Broker Check

The Surfside Building Collapse and Insurance

July 01, 2021

Since the 12 story building in Surfside, FL collapsed the focus has been on the loss of life and ongoing search and rescue efforts. There will be investigations but the cause probably will not be known for months if not years. Speculation about possible cause at this point is educated guesses at best.

While we can assume that the building and its contents were insured, it will take a long time before most claims are settled. In addition to determining the cause of collapse, we don't know the extent of policy coverage. ("If you've read one insurance policy, you haven't read them all".) The following remarks are general information only and not statements about actual coverage.

Property policies even if broadly written only cover collapse when caused by specific perils. Other exclusions are earth movement (natural or man-made) and water damage including underground seepage.

A LinkedIn post by consultant James Cohen discusses possible causes:

  • Long term foundation deterioration possibly caused by salt water.
  • Work on the roof and equipment possibly overloading.
  • A neighboring building completed in 2019 and ongoing construction in the area may have disturbed the soil.
  • Building support may not have provided redundant protection against structural failure.
  • Soil erosion may have weakened foundation.
  • Condominium units may have been remodeled causing structural weakening.          

Depending on policy terms, if one of these did cause the collapse there may be no coverage for the building.

If the survivors have renters insurance, it may cover loss of personal property and additional living expense, depending on how individual policies are written.

If investigations find that building owners or managers, contractors or government agencies were negligent we can assume survivors will file liability claims. In addition to general liability claims for injury or death there will be claims against condominium directors and officers. D&O policies do not cover bodily injury claims and may not cover claims "arising out of" bodily injury, depending on policy wording. Contractors' liability policies often contain many exclusions which may bar coverage.

To sum up, there is much we don't know. We will be watching further developments.