- Florida Supreme Court Issues Major Insurance Coverage Ruling Against Manufacturers
- October 26, 2005 | Author: Collin J. Hite
- Law Firm: McGuireWoods LLP - Richmond Office
The ongoing litigation against gun manufacturers around the country has produced a recent opinion on insurance coverage applicable to all types of manufacturers. The Florida Supreme Court addressed CGL coverage for a case brought by municipalities against gun manufacturers, and whether the insurers owed coverage for damages or did the products-completed operations hazard exclusion apply.
In Taurus Holding, Inc. v. United States Fidelity and Guaranty Co., the Court held that the exclusion for products-completed operations hazard applied, and thereby excluded coverage. Taurus had sought coverage under its CGL policy. The U.S. District Court in South Florida found there was no coverage based on the policy exclusion. On appeal the Eleventh Circuit certified the following question to the Florida Supreme Court:
DOES A "PRODUCTS-COMPLETED OPERATIONS HAZARD" EXCLUSION IN A COMMERCIAL GENERAL LIABILITY POLICY OF INSURANCE BAR COVERAGE AND THEREFORE ELIMINATE AN INSURER'S DUTY TO DEFEND THE INSURED GUN MANUFACTURERS IN SUITS ALLEGING NEGLIGENT, NEGLIGENT SUPERVISION, NEGLIGENT MARKETING, NEGLIGENT DISTRIBUTION, NEGLIGENT ADVERTISING, NEGLIGENT ENTRUSTMENT, PUBLIC AND PRIVATE NUISANCE, FAILURE TO WARN, FALSE ADVERTISING, AND UNFAIR AND DECEPTIVE TRADE PRACTICES BASED ON INSURED'S ON-PREMISES BUSINESS PRACTICES.
Talk about no coverage. Well, Taurus argued that the language in the exclusion only applied to defective products. The Florida Supreme Court noted that there was a split of authority over the issue, and then shot down Taurus' argument by holding that the exclusion applies more broadly. The Court also noted that applying the exclusion more broadly did not create a gap in coverage since insurers offer optional products-completed operations hazard coverage.
Many manufacturers, builders, and others believe a standard CGL policy provides insurance coverage related to products-completed operations. Unfortunately all too many learn the lesson the hard way in an insurance coverage dispute. It is critical for policyholders to read their policy carefully and consult experts, such as brokers and coverage counsel, to verify what their insurance policies cover at the time the policy is issued.
Taurus Holdings, Inc. v. United States Fidelity and Guaranty Co., 2005 WL 2296481 (Sept. 22, 2005).