Court finds plaintiff’s attorney fees covered by liability policy2020-04-23T00:34:36+00:00
Court finds plaintiff’s attorney fees covered by liability policy

One of the most misunderstood provisions in a Commercial General Liability policy is the first sentence, which provides that the insurance company promises to provide coverage for damages “because of” bodily injury or property damage. Many people, including seasoned insurance professionals, believe CGL policies merely provide coverage “for” bodily injury or property damage. We see this every day, including in motions filed by insurance companies.

Insurance companies often attempt to restrict coverage to only the bodily injury or property damage at issue in the underlying suit without any consideration of consequential damages. But the term “because of” demonstrates the insurance company’s promise to pay not only for the bodily injury or property damage but also all damages that are “because of” that bodily injury or property damage.

In Assoc. of Apt. Owners of the Moorings, Inc. v. Dongbu Ins. Co., a federal district court in Hawaii recently gave effect to the term “because of” and awarded coverage for the plaintiff’s attorney fees in an underlying property-damage dispute. Following an arbitration award against the policyholder, which included damages for property damage caused by the policyholder and the plaintiff’s attorney fees incurred in prosecuting the action, the policyholder’s insurance company agreed to pay for the property damage, but it refused to pay for the plaintiff’s attorney fees. The insurer argued, like many do, that the attorney fees are not damages for bodily injury or property damage.

After assessing national caselaw on this issue, the court held that the attorney fees awarded “because of” the underlying “property damage” were covered by the clear terms of the policy:

The issue before the Court is not whether attorneys’ fees and costs can be characterized as ‘property damage,’ but whether they can be characterized as damages that [the policyholder] became legally obligated to pay because of property damage. (emphasis in original)

A word to the wise: be wary when an insurance company says “our policy only covers damages for bodily injury or property damage.” That’s simply not true. It covers all damages because of bodily injury or property damage.

Opinion reprinted from WestlawNext with permission of Thomson Reuters. If you wish to check the currency of this case by using KeyCite on WestlawNext, please visit


Ball Janik LLP was founded in 1982 with six lawyers and a four-person support staff in Portland, Oregon. Since our firm’s inception, we have expanded our capabilities, our professionals, and geographic footprint. What started as a firm focused in real property and land use (known then as Ball Janik & Novack), has grown to include the insights of a team of 30-plus attorneys, with a combined six centuries of experience, and capabilities including Real Estate and Land Use, Construction Defect, Commercial Litigation, Insurance Recovery, Construction and Design, Employment, Finance and Corporate, Public Agencies and Schools, and Community Associations. With offices in Florida and Oregon, our regional growth has earned us a national reputation for upholding the rights of our clients.

Ball Janik LLP has been recognized by Chambers USA, U.S. News & World Report and Best Lawyers®, The Best Lawyers in America©, and Corporate International. Ball Janik LLP’s success and integrity have repeatedly made it one of “Oregon’s Most Admired Professional Firms,” according to the Portland Business Journal’s survey results of CEOs throughout the region.

No Blog Tiles found.