When You Fail to Mitigate Your Loss; an Insurance Perspective
The Third Department in Binghamton Precast & Supply Corp. v Liberty Mutual Fire Insurance Company holds that the defendant raised a triable issue of fact as to whether the plaintiff mitigated its losses relative to a business interruption policy.
Appellate Update – Third Department: Failure to Mitigate Insured Losses
In Binghamton Precast & Supply Corp. v Liberty Mutual Fire Insurance Company, the plaintiff brought suit against its insurer to recover for business losses accrued when an essential piece of machinery broke down,causing a cessation in production for approximately two days. The plaintiff had a business interruption policy with the insurer which covered the piece of machinery in question and moved for summary judgment seeking a specific amount of alleged losses. The trial court granted that motion and the defendant appealed. As part of its appeal, the defendant argued that the plaintiff had not established its rightto the amount sought. Specifically, thedefendant cited to a provision of the insurance agreement which required the plaintiff to reduce its losses by undertaking efforts to make up for lost business within a reasonable period of time and “make use of every reasonable means to reduce or avert loss, including working extra time or overtime.” The defendant argued that the plaintiff could have scheduled production on the ensuing weekend, after the machinery had been fixed. The Third Department agreed that there was a triable issue of fact as to whether the plaintiff had appropriately mitigated its losses and reversed the Supreme Court’s decision.