Security & the Law: Is Accepting Payments a Waiver of Exclusion?
The property owner of the shopping center filed a claim after an unoccupied retail unit in the shopping center was burglarized. The perpetrators apparently forced their way through a locked rear door, stealing copper wire and other electrical equipment. The same store had been burglarized approximately one year earlier and it is alleged that the unit’s burglary alarm system was rendered inoperable at that time and never repaired.
The next issue was whether the exclusion was waived by the insurance company. The court pointed out that a reasonable fact finder could find that the insurance company had waived its exclusion because after having received the report showing that there was not a functioning, centrally monitored burglar alarm at the site it still failed to cancel coverage, adjust the policy premium or demand that the property owner come into compliance. Further, even if it is true that the policy premiums were paid prior to the inspection, it is not merely acceptance of a premium, but also the continuation of coverage that can constitute a waiver of an exclusion defense. The motion for summary judgment to dismiss the complaint was therefore denied, leaving the property owner pointing the last finger.