Fraudulent Statements in Application Voids Coverage & Exclusion Applies

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Restaurant fryers and cooking surfaces are common causes of destructive and unfriendly fires. Insurers know this and usually require that the insured maintain fire suppression systems as a condition precedent to effecting fire insurance protection for a restaurant.

In United Specialty Insurance Company, a Delaware corporation v. Shot Shakers, Inc., a Washington corporation; Scott Simpson, a Washington resident; Michelle Simpson, a Washington resident, No. 19-35192, USCA 9th (December 16, 2020) Shot Shakers, Inc. and Michelle and Scott Simpson (collectively, Appellants) appealed the district court’s summary judgment in favor of their insurer.

Conditions precedent to insurance must be enforced when they are clear and unambiguous. The Appellants lied on the application for the insurance and by doing so voided the policy. They also accepted a protective safeguards warranty and condition precedent to coverage that they knew at the time was not fulfilled.