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A Zurich Insurance Group Ltd. unit must provide coverage to a Florida country club for only two locations under a under an outdoor grounds policy endorsement, in a coverage dispute over damage caused by 2017’s Hurricane Irma, says a federal court.
Grey Oaks Country Club in Naples, Florida, is located on 1,233 acres of land that contains, among other things, two clubhouses and three championship golf courses, according to Monday’s ruling by the U.S. District Court in Fort Myers, Florida, in Grey Oaks Country Club Inc. v. Zurich American Insurance Co.
Grey Oaks had purchased a commercial insurance policy from Zurich with a policy period from Oct. 1, 2016 through Oct. 1, 2017, as well as a “golf course outdoor grounds coverage” endorsement in light of the substantial landscaping around its golf grounds, which contains an eight-figure value in trees alone, according to the ruling.
The country club said it suffered substantial damage to its landscaping, main clubhouse, its Estuary clubhouse and the Estuary golf course from Hurricane Irma.
The issue in the litigation is the number of premises covered under the Zurich policy’s $500,000-per-premises limit of liability under its grounds coverage. Zurich had argued it was only liable to pay for a single premises, or $500,000 in coverage, while Grey Oaks had sought coverage for 19 separate locations.
Zurich and Grey Oaks filed cross motions for partial judgment on the issue with the court, with Grey Oaks charging the insurer with breach of contract.
The District Court’s ruling said, “The Golf Course Outdoor Grounds Coverage endorsement does not define ‘premises’ nor does the section amend the definition of ‘premises’ found in the Commercial Definitions Section; therefore, the Court turns to the applicable terms of the Commercial Property Definitions.”
Because “the locations on Declarations for this Commercial Property Coverage Part is described by address only … the Court finds that ‘premises’ unambiguously means the area within 1,000 feet of both 22400 Grey Oaks Dr. N.,” which is the club’s main address, “and 1600 Estuary Dr.”
“Even so, Grey Oaks would have the Court designate each of the 19 locations on the Schedule of Locations as a separate premises for purposes of the Golf Course Outdoor Grounds endorsement,” said the ruling.
“However, the definition of ‘premises’ unambiguously states that ‘premises’ means a location scheduled on the Declarations for Commercial Property Coverage Part and does not otherwise refer to the Schedule of Locations,” said the ruling.
“In sum, the court finds there are two ‘premises’ for purposes of the Golf Course Outdoor Grounds Coverage,” said the ruling in granting Zurich’s motion for partial judgment as to which locations are covered under the policy’s $500,000 per premises limit of liability.
Attorneys in the case had no comment.
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