows that any water coming up from a sewer is going contain sewage of some sort; so the language clearly and unambiguously excludes coverage. Two dissenting justices thought that was a load of, well, you know, noting that the insurer should have stated “water or sewage” in the exclusion if that’s what it meant.