What an ensuing loss clause does
Many exclusions carry an exception known as the ensuing loss provision. If an excluded cause leads to a distinct, separate peril that is itself covered, the resulting damage is paid even though the original cause is not. The excluded cause stays excluded, but the downstream covered damage is restored to coverage. This keeps a single excluded event from wiping out an otherwise legitimate claim.
A Florida example
Faulty workmanship is usually excluded. Suppose a plumber installs a fitting incorrectly, and months later that fitting fails and floods the home. The cost to redo the defective plumbing is excluded as faulty work, but the ensuing water damage to floors, cabinets, and drywall can be covered. Keep in mind that a water damage sublimit may still cap the payout for the resulting water loss.
Why carriers fight it
Insurers often try to pull the entire loss back into the original exclusion, treating the covered ensuing damage as part of the excluded cause. The ensuing loss exception is a central tool for recovering the separate covered damage, and it turns on carefully separating the excluded cause from the covered result.