Insect and vermin damage
It is fairly easy to define insect damage in that it is damage caused by any small air breathing anthropod of the class insecta. It is less easy to distinguish damage caused by vermin in that the definition requires some degree of subjectivity, namely small animals, especially rodents, that are troublesome to man. For example, in the case of Sincoff v. Liberty Mutual Fire Insurance Co., 11 NY 2d 386 (1962), the court construed carpet beetles not to be vermin within the exclusion. Perhaps a little more understandably the court held that in the case of Unimof v. Nationwide Mutual Fire Insurance, 442 NY 2d 892 (1981), damage caused by raccoons was not excluded by the vermin exclusion. Again, the vermin and insect exclusion must be the proximate cause of the loss. For example, in Harvey v. Switzerland General Insurance Co., 260 SW 2d 342 (1953), the assured claimed for damage to his carpet: stains and discolouration resulting from a solution being used by a third party to prevent and protect the carpets from moths. The all risks policy contained an exclusion against moth and vermin damage and the insurer argued that the moth and vermin damage was in fact the proximate cause. This argument was rejected by the court which stated that there was no evidence that the damage by moths caused the employment of the third person to apply the solution which damaged the carpet. His employment resulted from a fear of moth infestation rather than damage caused by it.
Other processes, such as wet or dry rot (decay as a result of bacterial or fungal action), are all natural processes which occur either as a result of time or without the assistance of external events. It is arguable in the light of the US authorities referred to above, that even if these processes are accelerated by external events, the loss may still fall within the exclusion. It will depend very much upon the facts of each particular case and the wording of the policy.