The story came to me from several sources. Ken Ham and his Ark Encounter are suing their five insurance carriers for not paying for rain damage. Now for the boring part of this story – insurance.
I am a former Administrative Hearing Officer for the Colorado Division of Insurance. Yes, it was some years ago, but the basic rules remain the same.
Let’s get the facts straight. Ken Ham and the Ark Encounter are suing the insurance companies for $1 million for not paying for road damage due to a major rain event. If the damage was caused by the resulting flooding and/or a landslide, it is excluded from the insurance policy. If you don’t want to take my word for it, Patterson and Associates Insurance write on their web page:
“Coverage for flood damages is excluded in standard commercial property policies.”
In addition, an insurance policy does not insurance for poor workmanship, normal wear and tear, earthquakes, or land or mudslides. If the road was not engineered correctly, that is a case of malpractice against the engineering firm. If the road was not built to specifications, then it is the responsibility of the contractor(s).
Property insurance policies, commercial and homeowners, have not indicated exclusions for an “act of God” for many years. For example, lightning strikes are included in the coverage. However, tornados may or may not be, depending on where the property is located. Rain is usually covered if the damage was not caused by resulting groundwater. For example, rain comes through a broken window that was a result of a storm ruining your furniture or carpet. Of course, hail damage is covered by most insurance contracts.
The road may or may not have been covered under the insurance contract, depending on how good the insurance agent was. Most of the time, it is not. What would be covered is loss of business due to the damaged road IF Ham purchased loss of business coverage.
Yes, insurance is a tricky business. A necessary evil.
So, let’s get back to Ham and his Ark. The Ark was not damaged by the rain. On the contrary, it stood up pretty well. The roadway, on the other hand, was damaged due to flood and a resulting landslide. The denial of the claim was not due to the Ark Encounter’s pseudoscience and religious dogma. In fact, houses of worship are a favorite target of many insurance companies who specialize in religious organizations.
What Ham needed was a really good risk manager who oversaw the purchase of the insurance and the oversite of the insurance or bonds held by the engineering firm and contractors. This would include malpractice, workman’s compensation and liability coverages that added the Ark Encounter as an additional insured. All of that plus the surety bonds required for work completed.
Maybe Ham is worried about the financial predicament his venture finds itself. For their 2017/2018 season, the Ark Encounter sold only 860,000 tickets according to Fortune.com and Louisville’s Courier-Journal. That is down from the 2.4 million visitors Ham estimated when the Encounter opened in 2016.
Ham does need to cut his losses. His boat won’t float much longer if the organization continues to hemorrhage funds. He may have to raise the cost of visiting the Ark from the $48 to $70 he is now charging. And it is not just the Ark, but a zoo, ziplining and the Creation Museum, a 75,000 square foot sister attraction which features “a realistic Garden of Eden, animatronic Noah, Flood dioramas, stunning video displays, and much more.”
Ham’s lawsuit is frivolous at best. It should be thrown out of court and he needs to put the blame where it belongs, on his God who caused the rains to begin with.