2 days ago

You Get What You Pay For - Less Coverage Means Lower Premium
Post number 5275

When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies

In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.

Facts and Background

Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel's brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from pre-existing building damage at the inception of the policy.

Lido reported the loss to AIX. Upon investigation, AIX concluded that the wall collapsed due to ongoing wear and tear and corrosion affecting the anchors securing the veneer to the building, determining that pre-existing damage was a contributing factor. Based on this, AIX denied the claim, citing the policy exclusion for preexisting damage.

LEGAL ISSUES

The central issue was whether the insurance policy's exclusion for pre-existing building damage applied to the circumstances of the wall collapse. The exclusion stated, "This insurance does not apply to any loss or damage directly or indirectly caused by or resulting from any building damage existing at the time of this policy's inception."

ANALYSIS

Both parties offered expert testimony both of whom agreed that the wind was the main cause but conceded that it was possible the corroded anchors also contributed and acknowledged that preexisting damage played some role in the collapse.

The collapse was at least indirectly caused by the corroded anchor ties. As a result, the trial court ruled that the policy exclusion applied and entered summary judgment for AIX, denying coverage for the incident.

POLICY INTERPRETATION

The Court of Appeals honors the intent of the parties as expressed by the words of the policy. If the language is unambiguous, the Court gives control to its plain and ordinary meaning and construes any ambiguity in favor of coverage.

A concurrent cause is when two perils converge at the same point in time, contemporaneously and operating in conjunction to cause a loss. A concurrent-causation provision governs the level of coverage, if any, that exists when there are multiple causes that contribute to a loss, some of which may be covered while others are excluded.

An anti-concurrent-causation clause like the one in the policy there is no coverage if even one contributing cause is an excluded event.

AIX says the undisputed facts show that the corroded anchors were a cause of the wall's collapse and thus were at least an "indirect" cause of the loss under the exclusion, if not a direct one. Because two causes contributed concurrently to loss, and one cause was excluded from coverage, the anti-concurrent-causation clause plainly precludes coverage.

Illinois generally adheres to the concept of freedom of contract and the notion, stated bluntly, that you get what you pay for. Less coverage generally means lower premiums; the more expansive the coverage, the more expensive the premium.

As the exclusion applies here the Court of Appeals found no question of material fact precluding summary judgment. The Court of Appeals affirmed the trial court and that summary judgment for defendant insurer was proper.

ZALMA OPINION

The clear and unambiguous language of the policy eliminated coverage if one of more than one concurrent cause of loss was excluded. The Court of Appeals agreed with the trial court that the exclusion applied because both experts agreed that the the rusted and weak and corroded anchor ties, the loss was excluded and that the anti-concurrent cause provision was sufficient to defeat coverage when coupled with pre-existing damage exclusion.

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