A recent Illinois Appellate Court Opinion, Evergreen Real Estate Services, LLC v. Hanover Ins. Co., et al., 2019 IL App (1st) 181867, held that the insurance policy at issue in that case provides coverage for claims made under the Chicago Residential Landlord and Tenant Ordinance (“CRLTO”).
The plaintiff in that case, Evergreen Real Estate Services, LLC, was a property management company that managed at least one property in Chicago. When Evergeen was sued by tenants for alleged violations of the CRLTO, it made a claim to its insurer, Hanover Insurance Company.
Hanover had initially denied the claim on the alleged grounds that claims for violation of the CRLTO constitute claims for “unfair or deceptive business practices,” including “violations of any local, state or federal consumer protection laws,” which were explicitly excluded in the policy at issue. Evergreen disagreed and sued Hanover for coverage.
In ruling in Evergreen’s favor, the First District Appellate Court held that claims brought under the CRLTO are not necessarily claims of “unfair or deceptive business practices” and that such claims are not necessarily “violations of any local, state or federal consumer protection laws.” One could, as the Court pointed out, be in technical violation of the CRLTO without having violated any consumer protection laws.
Accordingly, the provision of the insurance policy excluding these consumer protection claims did not apply and Evergreen was entitled to coverage under the terms of the policy.
Chicago is a liability minefield for landlords thanks in no small part to the CRLTO. It has long been the general understanding that claims for CRLTO violations are not covered under standard insurance policies.
The Appellate Court ruling in Evergreen v. Hanover provides a glimmer of hope that some common-sense change may be coming to Chicago. Perhaps with insurance companies potentially on the hook to provide coverage for CRLTO claims, these companies may begin using their resources to push for much needed attention to this ordinance and its current effects of inequity.
If you are a landlord in Chicago, it is important that you are aware of your rights and obligations under the CRLTO. It is equally important that you have sufficient insurance coverage in the event of stuff happens. Feel free to contact us with any question about this Appellate Court ruling and, more importantly, be sure to contact your insurance agent to see if you are covered for CRLTO claims!