The court ruled: The contractor has the burden of proving that the work was not completed before the insured event occurred, as a condition for receiving compensation.
Sep 17, 2024
By: John Geva, Attorney
background
Our case concerns a financial claim filed by a company engaged in the manufacture and assembly of greenhouses against an insurance company. The claim revolved around a demand for payment of insurance benefits under a contractor work insurance policy. The plaintiff claimed that during the construction of a greenhouse for a client (hereinafter: " the client "), damage was caused to the greenhouse due to a storm. The insurance company rejected the claim on the grounds that the insured event occurred after the end of the insurance period.
By: John Geva, Attorney
background
Our case concerns a financial claim filed by a company engaged in the manufacture and assembly of greenhouses against an insurance company. The claim revolved around a demand for payment of insurance benefits under a contractor work insurance policy. The plaintiff claimed that during the construction of a greenhouse for a client (hereinafter: " the client "), damage was caused to the greenhouse due to a storm. The insurance company rejected the claim on the grounds that the insured event occurred after the end of the insurance period.
The court's decision
The court ruled that in a claim for insurance benefits under a policy for contract work, the contracting company bears the burden of proof regarding its entitlement to insurance benefits. It must show that the policy provided coverage for the work it performed for the client, and that the terms and conditions of the policy for the application of insurance coverage were met. The contracting company is also required to prove that the work was actually performed before the insured event occurred, as well as its failure to complete and deliver it to the client before the insured event. The court emphasized that proof of property damage is not sufficient to establish a right to receive insurance benefits, since the policy does not cover property damage to the client due to weather conditions, but rather provides coverage for the plaintiff's contract work while it is being performed.
The court noted that a contracting company like the plaintiff is expected to present comprehensive documentation of its work, including orders, work agreements, delivery notes, evidence of wage payment, work logs, and documentation of the client's payments. However, in this case, the plaintiff presented only a greenhouse renovation agreement and an order from that day, which were scant and conspicuously missing.
In order to prove its entitlement to insurance benefits, the contracting company must present convincing evidence that supports its claims and proves that the conditions required to receive insurance coverage are met.
The court ruled that in a claim for insurance benefits under a policy for contract work, the contracting company bears the burden of proof regarding its entitlement to insurance benefits. It must show that the policy provided coverage for the work it performed for the client, and that the terms and conditions of the policy for the application of insurance coverage were met. The contracting company is also required to prove that the work was actually performed before the insured event occurred, as well as its failure to complete and deliver it to the client before the insured event. The court emphasized that proof of property damage is not sufficient to establish a right to receive insurance benefits, since the policy does not cover property damage to the client due to weather conditions, but rather provides coverage for the plaintiff's contract work while it is being performed.
The court noted that a contracting company like the plaintiff is expected to present comprehensive documentation of its work, including orders, work agreements, delivery notes, evidence of wage payment, work logs, and documentation of the client's payments. However, in this case, the plaintiff presented only a greenhouse renovation agreement and an order from that day, which were scant and conspicuously missing.
In order to prove its entitlement to insurance benefits, the contracting company must present convincing evidence that supports its claims and proves that the conditions required to receive insurance coverage are met.
After examining the evidence, the court determined that the plaintiff did not discharge the burden of proof imposed on her. Contradictions were found in the testimonies regarding the duration and date in which the greenhouse was renovated, and no sufficient evidence was presented for the performance of the work and its failure to complete it. Furthermore, the value of the work or the cost of repairing the damage was not proven. The court also identified an attempt to obscure the type of work, since while the agreement concerned the renovation of an existing greenhouse, the statement of claim presented a representation according to which the essence of the work was the construction of a new greenhouse.
The court emphasized the importance of presenting comprehensive and reliable evidence in insurance claims of this type, and ruled that the insured has a duty to provide accurate, consistent, and complete information to the insurance company. It was clarified that obscuring or obfuscating evidence, presenting partial or insufficient documentation, and contradictions in testimony or reports, act against the plaintiff's duty.
The court ruled that this is not the case for an innocent insured who has told the truth about the occurrence of an insured event. The plaintiff should, at the very least, have provided an explanation for the vague evidence she presented. The court emphasized that if the plaintiff had indeed performed any work on the client's land, she could have easily proven this through documents and testimonies available to her. The fact that the plaintiff did not present documentation that was in her possession, and that is important for proving the performance of work for which she claimed insurance benefits, is in her favor. This is especially in light of the fact that the defendant disputed the actual performance of the work, its nature and scope. The court ruled that the failure to present this documentation provides reinforcement for the defendant's version and raises significant doubts about the credibility of the plaintiff's claims.
The court emphasized the importance of proving the value of the work or the cost of repairing the damage by the insured, as these constitute a necessary basis for calculating the insurance benefits. Furthermore, the court noted that even if the plaintiff had succeeded in proving the performance of the work in the greenhouse and the occurrence of the damage during it – which is not the case – she would still have had to quantify her claim in order to calculate the benefits.
In summary, the court determined that the plaintiff failed on two key levels: First, she failed to prove that she had performed work on the greenhouse for the client, and that this work, if performed, was not completed and delivered to the client before the storm. Second, the plaintiff failed to quantify her claim reliably, and even provided conflicting versions regarding the value of the damage. In light of these material failures, the court dismissed the claim in its entirety.
The impact of the quality of the evidence on the prosecution
Summary
This ruling sends a clear message to the insured public and to insurance companies regarding the conditions for receiving insurance benefits in a contractor work policy.
The contractor has the burden of proving that the work was performed under the policy's coverage, that it had not yet been completed when the insured event occurred, and to back this up with conclusive documents. The lack of credible factual evidence may leave the contractor without insurance coverage.
For policyholders, the ruling serves as a warning sign regarding the consequences of presenting contradictory or incomplete information, which may lead to the rejection of the claim and the loss of entitlement to insurance benefits. The ruling allows insurance companies to more easily reject claims that do not meet the required burden of proof, particularly in the aspect of failure to complete the work before the insured event occurred.
This ruling sends a clear message to the insured public and to insurance companies regarding the conditions for receiving insurance benefits in a contractor work policy.
The contractor has the burden of proving that the work was performed under the policy's coverage, that it had not yet been completed when the insured event occurred, and to back this up with conclusive documents. The lack of credible factual evidence may leave the contractor without insurance coverage.
For policyholders, the ruling serves as a warning sign regarding the consequences of presenting contradictory or incomplete information, which may lead to the rejection of the claim and the loss of entitlement to insurance benefits. The ruling allows insurance companies to more easily reject claims that do not meet the required burden of proof, particularly in the aspect of failure to complete the work before the insured event occurred.
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