Marine Policy not Crop Insurance

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Lloyd’s Marine Policy Only Insured Against Loss of Property in Transit

After Hurricane Irma damaged its property, Pero Family Farm filed an insurance claim. Lloyd’s accepted coverage for part of the claim but denied coverage for the rest. The district court granted summary judgment to Lloyd’s.

In Certain Underwriters At Lloyd’s London v. Pero Family Farm Food Co., Ltd., No. 20-12711, USCA 11th (April 10, 2023) the Eleventh Circuit interpreted the policy.

FACTUAL BACKGROUND

Pero grows vegetables (primarily peppers and beans) that it prepares and packages for either retail sale at grocery stores or wholesale by food service companies. Once Pero harvests its vegetables, it transports them to its cooled storage facility where it cleans, sorts, stores, and packages the vegetables. transports the vegetables fto its final customers.

The Policy

In its 2015 insurance application, Pero stated that it sought to insure “[d]omestic shipments” of “[g]reen beans [and] peppers on vehicles (dump trucks) moving from field to packing house[;] seed is also stored on location.”

Subject-Matter Insured

All goods and/or merchandise of every description incidental to the business of the Assured or in connection therewith.

On September 10, 2017, Hurricane Irma struck South Florida. Pero submitted a claim to Lloyd’s for the damage it suffered as a result of the hurricane.

Summary Judgment for Lloyd’s

The district court granted summary judgment for Lloyd’s because “the unambiguous language in the [p]olicy d[id] not provide coverage for Pero’s damaged seedlings, plantings, and plastic coverings.”

DISCUSSION

The policy unambiguously covered goods or merchandise only while they were in transit or, by extension, “in store” as “stock” at a “location” during the transit process.

Because the insurance policy clearly and unambiguously did not cover the portion of Pero’s claim that Lloyd’s denied, the district court properly granted summary judgment for Lloyd’s and denied partial summary judgment for Pero.

ZALMA OPINION

Insurance policies are contracts and must be interpreted as written if unambiguous. The hurricane caused damage to some of the crop and merchandise in transit but did not insure other damages caused by the hurricane to property not in transit. The Eleventh Circuit applied the insurance contract as written.

(c) 2023 Barry Zalma & ClaimSchool, Inc.

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