Warehouse Party Injury Covered by Homeowner's Insurance
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The North Carolina Court of Appeals has held that two guests injured in a fire during a homeowner's birthday party held at the warehouse could recover under the host's homeowner's insurance. This is true even though the warehouse party was held more than twenty miles from the host's home. The host resided in Durham and the warehouse is in Raleigh.
The homeowner's policy covered this loss because of a broad interpretation of a standard clause in the insured's homeowner's policy. This provision defined "insurance location" to include "any premises used in connection with the insured's home or with property used as a residence."
The insurance company argued that there was no coverage for this warehouse fire because it occurred too far away from the insured's house.
The court held that absent express language in the homeowner's policy, there is no geographical limit on what qualified as an insured location.
The host held the celebration in an empty warehouse he subleased in Raleigh. Within a month of leasing the warehouse, the homeowner held a party with wine and champagne, using drapes made of a flammable material, and fifty lit candles. The insured threw a birthday party for himself and invited 100-150 people.
A fire occurred in the early morning hours of the warehouse party and two guests sued the host for their injuries. The host of the party then filed a claim with his homeowner's insurance company. The court held that, although the Raleigh warehouse was not listed in the policy, it was covered because it was being used in connection with the homeowner's residence. This is true even though the homeowner's residence was in Durham.
This case is an example of insurance coverage being recovered from unexpected sources.
For more information please refer to our section on Premises Liability.