The Third Circuit recently decided whether coverage exists under a commercial and general liability policy for the damage caused by a decomposing body. In Creagh, the Third Circuit rejected the insureds’ claim that the repressive and permeating odor from decomposition was responsible for their loss. Certain Underwriters at Lloyds of London Subscribing to Policy No. SMP3781 v. Creagh, 563 F.App’x 209 (3d Cir. 2014) (unpublished). Instead, the Third Circuit relied on broad exclusionary language in ruling that the exclusions for seepage and microogranisms barred recovery for the damage to an insureds’ building that was caused by a tenant’s decomposing body.
In Creagh, a property owner and building manager purchased a CGL policy for a four story building containing apartments and offices. In one of the second floor apartments, the insureds’ tenant collapsed over his toilet and died without detection. Nearly two weeks passed before the body was discovered. In the meantime, the tenant’s body began to decompose and the accumulation of bacteria expelled biological material from the deceased’s body. The biological material infiltrated the kitchen and bedroom of the deceased’s apartment. It also leaked into the bathroom of a different tenant located directly below the deceased’s apartment. The biological material caused extensive damage to the apartment building, which required renovations totaling $180,000. When the insureds submitted a claim for this amount, the insurer denied it under the exclusions for microorganisms, seepage, and pollution. The insurer sought a declaration that the policy did not cover the damage. The U.S. District Court for the Eastern District of Pennsylvania noted that there was no dispute that the insureds met their initial burden of showing a loss within the scope of the policy. Instead, the case focused on whether the exclusions precluded recovery.