Nordstrom, like other retailers, sustained property damage and business interruption expenses as a result of protests arising out of the Black Lives Matter movement. Although the retailer supports BLM, its insurers do not support Nordstrom. In a complaint filed in district court in the Western District of Washington (access here), Nordstrom alleges that its insurers contend that Nordstrom’s losses arise from discrete events that constitute multiple occurrences, thus subjecting the retailer to multiple deductibles. As Nordstrom’s complaint explains, “The insurers’ position is that Nordstrom’s civil unrest loss does not constitute “a [l]oss or series of losses or several losses, which are attributable directly or indirectly to one cause . . . or to one series of similar causes arising from a single event . . . irrespective of the period of time or area over which such losses occur,” in the language of most of the policies, or “any one loss . . . or series of losses arising out of one event,” as provided in two of the policies.”

This insurer defense is not unusual, but is misguided. Nordstrom’s insurance policies, and many other similar policies, treat related events as a single occurrence. Here Nordstrom’s policies define an occurrence to include a “series of losses or several losses,” provided that they are attributable to either one cause or a “series of similar causes.” Insurers prefer this broad definition of occurrence to minimize the available limits on policies with per-occurrence limits. But insurers favor a narrow reading of the same definition in policies with relatively high deductibles. Nordstrom’s policies provide $25 million in coverage above a $1 million per occurrence deductible. Nordstrom’s insurers may attempt to minimize their liability by treating each store, or each event in each city, as a separate occurrence. This interpretation disregards the causation language embedded in the occurrence definition in Nordstrom’s policies.