Coverage Limited to What the Insured Pays For at Inception
Barry Zalma
Dec 28, 2023
Read the full article at https://lnkd.in/gbmzYmdn and see the full video at https://lnkd.in/g4nVZ-uW and at https://lnkd.in/gfh-wGhF and at https://zalma.com/blog plus more than 4698 posts.
The Eleventh Circuit Court of Appeals was asked to resolve whether two residential homes destroyed by a fire while under construction were covered under an insurance policy issued by Travelers Property Casualty Company of America (“Travelers”) to its named insured, Talcon Group LLC (“Talcon”). Talcon is an underground utility contractor for sewer, storm drains, and treatment plants and never told Travelers it was building two residential buildings.
In Travelers Property Casualty Company Of America v. Talcon Group LLC, No. 22-13547, United States Court of Appeals, Eleventh Circuit (December 20, 2023) the Eleventh Circuit decided the extent of the coverage available to Talcon.
TWO RESIDENTIAL HOMES
Rick testified that “[a]lmost every bit” of Talcon’s work was underground utilities, such as sewers, storm drains, and treatment plant work. Talcon did not own the Florida land on which the two residential homes were constructed. Instead, the land was owned by a different family entity.
Talcon was to benefit from the sale of the two residential homes by becoming a “local vendor” in the county where the homes were being constructed, entitling it to a 5% advantage with other contractors when bidding on future projects in the county.
Wildfire Peril
In May 2020, a wildfire completely destroyed the two residential homes. At that time, the residential homes were mostly complete but did not have certificates of occupancy.
Talcon submitted a property loss notice, stating that the two residential homes were lost in the wildfires. Travelers denied the claim, because construction of two single family homes is not the same type of work as the installation of underground utility contractor work, which is what Travelers agreed to cover.
THE POLICY
In 2019 Talcon, through an insurance agent, submitted a ‘”Commercial Insurance Application” with Travelers. Talcon’s application was for a renewal of a 2018 policy with Travelers. In an application field titled “Description of Primary Operations,” Talcon listed “[u]nderground utility contractor.” Under the “Installation/Builders Risk Section,” Talcon selected “Installation,” indicated that it averaged three commercial projects each year and left blank a section to list the number and value of any residential projects. An e-mail to Travelers submitting the renewal application stated that Talcon conducted “predominately water and sewer line work,” and that a “heavy contractor questionnaire” was attached to explain Talcon’s exposures.
Travelers covered “Installation” property from direct physical loss or damage. The Policy “Definitions” section defined “Installation” as “[p]roperty described in the Declarations under ‘Installation’ owned by you or property of others for which you are legally liable, that you or your subcontractors will install, erect or fabricate at the job site.'”
THE SUIT
Travelers filed a complaint seeking a declaratory judgment that the two residential homes were not covered property under the Policy. The district court entered summary judgment in favor of Travelers. Because the two residential homes were unrelated to Talcon’s underground utility work, the court concluded that the Policy did not cover them declaring that the Policy’s coverage did not extend to the construction of the two residential homes.
DISCUSSION
Under Florida law every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any application therefor.
While Rick and Zack testified that Talcon constructed multiple residential homes in recent years, Talcon’s renewal application did not include this past residential work or indicate the prospect of future residential construction. Even though Talcon had begun constructing the two residential homes at the time of the renewal application, it misrepresented to Travelers that it was not engaged in any residential construction. Talcon, in fact, stated that 0% of its current work was “Residential” and 100% was “Municipal/Government.”
The Eleventh Circuit concluded that the only reasonable reading of the Policy and the renewal application is that Travelers provided coverage for Talcon’s underground utility and site development work. The construction of the two residential homes was neither of those items and was not covered by the Policy.
ZALMA OPINION
The covenant of good faith and fair dealing requires that neither party to the contract of insurance will do anything to deprive the other of the benefits of the contract nor misrepresent or conceal material facts from the other. In this case Talcon lied when it submitted its application by claiming it did no residential construction work at the time that it was, in fact, constructing two residential properties. Since it is true that liars never prosper the lie about the work being done defeated its claims.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Follow me on LinkedIn: http://www.linkedin.com/comm/mynetwork/discovery-see-all...
Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Subscribe to my substack at https://lnkd.in/gus8Mzkq; go to the Insurance Claims Library – https://lnkd.in/gwEYkxD.
Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
The Collateral-Source Rule is a Narrow Exception to the Prohibition Against Double Recovery
Post 4850
Posted on September 23, 2026 by Barry Zalma
A Surety Stands In The Principal’s Shoes And May Assert The Principal’s Defenses.
In Hudson Insurance Company v. Archer Western Federal, JV, No. 1:24-cv-544 (PTG/IDD), United States District Court, E.D. Virginia, Alexandria Division (September 18, 2026) Archer Western Federal, JV (“AWF”), the prime contractor for a new fire station at Marine Corps Base Quantico, subcontracted roofing work to Eastern General Contractor, Inc. (“EGC”) for $456,330.
Hudson Insurance Company (“Hudson”) issued payment and performance bonds, each with a $456,330 penal sum.
AWF later sought recovery under both bonds.
LAW
Under Virginia law, the collateral-source rule is a narrow exception to the prohibition against double recovery. A surety stands in the principal’s shoes and may assert the principal’s defenses. Liability under the bonds required EGC’s ...
Defendants May Not Enjoin a Suit Alleging They Defrauded the Plaintiffs
Plaintiffs, automobile insurers, sued medical professionals and healthcare entities, alleging a scheme to submit fraudulent personal injury protection (PIP) bills and supporting documentation for services that were not performed or were medically unnecessary. The complaint asserted common-law fraud, violations of the New Jersey Insurance Fraud Prevention Act (IFPA), aiding and abetting fraud, unjust enrichment, and declaratory relief.
While the action was pending, Plaintiffs moved to stay and enjoin related PIP arbitrations. A magistrate judge recommended denial. in State Farm Guaranty Insurance Company v. Tri-County Chiropractic And Rehabilitation Center P.C., Civil Action No. 22-4852, United States District Court, D. New Jersey (September 15, 2026)
After the New Jersey Supreme Court decided Allstate New Jersey Insurance Company v. Carteret Comprehensive Medical Care, P.C., the federal court reopened the case and considered the parties’ supplemental...
Violate Terms of Probation and Go to Jail
Post 4848
Posted on September 21, 2026 by Barry Zalma
See the full video at and at
Kindness in Sentencing is Often Abused and Probation Becomes Jail
In State Of North Carolina v. Tia Allen, No. COA24-1010, Court of Appeals of North Carolina (September 16, 2026) Tia M. Allen pleaded guilty on 18 April 2022 to several offenses under a plea agreement. The trial court consolidated the convictions, imposed an 11-to-23-month sentence,
On 6 February 2024, her probation officer alleged that Allen had paid nothing, failed to report, and incurred new criminal charges. At the 26 March 2024 hearing, counsel admitted Allen’s nonpayment but did not admit commission of the new offenses; the court did not inquire into the failure-to-report allegation.
Defendant did not deny this probation violation. Instead, when the trial court asked whether Defendant wanted to admit any of the alleged ...
