Legal Memorandum: Interpretation of Insurance Policy

Issue: When are insured premises covered by a ‘roof,’ for purposes of a Florida insurance policy?

Under federal law, and Florida law, when an ambiguity exists in an insurance policy, the court must construe the provisions in the light most favorable to the insured and against the drafter, or insurer.  Continental Cas. Co. v. Wendt, 205 F.3d 1258, 1261 (11^th Cir. 2000); Florida Power & Light Co. v. Penn Am. Ins. Co., 654 So. 2d 276, 277-78 (Fla. 4th Dist. Ct. App. 1995).  By definition, an insurance contract is “ambiguous if it is susceptible to two or more reasonable interpretations that can fairly be made.”  Continental, 205 F.3d at 1261 (citing Dahl-Eimers v. Mutual of Omaha Life Ins. Co., 986 F.2d 1379 (11th Cir. 1993)).

Where an ambiguity exists, the term must be construed by its plain, unambiguous, and common meaning in the interests of the insured and in favor of coverage.  Federated Mut. Ins. Co. v. Germany, 720 So. 2d 1245, 1247 (Fla. 5th Dist. Ct. App. 1998).  In addition, ambiguous insurance policy exclusions are construed against the drafter and in favor of the insured. See Deni Assocs. of Florida, Inc. v. State Farm Fire & Cas. Ins. Co., 711 So. 2d 1135, 1138 (Fla. 1998). 

In Victory Peach Group, Inc. v. Greater New York Mut. Ins. Co., 310 N.J. Super. 82, 84, 707 A.2d 1383, 1383 (1998), the insurer argued on appeal that the lower court had wrongfully determined that the insured was entitled to coverage under a […]