A federal courtroom determination from Minnesota supplies a sobering take a look at how beauty injury exclusions could also be interpreted in hail-damage circumstances involving steel roofs. The case, Cannon Falls Space Colleges, ISD 252 v. The Hanover American Insurance coverage Firm, 1 concerned a dispute over whether or not widespread hail dents to steel faculty roofs constituted lined injury or had been excluded as merely beauty. I need to give a shout-out to Steve Badger for bringing this case to my consideration.
The information had been largely undisputed. A hailstorm struck the Cannon Falls Elementary Faculty and Excessive Faculty in April of 2022. Each buildings had steel roofs, and the storm triggered widespread indentations throughout the roof panels. There have been no punctures, no disengaged seams, and no leaks, both instantly after the storm or within the three years that adopted. Hanover paid for different hail-related injury to the properties however denied protection for the roofs based mostly on a beauty injury exclusion contained within the coverage.
The exclusion at problem acknowledged:
We is not going to pay for beauty injury to roof surfacing brought on by wind and/or hail. For the aim of this endorsement, beauty injury implies that the wind and/or hail triggered marring, pitting or different superficial injury that altered the looks of the roof surfacing, however such injury doesn’t forestall the roof from persevering with to perform as a barrier to entrance of the weather to the identical extent because it did earlier than the beauty injury occurred.
The college district argued that whereas the roofs weren’t leaking, the hail dents instantly weakened the steel panels. Their knowledgeable testified that dented steel has already used up a part of its plastic pressure capability, making it extra inclined to rupture from future hail, wind masses, or snow masses. In response to the district, a roof that’s now weaker and extra more likely to fail underneath future climate occasions doesn’t perform as a barrier to the weather to the identical extent because it did earlier than the hailstorm. The district emphasised that the coverage doesn’t restrict “the weather” to rainwater alone, and that hail, wind, and snow are plainly parts the roof should resist. In addition they identified that Hanover bore the burden of proving the exclusion utilized and had carried out no testing to ascertain that the roof’s efficiency was unchanged.
Hanover framed the case very otherwise. It argued that the exclusion is evident and unambiguous and focuses on current efficiency, not future threat. Hanover’s place was that if the roof didn’t enable the weather contained in the constructing earlier than the hailstorm and doesn’t enable the weather inside after the hailstorm, then it continues to perform as a barrier to the identical extent. Hanover argued that elevated susceptibility, decreased service life, or theoretical future failure are irrelevant underneath the plain language of the exclusion. In Hanover’s view, dents that alter look however don’t trigger leaks or breaches are precisely what this beauty injury exclusion was designed to take away from protection.
Choose Katherine Menendez agreed with Hanover and granted abstract judgment in its favor. The courtroom held that the beauty injury exclusion was unambiguous and that its focus is on whether or not the roof at present features as a barrier to the weather, not whether or not it could be extra more likely to fail at some unknown level sooner or later. The courtroom emphasised that the coverage asks whether or not the injury “doesn’t forestall the roof from persevering with to perform as a barrier,” and that this language is written within the current tense. The phrase “to the identical extent because it did earlier than” was not learn to require an engineering comparability of power, security margins, or remaining service life. As an alternative, the courtroom handled it as a practical inquiry: ‘Does the roof nonetheless preserve the weather out or not?’
The courtroom was express that, even when the varsity district’s knowledgeable testimony had been accepted as true, the end result wouldn’t change. The roofs had not leaked, had not allowed any incursion of the weather, and continued to carry out their fundamental perform as that they had earlier than the storm. Due to that, no affordable jury might discover that the hail injury prevented the roofs from functioning as limitations to the weather to the identical extent as earlier than. Importantly, the courtroom denied Hanover’s movement to exclude the policyholder’s knowledgeable as moot, making clear that the ruling was based mostly on coverage interpretation slightly than a rejection of the knowledgeable’s credibility.
In reaching its determination, the courtroom relied on comparable rulings from different jurisdictions deciphering practically equivalent beauty injury exclusions, together with circumstances holding that dents which can shorten a roof’s lifespan or improve the chance of future failure are nonetheless excluded as long as the roof presently retains the weather out. The courtroom predicted that the Minnesota Supreme Court docket would undertake the identical interpretation. The docket indicated that the ruling is being appealed.
This case is a reminder that beauty injury exclusions are usually not window dressing. When written this fashion, courts are more and more keen to implement them precisely as written, even the place there’s credible proof of structural weakening. The excellence drawn by the courtroom is just not between robust roofs and weak roofs, however between roofs that at present fail and roofs that haven’t but failed. For policyholders, that could be a harsh line. It shifts the true battle to coverage language, underwriting, and renewal negotiations lengthy earlier than the hail ever falls.
Steve Badger was proper to flag this determination. Whether or not you agree with it or not, it’s a clear sign of the place many courts appear headed. Ignoring it could be a mistake.
Thought For The Day
“A phrase is just not a crystal, clear and unchanged; it’s the pores and skin of a residing thought and will fluctuate vastly in shade and content material in line with the circumstances.”
— Oliver Wendell Holmes Jr.
1 Cannon Falls Space Colleges, ISD 252 v. The Hanover American Ins. Co., No. 24-cv-3383, 2025 WL 2976533 (D. Minn. Oct. 21, 2025). (See, Cannon Falls Movement for Abstract Judgment, Hanover Movement for Abstract Judgment, and Cannon Falls Response to Movement for Abstract Judgment).