Insurer not liable for hole-in-one prize

A hole-in-one from 137 yards is not covered when the insurance policy says it must be from at least 170 yards, says a federal appeals court, in denying a nonprofit coverage for two prizes it was obligated to pay in a golf charity event.

White Sulphur Springs, West Virginia-based Old White Charities Inc., a nonprofit that provides instruction for sporting and other recreational facilities, held a hole-in-one contest during the 2015 Greenbrier Classic and Pro-Am golf tournament in White Sulphur Springs in 2015, according to Wednesday’s ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, in All Risks Ltd. et al. v. Old White Charities Inc.; Bankers insurance L.L.C.

Old White purchased coverage to insure the potential cost of the contest. The insurance application policy stated there must be a minimum yardage of 170 yards for the hole in question. Two golfers hit a hole-in-one on the designated hole from 137 yards, and Old White paid about $200,000 as a result, according to the ruling. 

The several underwriters on the coverage sought a declaratory judgment that the insurance policy provided no coverage because Old White had failed to comply with the minimum yardage requirement.

The U.S. District Court in Charleston, West Virginia, granted the underwriters summary judgment dismissing the case as well as Old White’s bad faith, breach of contract, negligence and fraud claims against them.

The court’s ruling was affirmed by a unanimous three-judge appeals court panel. “Old White failed to show a genuine issue of material fact as to whether it was entitled to coverage under the terms of the policies,” said the ruling.

The final policies and policy binder received by Old White’s agent, Richmond, Virginia-based Bankers Insurance L.L.C., “unambiguously state that the designated hole had to be at least 170 yards from the tee, and Bankers bound coverage by submitting payment on behalf of Old White days after receiving the binder,” said the ruling. 

“Old White also failed to show that it had a reasonable expectation of coverage,” said the ruling, in upholding the District Court’s judgment.