Janice Gui


THE IOWA SUPREME COURT handed down a landmark decision in C & I Fertilizer, Inc. v. Allied Mutual Ins. Co.', in holding that insurance policies carry implied warranties that they are fit for their intended use. The impetus for this decision was a clause in a burglary and robbery policy which defined "burglary" as . . . the felonious abstraction of insured property . . . from within the premises by a person making felonious entry therein by actual force and violence, of which force and violence there are visible marks made by tools, explosives, electricity or chemicals upon, or physical damage to, the exterior of the premises at the place of such entry ....

The C & J Fertilizer Co. had requested insurance coverage from the defendant insurance company. During the negotiations that followed, the defendant's agent had pointed out that there had to be visible evidence of any burglary, but had not informed the plaintiff that such evidence had to be located at the exterior of the premises at the place of entry. The insurance was purchased after this negotiation between the two parties, but the policy, with its restrictive definition of burglary, was not delivered until sometime later.

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