A recent federal court of appeals’ decision raises interesting questions for all policyholders, particularly commercial and residential landlords with tenants that grow, possess, and/or distribute cannabis, even where it is legal to do so under state law.
In K.V.G. Properties, Inc. v. Westfield Ins. Co., decided by the United States Court of Appeals for the Sixth Circuit on August 21, 2018, KVG claimed coverage for losses caused by its commercial tenant’s use of KVG’s property for cannabis cultivation. In connection with its cannabis business, the tenant removed walls, cut holes in the roof, altered ductwork and damaged HVAC systems, which ultimately cost around $500,000 to repair. KVG claimed that its loss was covered under its Building and Personal Property Coverage Form (the “BPP Policy”).
No comments:
Post a Comment