PBSJ Corp. v. Federal Ins. Co.
(United States Court of Appeals, Eleventh Circuit, October 1, 2009)
Policyholder, PBSJ Corp., appealed the district court’s grant of summary judgment to insurer regarding the coverage owed under its policy for employee theft over multiple years. Policyholder purchased an insurance policy from insurer covering criminal acts, including employee theft for each year between 1992 and 2005 in the amount of $2 million. The policyholder sustained $42 million in losses due to employee theft during his period of time. However, policyholder only became aware of the loss in March 2005. As such, the policyholder contended that it was entitled to recover $2 million under each policy in effect during the years on which the employee theft occurred for a total of $17 million. The insurer contended that the policyholder is limited to recover $2 million only once under the 2004-2005 policy in effect at the time the policyholder discovered and reported the loss. After evaluating the detailed policy provisions, the court held that this and identical crime insurance policies issues by the insurer and interpreted by other courts are not, as the policyholder contends, occurrence policies. While the policyholder argued that its recovery may be aggregated across policies, the court held that the presence of both a non-accumulation clause and a clause limiting recovery to a stated maximum (i.e., $2 million) supports the conclusion that the insured is limited to the maximum recovery under one policy for an employee theft spanning multiple policies and years. Thus, the district court did not err in finding that the policyholder was only entitled to recover on $2 million and was not entitled to recover any amount under any of the predecessor policies.
For a copy of the decision, click here
By Paul Steck and Sharon Angelino