The Duty to Defend an Insured

After a Florida insurance company argued several policy exclusions in order to avoid a duty to defend an insured, the United States District Court of the Southern District of Florida denied the insurance company’s arguments and held that they had a duty to defend the insured.

The basis for this case arose from an aerial spraying of herbicide onto Florida Crystals Corporation’s (the insured), property and getting onto a neighbor’s, (Date Palm) property. The herbicide damaged the date palm trees on the property and Date Palm sued Florida Crystals and the herbicide company. Florida Crystal sought help for the defense in the case under their insurance policy, however, National Union Fire Insurance Company, denied coverage.

United States District Court of the Southern District of Florida

United States District Court of the Southern District of Florida

National Union filed a lawsuit seeking a declaration from the court stating that the insurance policy imposed no duty to defend Florida Crystals in the action against Date Palm. In their suit, they argued that the policy only covered “occurrences” defined as “accidents” and that Florida Crystal’s action only involved allegations of intentional conduct which are not accidents. The court rejected this argument because even though the conduct itself may be intentional, the resulting harm or damage done was unintentional, therefore, making it an “occurrence” as stated in the policy.

National Union also argued that multiple exclusions in the policy prohibited coverage. One of the exclusions barred coverage for “injury or damage to either property or crops being treated… by aerial application of chemicals”. The court held that this did not fully apply to the case and is therefore denied because the complaint also sought compensation for lost profits and not just damages for injury to the crops and property from the aerial application of chemicals. This conclusion was based on a Florida law that says “where the complaint in an underlying action contains claims both within and without the scope of coverage, an insurer’s duty to defend is triggered with respect to the entire action.”

Ultimately, the court denied National Union’s summary judgment on the basis that they failed to establish that it was relieved from a duty to defend. This case properly illustrates that allegations of unintentional harm may constitute an “accident” that could give rise to an “occurrence” under liability policies, triggering an insurer’s duty to defend even where the underlying complaint involves some intentional conduct. Insurance companies frequently try to avoid coverage for intentional acts that caused unintentional results. In many instances, insurance companies get away with this because subsequent agreements are not acknowledged and/or language in the insurance policy is misinterpreted. The attorneys at The Mineo Salcedo Law Firm are well aware of these issues and are equipped and prepared to fight for your claim. Properly reviewing the entire insurance policy when evaluating potential coverage is crucial and The Mineo Salcedo Law Firm is here to help you do that.

If you have any questions, call for a free consultation, (954) 463-8100.