The U.S. Fifth Circuit Court of Appeals applied the Texas Anti-Technicality Statute to hold that an insurer owed payment for loss to an insured despite a breach of a condition of the policy.W.W. Rowland Trucking Co., Inc. v. Max America Ins. Co., No. 2014 WL 685217 (5th Cir. Feb. 24, 2014)(per curiam). 

The insured trucking company claimed a loss for the theft of its truck from its distribution center. At the time of the theft, the truck contained goods for a third party. The insurer agreed that theft was a covered loss under a portion of its policy entitled “Legal Liability Coverage.” However, the policy required that the terminal be “100% fenced, gated, locked and lighted 24 hours per day, 7 days per week,” or coverage would be “null and void.” The insurer determined that there were gaps in the perimeter fence along the southern and western borders in violation of the policy’s requirement and denied coverage even though it also determined that thieves had cut a hole in the eastern perimeter fence to gain access to the truck.   

The insurer argued that the Anti-Technicality Statute did not apply because it does not apply to liability insurance, only to property insurance. The Fifth Circuit held that the statute applied because as a bailee of the truck’s cargo, the trucking company had an insured interest in it, and the portion of the insured’s policy covering the stolen cargo arose from its property insurance. The Fifth Circuit affirmed the district court’s findings that the loss was covered because the breach of the policy’s fencing provision did not cause the theft loss.