Water Rot Insurance Due to Faulty Installation or Design of a Roof

IIn Schloss v. Cincinnati Insurance Co., 54 F. Supp. 2d 1090 (M.D. Ala. 1999), water rot occurred due to either the faulty installation or design of a roof. The applicable insurance contract provision provided that it did not cover "loss caused by wear and tear, gradual deterioration, rust, corrosion, fungi, mold, dry or wet rot . . . But we do insure ensuing covered loss unless another exclusion applies." Id. at 1094. The court interpreted this clause to provide that when a non-covered loss occurs, only a separate loss that occurs as a result of the non- covered loss would be protected. See id. at 1094-95. Applying this provision, the court determined that the expenses incurred in replacing the roof were a part of the cost of repairing the non-covered loss, not a separate ensuing loss, and therefore the expenses were not covered. See id. at 1095; See also Vermont Elec. Power Co. v. Hartford Steam Boiler Inspection & Ins. Co., 72 F. Supp. 2d 441, 445 (D. Vt. 1999) (holding that an ensuing loss is one that occurs subsequent to the excluded loss; if original loss was also considered an ensuing loss, the exception would swallow the exclusion).