The importance having a clear understanding of what your insurance policy does and does not cover was highlighted last week when several trade publications picked up a story about a wine collector who was sold about $18 million worth of counterfeit wine.
The collector had a property insurance policy, and when his claim was denied he sued for breach of contract. A California trial court upheld an earlier decision that the property policy simply does not cover fraud of the kind he experienced.
The judge’s opinion stated: “The plain language of the “PERILS INSURED AGAINST” provision makes it clear that the insurer was insuring against “direct and accidental loss . . . to covered property…” That is “against any losses to the wine not against any losses to the collector’s finances or to his unrealized expectations as to the value of the wine he had purchased.”