Insurance Coverage Q&A: Water Main Under the Slab

The insured commercial property had a water main break beneath the slab. The carrier is excluding the damage citing the language in the CP 10 32 08 08 water exclusion form. Specifically, they are relying on the language that excludes “water under the ground surface . . .” that flows through the floors etc. FC&S has addressed this issue several times over the years and has always taken the position, in the absence of other policy language, that water below the ground is meant to exclude subterranean water, not water from a broken pipe. And certainly not in a situation where, as with this policy, the pipe is specifically included as covered property. I have seen water from a pipe properly excluded when the language in the policy specifically said something like “regardless of the source of the water” which made the intent clear that they wanted to exclude both water from underground pipes as well as subterranean water.