Court Upholds Denial of Fire Claim Over Sprinkler Lapse
South Carolina's appellate court affirmed a ruling denying coverage for a restaurant building destroyed by fire because its sprinkler system was never operational.
Updated on Nov. 10, 2026 in Insurance
Live Poll
Do you trust insurance companies to honor their policy terms when you file a claim?
The South Carolina Court of Appeals affirmed a judgment denying insurance coverage for a fire-destroyed restaurant building at 1901 North Kings Highway. The policy conditioned fire coverage on a working sprinkler system, which had not been connected to the municipal water supply, despite an application identifying the property as "100% sprinklered."
Why it matters
The ruling underscores that policy conditions such as protective safeguards endorsements can bar coverage even when an applicant believes the protection is in place. It also highlights the risk property owners face when relying on application representations about safety features.
The Protective Safeguards Endorsement requires designated sprinkler systems to be maintained in complete working order, and the Schedule of Values listed five properties, including the destroyed building, as "100% sprinklered." The court's ruling leaves open how the jury's 60/40 negligence split will ultimately affect the parties' financial exposure.
The players
Crescent Coast Insurance
An insurance agency found by a jury to be 40% negligent and ordered to pay a $15,000 fiduciary-duty award in this coverage dispute.
The details
Tebele signed an application roughly six weeks before the fire identifying the property as "100% sprinklered," but the system had never been operational. The insurers denied the claim under the endorsement, and a jury later found both the insured and the agency negligent before the appellate court affirmed the judgment.
Timeline
Roughly six weeks before the fire: Tebele signs the application describing the property as 100% sprinklered.
Roughly six weeks after the application: The restaurant building at 1901 North Kings Highway is destroyed by fire.
Roadmap
Commercial property insurers routinely rely on protective safeguards endorsements to condition fire coverage on the maintenance of sprinkler and alarm systems. This South Carolina ruling applies that condition strictly, placing the risk of an inaccurate application on the property owner and the agent who submitted it.
Property owners should verify that any sprinkler or alarm systems listed in an insurance application are actually connected and functioning before signing. Reviewing protective safeguards endorsements in a policy can prevent a denied claim after a loss.
The takeaway
Accurate application disclosures and working safety systems matter as much as the policy itself. Confirm that every protective feature described to an insurer is operational before a loss occurs.
Further reading
For more on how coverage conditions like these work, explore Insurance coverage guides on the site.
Source note: This article includes information reported by South Carolina Lawyers Weekly.
Live Poll
Do you trust insurance companies to honor their policy terms when you file a claim?
