insurance finance news Appeals Court Rejects Florida Hotel's Coverage Interpretation in Suit Against Insurer financial insurance news
Breaking-Finance.Com - A recent opinion by the Eleventh Circuit Court of Appeals involving a case against the insurer of a Florida hotel could clarify an issue of sublimits and
Breaking-Finance.Com - A recent opinion by the Eleventh Circuit Court of Appeals involving a case against the insurer of a Florida hotel could clarify an issue of sublimits and have a significant impact on how policies are written in the future, including policy endorsements. In the case, StarStone National Insurance Co. v. Polynesian Inn, LLC, et al., the court affirmed summary judgment in favor of insurer StarStone and against insured, Polynesian Inn, LLC d/b/a Days Inn of Kissimmee (Polynesian), and Andrew James Bickford. The Atlanta-based federal court held there is no coverage under StarStone’s policy for the underlying incident involving a murder and attempted murder on the property of an insured hotel. In the opinion, the Eleventh Circuit adopted StarStone’s proposed definition and interpretation of the term “sublimit” thereby providing clarity to insurers, insureds, and the public at large, on a term frequently found in insurance policies, but that Florida courts had never before defined. Case Background The underlying incident involved a murder and attempted murder of two men at a Florida Days Inn hotel, operated by Polynesian, resulting in wrongful death and negligent security claims. Specifically, in April 2017, “a woman wielding a knife attacked Bickford and Zackery Ganoe while they were guests at a hotel operated by Polynesian in Kissimmee, Florida.” Polynesian was insured under a primary policy with $1 million in limits applicable to each occurrence. However, for assault and battery offenses, the limits were $25,000 per offense, per an endorsement – the “A&B Endorsement.” StarStone insured Polynesian under an excess policy and the policy did not provide coverage for any claims that were subject to a “sublimit of liability” in the primary policy.
. Polynesian and Bickford argued the limit in the A&B Endorsement was not a sublimit, but rather, was a separate standalone limit. The Middle District of Florida granted summary judgment in favor of StarStone, which was appealed to the Eleventh Circuit.
Circuit Court Decision
The Eleventh Circuit held that the definition of “sublimit” advanced by StarStone and adopted by the district court, i.e. that a sublimit caps a carrier’s exposure, or existing coverage, at an amount less than the otherwise applicable policy limit, is consistent with the ordinary meaning of that term, as reflected in legal and non-legal dictionaries.
The Eleventh Circuit acknowledged that “Florida courts commonly adopt the plain meaning of words contained in legal and non-legal dictionaries,” (Hegel v. First Liberty Ins. Corp.) despite Polynesian and Bickford’s arguments to the contrary.The Eleventh Circuit rationalized that the $25,000 limit resulting from assault or battery would typically have been covered under the primary policy’s general $1 million per occurrence limit for “bodily injury.” The operation of the A&B Endorsement is to cap the primary carrier’s liability for that subcategory of loss to $25,000.
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