Providence Washington Insurance v. Volpy & Koenig

Citation: ''Providence Washington Ins. Co. v. Volpy & Koenig, P.C.,'' 396 F. Supp. 2d 1 (E.D. Pa. 2005).

The insured is an intellectual property law firm in Philadelphia. In July 2003, their computer crashed because of a cooling failure in the server room. It cost the firm $135,000 to repair the system, and the firm filed a claim under its commercial property insurance policy for the loss. Payment was refused, and the insurance company filed a declaratory judgment action against the law firm, which retained outside counsel experienced in insurance matters.

The policy excluded certain claims. One of them was for damages caused by:


 * Dampness or dryness of atmosphere, or changes in or extremes of temperature, unless such conditions result from physical damage caused by a covered cause or loss to an air conditioning unit or system, including equipment and parts, which is a part of, or used with the electronic data processing equipment. (Emphasis by the Court.)

Noting the usual rules that insurance policies “must be interpreted in their ‘natural, plain and ordinary sense’” (citation omitted), and that an ambiguous “policy provision must be construed against the insurer as the drafter of the policy,” Judge Bartle decided that, with one exception, “[d]amage or loss caused by any change in temperature no matter how subtle, over any period of time is not covered. . . . The ‘extremes of temperature’ clause allows the insurer to deny coverage where constant, yet excessive, heat or cold caused the loss.”