Massachusetts Appeals Court holds that exclusion for property you own rent or occupy does not apply to third-party claim

In Porter v. Clarendon Nat'l Ins. Co., 76 Mass. App. Ct. 655 (2010), the underlying plaintiff, Porter, and defendant, Clarendon (the insured), owned abutting property. Porter alleged that Ryan had built a retaining wall and two parking spaces on Porter's property, resulting in continuing trespass. Ryan defended on the ground of adverse possession.

Ryan's insurers asserted that coverage was excluded by an exclusion for property damage to "property you [the insured] own, rent, or occupy." The insurers argued that because Ryan "occupied" the disputed property, there was no coverage.

The Massachusetts Appeals Court disagreed, stating:

That exclusion prevents the insured from using the general liability policy as property insurance. . . . "What the exclusion means is that the [general liability] policy was intended to cover only liability of the insured to third parties and not [damage to] the property of the insured." Here, the damage caused by the trespass was to at third party's property, not property of the insured.