A September 2025 decision in a Massachusetts Appeal Court found that an “occurrence” connotes a relatively concrete, timebound quality. The insured company supplied defective oil to customers over a long period of time which led to damage to the customers’ heating equipment and a class action.
There was no cover unless the insured knew that the property damage had occurred. The court said on the usual and ordinary sense of the word “occurrence”, the provision of heating oil causing damage to each customer constituted a separate occurrence. The occurrence was not to the provision of defective oil to multiple customers across multiple years resulting from a decision to not add biodiesel to its oil in excessive proportions. The court attributed the same kind of meaning to words like “event”, “incident”, or “happening”.
The policy covered “property damage” caused by an “occurrence”. Because the alleged damage to different customers reflected distinct “occurrences of property damage”, each customer experienced distinct property damage. The insured’s knowledge of damage to one class of customers was therefore not knowledge of a different class of different customers’ alleged property damage. This was true regardless of whether the different occurrences were caused, in a general sense, by the same decision to sell biodiesel-enriched oil.
The court held that the insurer had to defend the class action of customers who received heating oil from March 2019 when the insurer’s policy came into force.
The decision is a lean-over-backwards decision in favour of the insured, and the reasoning is not likely to be followed in South Africa. There are many cases about what an “occurrence” in the context of property insurance is. The mistake in this policy wording was to link the knowledge of the insured to the property damage.