## Facts

- State Farm Fire and Casualty Company insured Donald Roberts under a homeowners “all-risk” policy covering physical loss to the dwelling, subject to exclusions.
- The policy excluded certain losses, including loss caused by insects.
- The policy also contained an ensuing-loss provision: if an excluded event occurred, a later loss that followed could still be covered unless that later loss was itself excluded.
- The policy listed additional excluded categories that could bar coverage even for a later event (including items such as marring and settling).
- Roberts discovered bees in his attic and paid out of pocket to exterminate them; he did not seek reimbursement for extermination.
- After the bees were exterminated, the vacated hive began leaking honey into Roberts’s dining room, causing damage requiring repair.
- Roberts filed a claim for the honey-leakage damage under the homeowners policy.
- State Farm denied the claim on the ground that the loss was insect damage and therefore excluded.
- Roberts sued State Farm for coverage under the policy.
- The trial court granted summary judgment to State Farm, and the intermediate appellate court affirmed.
- Roberts sought review in the Arizona Supreme Court.

## Issues

1. Does a homeowners policy that excludes loss caused by insects nevertheless cover, under an ensuing-loss provision, physical damage caused when honey leaks from a beehive after the bees have been exterminated, where the honey damage is not otherwise excluded?

## Decision

- The Arizona Supreme Court reversed the summary judgment for State Farm.
- The court held that the honey-leakage damage qualified as an ensuing loss and was covered because the later loss was not independently excluded by the policy.
- The case was remanded for further proceedings consistent with the coverage ruling.

## Legal Principles

- Under an all-risk property policy, the insured bears the initial burden to show a direct physical loss within the policy’s coverage grant; the insurer bears the burden to show that an exclusion applies.
- An ensuing-loss clause functions as an exception to exclusions: a later loss that follows from an excluded event may be covered if the later loss is separate and is not itself excluded.
- The mere fact that an excluded peril appears in the causal background does not automatically bar coverage for later physical damage when the policy expressly restores coverage for ensuing loss.
- Courts apply the ordinary meaning of policy terms; when the term “ensuing” is used in its ordinary sense, a loss that follows as a consequence of an excluded event can fall within the ensuing-loss provision.
- Even when an ensuing-loss clause may restore coverage, coverage remains barred for any part of the claim that is the excluded loss itself (here, insect-related remediation costs), and coverage may still be barred if another exclusion independently applies to the ensuing damage.

## Conclusion

Roberts held that although the homeowners policy excluded loss caused by insects, the honey that leaked from a beehive after extermination caused a distinct, later property loss that “ensued” from the excluded event and was covered because no other exclusion applied to the honey-leakage damage.


Roberts v. State Farm Fire and Casualty Co., 705 P.2d 1335 (1985)