Real Property Transactions: Are Misrepresentations Insurable

In Everson v. Lorenz, the Wisconsin Supreme Court restated that insurance policies are not "one-size-fits-all" documents, providing coverage for every type of damage. Everson makes clear that misrepresentations in the sale of real property are not accidents, and thus are not occurrences, so that misrepresentations fall outside the scope of coverage provided by occurrence based insurance policies.

by Monte E. Weiss

The Wisconsin Supreme Court recently answered a question that has been lingering since 1999 - are misrepresentations associated with the sale of real property within the scope of coverage provided by occurrence based insurance policies? In Smith v. Katz, the supreme court, while concluding that no insurance coverage was available for the particular loss at issue in Katz, left the window open for the possibility that insurance coverage was available for misrepresentations in occurrence based insurance policies. Recently, in Everson v. Lorenz, the court, in a 5-2 decision, closed that window.

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