Property insurance policies often contain both vandalism coverage and theft exclusions. When criminals break into a building and destroy large portions of it while stealing copper wiring, plumbing, or mechanical components, those provisions often collide. The result is a recurring legal battle over whether the loss is covered vandalism or excluded theft. Indeed, I laughed when reading the opinion from a recent federal Colorado case where the judge wrote:
It is absolutely the case that courts considering the interpretation of insurance contract clauses such as the one at issue here have not reached consistent conclusions. The caselaw is, to put it bluntly, all over the map, and courts have reached divergent conclusions as to the plain and ordinary meaning of the terms and the ambiguity vel non of their use in context without acknowledging or addressing potentially conflicting authority. 1
In BWB Investment Company, LLC v. Scottsdale Insurance Company, criminals broke into a Denver warehouse and stripped it of copper wiring. The thieves did not simply remove a few wires. They tore open electrical panels, ripped through ceilings and drywall, dismantled HVAC systems, and destroyed plumbing and electrical infrastructure to get to the copper. By the time they finished, the building was effectively inoperable.
The policy contained language similar to that found in many commercial property policies. It provided coverage for vandalism, defined as willful and malicious damage to property. At the same time, it excluded loss or damage caused by or resulting from theft, except for building damage caused by burglars entering or exiting the building. The insured argued that the destruction of the building was vandalism and covered. Scottsdale argued that the entire event was driven by theft and that the building damage occurred only to facilitate the removal of copper, making the loss excluded.
The policyholder’s position was that the destruction of walls, systems, and fixtures was classic vandalism. The insured argued that the building damage and the stolen copper should be treated differently. In other words, the value of the copper itself might fall within the theft exclusion, but the widespread destruction of the building should still be covered under the vandalism provision. The policyholder also raised the argument that “theft” traditionally refers to the taking of personal property and that building fixtures embedded within the structure should not be treated as stolen property within the meaning of the exclusion. In addition, the insured argued that the policy language, “caused by or resulting from theft”, was ambiguous because it lacked the type of anti-concurrent causation language insurers frequently use when they intend to exclude damage connected to multiple causes.
Scottsdale argued that the thieves had a single objective: to steal copper. The destruction of the building was simply the method used to accomplish that theft. Under this view, the damage was not vandalism because it was not done for the purpose of destroying property. Instead, the destruction was incidental to the theft. Scottsdale also relied heavily on the structure of the policy itself, pointing out that the policy specifically restored coverage only for damage caused by burglars entering or exiting the building. According to the insurer, if all building damage during a theft were covered as vandalism, the entry-and-exit exception would serve no purpose.
The court agreed with the insurer and granted summary judgment in favor of Scottsdale. The judge concluded that the policy must be read as a whole and that the interplay between the vandalism coverage, the theft exclusion, and the entry-and-exit exception demonstrated the parties’ intent. The court reasoned that vandalism requires destruction undertaken for its own sake, while destruction carried out to accomplish a theft falls within the theft exclusion. In this case, the evidence showed that the criminals systematically dismantled building systems solely to extract copper. Because the destruction was done to facilitate the theft, the court found that the damage fell within the theft exclusion.
The inconsistent case results stem from several factors. Policy language differences often drive outcomes, particularly when policies contain slightly different theft exclusions or include additional language addressing burglary or attempted theft. Factual nuances also matter greatly. Courts frequently examine whether the destruction was excessive or unnecessary for the theft and whether the perpetrators appeared motivated by vandalism rather than theft. Competing doctrines of policy interpretation further complicate matters, especially when courts apply different approaches to ambiguity, causation, and the structure of exclusions. Finally, there is a persistent tension between strict enforcement of policy exclusions and the reasonable expectations of insureds who believe vandalism coverage should protect them when criminals destroy their buildings.
Getting into the minds of thieves is difficult. I often see signs of vengeance vandalism, which has nothing to do with theft but merely the intentional destruction of property. This is one reason why the issue continues to generate litigation, and why claims professionals should approach these cases thoughtfully rather than assuming the answer is obvious.
The first practical lesson is that the purpose of the damage often becomes the central question. Courts frequently analyze whether property was destroyed for destruction’s sake or whether the destruction was merely the means of stealing property. Determining that purpose requires careful factual development.
Another important lesson is that the entry-and-exit exception frequently plays a larger role in judicial reasoning than many claims handlers expect. Courts often rely on that clause to interpret the scope of the theft exclusion, particularly when evaluating whether other building damage should be covered.
Property claims adjusters should also recognize that copper theft losses almost always produce enormous structural damage compared to the value of the metal stolen. Because of this imbalance, coverage disputes are common, and the policy wording becomes critical. Therefore, small wording differences in policies can produce dramatically different results.
The larger lesson from today’s blog is that courts continue to wrestle with how theft exclusions and vandalism coverage should operate together. We have written extensively about the issue. For those interested, I would suggest my article from a decade ago, What Is and Is Not Vandalism and Theft Loss in a Property Insurance Policy, where I started the article asking, “Ever wonder what is in thieves and criminals’ minds when they are rummaging through stuff to either steal or destroy property?” Christina Phillips wrote an article titled Building Damage Caused by Copper Theft Is Not Excluded, in which the policyholder recovered.
Thought For The Day
“A burglar who respects his art always takes his time before taking anything else.”
— O. Henry
1 BWB Investment Co. v. Scottsdale Ins. Co., No. 1:25-cv-01009, *6 (D. Colo. Mar. 10, 2026). See also, BWB Investment Motion for Summary Judgment, and Scottsdale Motion for Summary Judgment.