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Arizona high court sets new test for ‘fortuitous’ insurance losses - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Arizona high court sets new test for ‘fortuitous’ insurance losses by Richard Sine Coverage Disputes Chubb Sep 2, 2026 A Chubb unit has won a ruling that clarifies the legal standard for when property damage qualifies as a covered, “fortuitous” loss under an all-risk insurance policy in Arizona. Great Northern Insurance had denied a $2.7 million commercial property claim tied to years of water and salt damage at a building leased to a fish processor, arguing the damage was too foreseeable to be insurable. Tuesday’s ruling, Industrial Park Center, LLC v. Great Northern Insurance Co. , came from the Arizona Supreme Court, which was answering a legal question sent to it by the U.S. Court of Appeals for the Ninth Circuit. The case began when Industrial Park Center, doing business as Mainspring Capital Group and based in Arizona, sued Great Northern after the insurer refused to pay for structural damage at Mainspring’s commercial building. The tenant, Star Fisheries, had used water and salt in its operations for decades, gradually damaging the building’s stairs, walls and foundation. Justice Clint Bolick wrote that a loss is fortuitous, and therefore insurable, unless the property owner already knew when the policy took effect that the damage “had already occurred, was already in progress, or was certain to occur because no material contingency remained between the facts known to the insured and the loss-causing event.” “This is a subjective standard that focuses on the insured’s knowledge at the time of contracting,” Justice Bolick added. Justice Bolick rejected a stricter test used by a federal appeals court in a different case, under which a loss might not count as an accident if it “could reasonably have been foreseen.” He said that this ruling, Ingenco Holdings v. Ace American Insurance Co. from 2019 , could create an “entire class of uninsurable risks that are ‘reasonably foreseeable,’ largely defeating the purpose of insurance and eviscerating freedom of contract.” “Insurance companies are not powerless to minimize liability,” Justice Bolick added. “They can independently assess risks and either decline coverage altogether or use their drafting leverage to create additional express or general exclusions. By contrast, insureds who purchase all-risk policies are entitled to the benefit of their bargain, which encompasses risks that they did not know were certain to occur.” The ruling does not decide who wins the underlying case. A federal trial judge had granted Great Northern Insurance summary judgment using the stricter foreseeability test the state court rejected, so the case now returns to the lower federal courts to apply the new standard. Justice Bolick was joined by Chief Justice Ann Timmer, Vice Chief Justice John R. Lopez IV, and Justices James P. Beene, Bill G. Montgomery, Kathryn H. King and Maria Elena Cruz. Related News H1 property/casualty net underwriting gain up sharply: Verisk, APCIA September 2, 2026 Firm puts a $100M value on acting human September 2, 2026 Insurer escapes payment of $5.25 million judgment September 2, 2026 PICC’s profit surges 38% September 2, 2026 Keystone taps Baldwin exec as brokerage leader September 2, 2026 Reinsurance sidecar market surges to record high: Aon Securities September 2, 2026 Swiss Re buys QBE’s trade credit operation September 2, 2026 Verisk lifts annual catastrophe loss estimate to $171B September 2, 2026 Reinsurance buyers expect further price declines: Moody’s September 2, 2026 Facebook-f X-twitter Linkedin-in Business Insurance is a singular, authoritative news and information source for executives focused upon risk management, risk transfer and risk financing. 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