SW Legal Educational Publishing

Sterile Bull Not Covered Property Damage Despite Disappointed Heifers
Description Dairy herd owner incurred economic losses due to purchase of breeding bull that turned out to be sterile. Bull seller's liability policy did not apply because sterility is not an accident and economic loss to the dairy was not property damage.
Topic Insurance
Key Words Accident, Property Damage
C A S E   S U M M A R Y
Facts Veriha bought a breeding bull from Imig for his dairy herd. The bull turned out to be sterile, so no calves were produced and Veriha lost income due to no breeding for one season. He sued Imig's insurance company for breach of warranty and negligent misrepresentation. Insurer contended there was no coverage. Trial court concurred, ruling that there was no occurrence resulting in bodily injury or property damage. Veriha appealed, claiming they suffered property damage.
Decision Affirmed. Imig's liability policy covers "bodily injury or property damage" caused by "accident." It also covers property damage "resulting from liability assumed by an insured under a written contract made before the loss or a warranty of goods and products. This coverage does not apply to a contract or warranty in connection with business activities of an insured." There is no property damage coverage here; "diminution in market value as well as use value is not property damage." Furthermore, the sterility of the bull was not an accident and the bull was sold as a business activity of Imig.
Citation Veriha v. Wisconsin Mutual Insurance Co., 1998 WL 18047 (Wis. App.)
576 N.W.2d 90 (Ct., App., Wisc., 1998)

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