Think Your Building’s Insured for Water Damage? Maybe Not, Says a New York Court

Insurance for damage caused by a "plumbing system" is only covered if the overflow originated on your own co-op or condo’s property, but not if the backup originated from a municipal water system or other offsite source, according to a new court decision — highlighting the need for boards and their management to ensure that insurance-policy terminology is well-defined and covers what the board believes to be covered. Attorney Richard C. Bennett of Cozen O’Connor writes at Lexology.com that in Michael J. Pichel v. Dryden Mutual Insurance Company that the unanimous decision by a three-member intermediate appellate court now defines "plumbing system" as the pipes and other hardware on the insured premises itself. Noting that this was the first case of its kind in New York State, the court said other jurisdictions previously had reached the same conclusion.