Postdiluvian Perils: Second Circuit Weighs Coverage For Losses Suffered After The Waters Recede

"[N]ow I only hear/ Its melancholy, long, withdrawing roar,/ Retreating, to the breath/ Of the night-wind, down the vast edges drear/ And naked shingles of the world." — Matthew Arnold

As this blog has reported, exclusions and limits for flood coverage have generally held up against the tide of claims arising from Superstorm Sandy.  Now that the water is gone, however, new losses have been discovered, and new challenges arise.  Last month, in National Railroad Passenger Corp. v. Aspen Specialty Ins. Co., No. 15-2358-cv (2d Cir. Aug. 31, 2016), the U.S. Court of Appeals for the Second Circuit examined two possible holes in the dyke.  The court ruled that corrosion which allegedly began only after the flood had ended was subject to a flood sublimit, notwithstanding the "Ensuing Loss" clause in the plaintiff's policies.  But the court also left open the possibility that a Demolition and Increased Cost of Construction ("DICC") clause might still provide coverage