?? The federal district court considered the?applicability of a document retention clause in Amtex Bancshares v. Bancinsure, Inc., 2012 U.S. Dist. LEXIS 140557 (E.D. Tex Sept. 11, 2012).
?? Hurricane Ike caused severe damage to the insured's bank on September 13, 2008. The policy issued by Bancinsure, Inc. covered the property and its contents. The insured submitted its claims to Bancinsure, which?made some payments. A large amount of banking documents was damaged and had to be restored. The total cost of unpaid document restoration was $293,982. The insured sued.
?? An endorsement limited coverage to "specified causes of loss" under the policy, defined, in relevant part, "to windstorm and water damage sustained due to accidental discharge or leakage of water." In its motion for summary judgment, Bancinsure argued coverage for damage to the documents did not include water damage caused by flood.
?? Bank employees testified they did not know how the documents became wet. Some damaged documents were above the flood line. Bancinsure argued that even if the insured could establish that the documents above the flood line became damp or mildewed because of something other than flood, the insured had no way of segregating the costs related to flood damage separated from the costs relating to other causes.
?? The court denied summary judgment on the document restoration. Based on the witnesses' testimony, it was possible that the restoration damages were due, in at least some part, to a cause other than flood. One witness testified that at least some of the documents were damaged from an excess amount of moisture due to wind and "stuff protruding through the roof." Accordingly, there was at least some evidence that the document restoration costs could be partially covered under the policy.
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