West Side Salvage, Inc. v. RSUI Indemnity Co., No. 16-3928 (7th Cir. 2017)Annotate this Case
West Side was working on ConAgra’s grain bin when it exploded. In 2014, the Seventh Circuit held that West Side was solely liable for the injuries that workers suffered in the explosion and was liable for $3 million in property damage to ConAgra’s bin. West Side had an $11 million excess insurance policy with RSUI. West Side sued, alleging that RSUI breached its duty to settle ConAgra’s property damage claim. The Seventh Circuit affirmed summary judgment in favor of RSUI. Under Illinois law, the damage-to-property clause excludes the claim from coverage. RSUI had no duty to settle a claim that the insurance policy does not cover. Holding otherwise would undermine the basic premise of the damage-to-property exclusion: that general liability policies are not intended to protect the insured from the normal risks of its business. The damage that West Side caused was one of the normal risks associated with its business of remedying hot grain bins before they explode. Even if West Side was only working on the grain when the explosion occurred, it is immaterial. The exclusion does not apply only to the precise area of the property being worked on if the work performed was poor.