The Supreme Court grants insurance compensation for "sudden" and "unforeseen" damage when the roof collapsed

The most important conclusions of the precedent are 1) that the assessment of whether the damage was unforeseen should be made from what was possible to foresee for the policyholder's representatives and management, 2) that the assessment should be objectified based on what is typically (or differently expressed in some reasonable sense) possible to foresee, and 3) that inspections and what was possible to discover with the naked eye are of importance in the assessment of whether the damage was possible to foresee.

The background was that the roof of a furniture store had collapsed, resulting in the store part and the property in the building being completely destroyed. The furniture company that owned the property on which the building was located was covered by a combined business insurance.

The furniture company brought an action against the insurance company and claimed that the district court should establish that the furniture company was entitled to insurance compensation according to the all-risk element in the insurance. The furniture company argued that the collapse had been caused by a deficient building construction and that the damage as a result of the collapse - which was sudden and unforeseen - is covered by the all-risk element. The insurance company contested the action. The district court concluded that the collapse is not covered by the all-risk element as it, in the opinion of the district court, did not constitute a sudden and unforeseen damage.

However, the Court of Appeal came to a different conclusion and believed that the damage had been sudden and unforeseen. The Supreme Court noted that insurance terms usually contain limitations aimed at excluding from the insurance damages or events that are foreseeable and that this often happens in all-risk terms by stating that for compensation it is required that it is a sudden and unforeseen physical damage. That the damage must be "sudden" means according to the Supreme Court that the process is instantaneous; it should not be possible to prevent its development or extent. Furthermore, the Supreme Court noted that with "unforeseen" it means that the damaging event must not be something that there is reason to count on and that the requirement that it must be an "unforeseen" damage aims to exclude damages that are due to, among other things, wear and tear as a result of normal use.

The Supreme Court referred to the legal case "Scana Steels Maskinförsäkring" NJA 2007 p. 17 and that the Supreme Court in that decision expressed that the concept of "unforeseen damage" could not be given the literal meaning that no one should have actually foreseen the damage. Instead, the condition must be understood so that the damage in some reasonable sense has not been possible to foresee and in the assessment of foreseeability, circumstances that have become known during the insurance period should also be taken into account. The Supreme Court noted that it is a question of an objectified assessment based on what is typically possible to foresee. 

The Supreme Court concluded that the main cause of the damage was a deficient building construction. Furthermore, the Supreme Court believed that there was no doubt that the damage had been immediate and thus sudden. As for whether the damage had been possible to foresee, the mere fact that the furniture company owned the building in question did not mean that the damage was reasonably possible to foresee. The deficient building construction was not possible to discover with the naked eye according to the Supreme Court and at a general inspection of the building carried out in 2016, no circumstance had emerged that indicated that the building construction was deficient. The Supreme Court concluded that the damage in some reasonable sense had not been possible to foresee for the furniture company's representatives and management. The damage had thus been unforeseen in the sense of the insurance terms and the Supreme Court therefore confirmed the judgment of the Court of Appeal.