By Rey Panaligan
The Supreme Court (SC) has affirmed the rulings of both the trial court and the Court of Appeals (CA) that denied the P220.5 million insurance claim of Ayala Land, Inc. in the mid-day explosion in Glorietta 2 in Makati City where nine persons died and several others injured on Oct. 19, 2007.
Affirmed by the SC were the decisions handed down by the Makati regional trial court (RTC) and the CA which ruled that Standard Insurance Co., Inc. was not liable since the losses and damages caused by the explosion were not covered under the insurance policy of Ayala Land.
The SC said that both the RTC and the CA agreed that Ayala land cannot recover from its Commercial ‘All Risks’ Collective Policy (COMMAR Policy) with Standard Insurance since the loss or damage to property was caused by an excluded peril under the policy.
The resolution stated that under the insurance policy, Standard Insurance undertook to indemnify Ayala Land in any sudden and accidental physical destruction or damage of its property except if the damage or destruction was caused by an “excluded risk.”
These “excluded risks” include pollution, war, invasion, act of foreign enemy, hostilities or warlike operations, mutiny, and acts of terrorism.
The SC noted that the general rule is that the insured has the burden of proof to show that the loss or damage was caused by a covered peril, but that in case of an “all-risk policy insurance,” the insurer has the duty to establish that the loss or damage falls within the excluded risk or perils.
“Here, Standard Insurance has discharged its burden by proving that the destruction of the Glorietta 2 was caused by an excluded peril,” it said.
At the same time, the SC said that Ayala Land had declared, based on its investigation, that the explosion was caused by an explosive device, which constitute as an act of terrorism.
It noted that Ayala Land even released an official press statement stating its disappointment as to the finding of Multi-Agency Task Force that the cause of the explosion was the build-up of methane gas and diesel vapor at the basement and not due to an explosive device.
“To suddenly claim that the explosion was not caused by an explosive device simply because Malayan Insurance denied its claim under its Terrorism policy with the latter is merely an afterthought that cannot be considered by this Court,” the SC stressed.
It added that “even if the Court were to rule that the explosion was caused by the build-up of methane gas and diesel vapor at the basement as alleged by Ayala Land, the same does not help Ayala Land’s cause” because “pollution of whatever cause is also an excluded peril” under its policy with Standard Insurance.
It cited the provision of Republic Act No. 8749, the Philippine Clean Air Act of 1999, which defines “air pollution” as “any alteration of the physical, chemical and biological properties of the atmospheric air, or any discharge thereto of any liquid, gaseous or solid substances that will or is likely to create or to render the air resources of the country harmful, detrimental, or injurious to public safety….”
“Wherefore…, the petition (filed by Ayala Land) is denied. The decision dated April 13, 2018 and resolution dated Aug. 7, 2018 of the Court of Appeals… are hereby affirmed,” the SC ruled.