04-22-09 Wakefern Food Corporation v. Liberty Mutual Fire
Insurance Company
A-2010-07T3
We construed an insurance policy covering a group of
supermarkets against food spoilage and other damages due to loss
of electrical power. We concluded that a 2003 electrical
blackout, which left portions of the United States and Canada
without power for several days, was a covered occurrence. The
policy applied to loss of power due to "physical damage" to
electric generating facilities away from the supermarkets'
premises. We concluded that the undefined term "physical
damage" was ambiguous and should be construed, consistent with
the insureds' reasonable expectations, to include loss of
function, e.g., a situation in whicphysically unable to produce electricity.
