Sixth Circuit Revives Builder’s Risk Coverage, Refusing to Let Insurer Escape on a Technicality

Short summary

The Sixth Circuit revived a builder's risk coverage claim in 3371 Reading, LLC v. Liberty Mutual Group, refusing to let an insurer deny coverage based on a fencing condition that was impossible to satisfy. The court held that insurance policies must be interpreted from a reasonable insured's standpoint and that hyper-technical conditions cannot void coverage where compliance is impossible. The court also required the insurer to demonstrate prejudice from any condition breach.

• •Sixth Circuit ruled insurers cannot deny coverage based on impossible-to-satisfy policy conditions
• •Policies must be interpreted from a reasonable layperson's perspective
• •Insurer must show prejudice from condition breach, similar to notice/cooperation provisions

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