Burden On Insureds To Prove Exception To Exclusion In Property Policy

April 14, 2021 / Writing and Speaking

By Don R. Sampen

A common and near-universal rule of insurance coverage is that the insured has the burden of proving that a claim or loss falls within the scope of a policy’s insuring agreement, while the insurer has the burden of establishing the applicability of a policy’s exclusion from coverage. If the exclusion in question contains an exception, the question then arises of whose burden it is to prove that the exception applies. The question is not a new one in many jurisdictions. A recent appellate court decision, however, appears to have decided for the first time in Illinois that the burden falls on the insured.

Such was the holding in Wells v. State Farm Fire & Casualty Insurance Co., 2021 IL App (5th) 190460, where the court addressed the issue in the context of a property insurance policy. Ultimately, the court determined that, because the insureds failed to meet their burden, the insurer, State Farm, had no obligation to provide coverage for damage caused by frozen plumbing.


State Farm’s property policy covered a warehouse building located in Marion, Illinois, owned by the insureds, members of the Wells family. The heating system at one time included a furnace and a heat pump. But on at least three occasions prior to the incident giving rise to the coverage dispute, the building’s water pipes burst while the furnace and heat pump were both in operation. One of the insureds testified that these incidents led him to believe that the furnace was a dangerous way to prevent freezing in cold weather.

In 2010, the building’s heat pump was stolen and never replaced, even though State Farm paid the replacement costs for the pump. No evidence existed that the insureds did anything thereafter to repair or replace the building’s heating system.

In February of 2011, during a period of below freezing weather, the insureds cordoned off a 400 square foot area where the building’s water pipes were exposed and set up three space heaters to prevent the pipes from freezing. Nonetheless, a few days later the pipes burst, and the insureds submitted a claim to State Farm for the loss.

The State Farm policy generally covered damage to the building due to accidental loss. It contained an exclusion, however, for loss caused by water leaking from plumbing caused by freezing “unless . . . you do your best to maintain heat in the building.” Based on the exclusion, State Farm denied coverage, and the insureds filed this suit for breach of contract, bad faith and other remedies.

Following a bench trial, the trial court concluded that the exclusion applied and entered judgment for State Farm. The insureds appealed.


In an opinion by Justice Mark M. Boie, the Fifth District affirmed. The appellate court initially addressed the burden of proof. While the trial court placed the burden on State Farm to establish that the insureds had not done their “best,” the Fifth District said that was error.

Observing that the “do your best” language actually served as an exception to the no-coverage-for-leakage exclusion, the Fifth District said that no Illinois state court had actually decided the allocation of the burden in these circumstances. The court then relied on a Seventh Circuit case, Santa’s Best Craft, LLC v. St. Paul Fire & Marine Insurance Co., 611 F.3d 339 (7th Cir. 2010), and several out of state cases in defining the “majority view” that the insured has the burden of proving up an exception to an exclusion.

The Fifth District then turned to the meaning of the “do your best” language itself and found again that no Illinois case had interpreted the language. Out of state case law, however, had construed the phrase as requiring the insured to use “reasonable efforts” to comply with the policy’s requirement. The Court applied a “manifest weight of the evidence” standard in evaluating the correctness of the trial court’s findings.

Ultimately, the Fifth District agreed with the trial court that the insureds had not used their “reasonable” or “best” efforts. The Appellate Court relied on evidence that the insureds knew the heating system in the building was inadequate; they made no effort to repair it even though they had years to do so before the pipes froze in 2011; and the insureds’ own expert could not determine whether the space heaters overloaded the building’s circuits, causing the breaker to trip during freezing weather.

In addition, the Fifth District Appellate Court found that the space heaters were not sufficient to heat the whole building; they should not have been used more than a day or two; and even if all three were working at the time of the freezing temperatures, they may not have been sufficient to keep the pipes from freezing in any event.    

The Court therefore affirmed the judgment in favor of State Farm.

Learning Point: In Illinois, as in most other jurisdictions, the insured has the burden to prove up an exception to an exclusion.

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