... DO NOT KNOW.
*This is a selection from the book titled "Catastrophe Claims: Insurance Coverage for Natural and Man-Made Disasters," Section 7:1 by Dennis J. Wall (©May 2017, Thomson Reuters). This selection is reprinted with permission of Thomson Reuters. Any further reproduction without the consent of the publisher is expressly prohibited. Links to footnotes will take you not to the footnotes, which are all reproduced below, but instead to your Thomson Reuters West "sign in" page, if you have a Thomson Reuters West account. In the meantime, as noted, the footnotes are all reprinted with permission below.
Regardless of the reason, the interpretation of all-risks coverage suffers from what might be called “generalist” judges' and lawyers' greater familiarity with liability insurance coverage questions, as distinct from insurance coverage “specialists” who in general terms tend to deal with all kinds of insurance questions including all-risks property insurance coverage issues.
Judges and lawyers more familiar with other legal issues and more experienced, perhaps, in dealing with other kinds of insurance issues tend to think that all insurance coverage cases are the same. They are not. All-risk coverage demands its own order of construction, and its own rules of application. That is after all why all-risk coverage is written in the first place, namely, to go straight to the exclusions and their exceptions.
An example of successful all-risk coverage analysis is given by the Florida Supreme Court in an opinion released on December 1, 2016: Sebo v. American Home Assurance Co.5 Sebo involved the issue of coverage under an all-risks property insurance policy for damage resulting from many causes, including damage caused by Hurricane Wilma.
The Supreme Court of Florida approached the all-risks coverage question with an outline. The Court's all-risks coverage outline breaks out into five numbered points. Although the Court did not address them as a list, the points they addressed fit easily into five understandable issues, or rules of interpretation, as follows:
- “All-risk” is afforded a broad, comprehensive meaning.
- However, an “all-risk” policy is not an “all loss” policy.
- An all-risk policy, like every other insurance policy, is construed in accordance with the plain language of the policy.
- However, if the language of any insurance policy (including an all-risks policy) is susceptible to more than one reasonable interpretation then it is ambiguous, and when an insurance policy is ambiguous it will be strictly construed against the insurance company and in favor of the insured.
- Ambiguous exclusionaryclauses in any insurance policy, including in an all-risk insurance policy, are construed even more strictly than coverage clauses.
After following this outline, the Court concluded that the analysis of an all-risks property insurance policy depends on the language used in the exclusions and their exceptions:
In short, in all-risk policies such as the one held by Sebo, construction is governed by the language of the exclusionary provisions.6
Next: The Conclusion of What to Know About "All Risks." Please Read The Disclaimer. This Blog ©2017 by Dennis J. Wall. All Rights Reserved.
Footnotes
Sebo v. American Home Assur. Co., No. SC14-897, 2016 WL 7013859 (Fla. December 1, 2016) (stated NOT RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL). As of Friday, January 6, 2017 when these words are written, the Supreme Court's opinion has not been released for publication in the permanent law reports. A motion for rehearing is pending in the Sebo case at this time.
Sebo v. American Home Assur. Co., No. SC14-897, 2016 WL 7013859, at *2 (Fla. December 1, 2016).
This is nowhere near the same thing as saying that in interpreting a liability insurance policy a court should examine the policy as a whole, or consult exceptions and exclusions for “insight into whether coverage exists under an insuring agreement by shedding light on what the terms it contains mean.” National Sur. Corp. v. Westlake Inv's, LLC, 880 N.W.2d 724, 739 (Iowa 2016). In interpreting an all-risks insurance policy, there is never a question what the terms contained in an insuring agreement might mean. The only insuring agreement to be found in a standard all-risks insurance policy is more or less along these lines: This policy affords coverage for all risks unless excluded.
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