An insured paving and excavating contractor carried a commercial package policy with a commercial property coverage form on building and business personal property on a blanket, replacement cost basis. In addition, business income coverage was purchased on one of the buildings but not the other. A fire destroyed the buildings which had been scheduled for building and business personal property but not for business income.

The insured filed a claim for $50,000 of business income on the second building. The insurer denied coverage, and the insured began a legal compliant citing the policy language that says: " . . . will pay for the actual loss of Business Income you sustain due to the necessary suspension of your "operations" during the "period of restoration." The suspension must be caused by direct physical loss of or damage to property at the premises described in the Declarations . . . " (emphasis added.)

The insurer was able to support the fact that business income coverage had never been requested on the damaged building and that the insured was attempting to broaden the definition of premises in the coverage form, beyond what was intended.

The district court of Maryland denied the motion for business income coverage stating that the insured had used an "irrational interpretation." Webster's Dictionary defines irrational as "not reasonable, absurd, not logical."

The decision discussed in this case was on one of two points brought in the same action. The other point involved coverage for equipment scheduled under inland marine and whether or not it could also be covered under building and business personal property. It is discussed in the case titled: Valuation And Limits In Scheduled Inland Marine Policy Held To Have Precedent Over Commercial Property Policy

(Monumental Paving & Excavating, Inc., Plaintiff v. Pennsylvania Manufacturers' Association Insurance Company, Defendant. DMd. No. AMD 96-1722, November 27, 1996. CCH 1997 Fire and Casualty Cases, Paragraph 6146.)