On December 3rd, more than 100 people were participating in a party hosted at the warehouse most knew as the Ghost Ship in Oakland, California’s art district Friday night when an electrical fire broke out just before midnight. This warehouse was run by a married couple, but owned by a separate woman who has been said to have very little involvement with its use or day to day operations. Leading up to the deadly fire that has thus far claimed the lives of 36 individuals, city officials released the backlog of numerous complaints by inspectors and neighbors in recent years. The most recent report being November 14th showing a “investigation pending” for “illegal interior building structure.” Wiring complaints and lack of smoke detectors required by code were just some of the other complaints against the property. The last permitted use of the building was a warehouse.
Regardless of who is actually liable, in our society you can sue anyone for just about anything. In a case with so many deaths, the wrongful-death lawsuits will be numerous. So, the question remains; who is liable? The property owner owns the building so she has an exposure, along with the manager who was subletting units. The third party who will also most likely be a main target will be the promotor. In the case of renting event space, most venues will have contractual wording that will release themselves of liability when an entity rents the space. If the venue was smart, they would require the renting entity to purchase a special event policy that would add the venue as an additional insured in the event of a loss. Part of a general liability insurance policy includes defense coverage. This means that they will represent you in court and have a duty to defend. When general liability policies are written, we have to classify exactly what we’re insuring. In this case, it would have needed to be classified as residential since there were numerous tenants. If it was not classified correctly, say as a commercial vacant building, most policies will have exclusions in their policy for anything outside of the realm of that class code. This could mean there’s a possibility of no coverage on the policy. With the news that the property was not zoned for residential use, there’s a good chance the liability isn’t correct either.
Many people can go their whole career not using their liability coverage, but that’s becoming more and more rare. Make sure that you’re classified correctly if you have commercial insurance and make sure your limit is adequate on your personal insurance, you never know when you could need it.
If you have questions regarding your insurance, ECI is always here.
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