(Article from Insurance Law Alert, April 2021)
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Reversing a trial court decision, a Florida appellate court ruled that an insurance policy provided only $1 million in coverage (rather than $2 million) for a mid-air collision between two airplanes based on language in the policy’s limit of liability provision. Endurance Assurance Corp. v. Hodges, 2021 WL 1115452 (Dist. Ct. App. Fla. Mar. 24, 2021).
A mid-air collision between two airplanes resulted in the death of four individuals. Their estates filed wrongful death claims against Dean Aviation, the flight school that owned both airplanes. Dean Aviation was insured by Endurance under a policy with a $1 million per-occurrence limit. The plaintiffs argued that the policy provided a total of $2 million in coverage, $1 million for each airplane involved in the accident. Plaintiffs relied on a separability clause that stated “[w]hen two or more Aircraft are insured under this Policy the terms of [the] Policy will apply separately to each.” The trial court agreed and issued a declaratory judgment in plaintiffs’ favor.
The appellate court reversed, ruling that the separability clause did not alter the $1 million limit on liability. In particular, the court relied on a “regardless” clause in the limit of liability provision which stated that “[r]egardless of the number of Insureds under this Policy, persons or organizations who sustain Bodily Injury or Property Damage,” total liability is limited by the per-occurrence limits stated in the policy. The court noted that under Florida law, inclusion of “qualifying [regardless] clauses evidences an established custom in the insurance industry . . . where the intent is to limit liability coverage to a single amount, even though multiple insured vehicles are involved in an accident.”