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March 12, 2025
CGL Policy not a Course of Construction Policy

Damage Before Project is Complete Excluded by CGL

Post 5013

Read the full article at https://lnkd.in/gutmTTj3, see the full video at https://lnkd.in/gsuFz3JM and at https://lnkd.in/g2m9myqZ, and at https://zalma.com/blog plus more than 5000 posts.

Consolidated appeals required the Eleventh Circuit to (1) decide whether an insured has standing to seek reformation before it makes a claim on the portion of the policy that it wants reformed, (2) construe an exclusion in a commercial general liability policy under Florida law, and (3) determine whether the district court properly denied the insured’s motion for attorney’s fees.

In Liberty Surplus Insurance Corporation v. Kaufman Lynn Construction, Inc., United Glass Systems Corp. Liberty Surplus Insurance Corporation v. Kaufman Lynn Construction, Inc., Nos. 23-12715, 23-12835, United States Court of Appeals, Eleventh Circuit (March 5, 2025)

See the full video at https://rumble.com/v6qh5hm-cgl-policy-not-a-course-of-construction-policy.html and at https://youtu.be/Y_peIPKxpiw

FACTS

The case involves JM Family Enterprises hiring Kaufman to build a new corporate campus in South Florida. Kaufman obtained a commercial general liability policy from Liberty Surplus Insurance to insure itself and its subcontractors. After Tropical Storm Eta caused significant water damage to the completed buildings, Kaufman sought indemnification from Liberty, which was denied based on the policy’s Course of Construction Exclusion (COCE). Liberty then filed a declaratory judgment action, and Kaufman counterclaimed for declaratory relief, breach of contract, and reformation of the insurance policy due to mutual mistake.

JM Family Enterprises hired Kaufman to build its new corporate campus in South Florida. The campus was to consist of three office buildings, a training and conference center, a sports and recreation building, a dining hall, an amphitheater, a central energy plant, a parking garage, and various landscaping and water features. To insure itself and its subcontractors, Kaufman obtained a commercial general liability policy from Liberty Surplus Insurance.

The district court granted Liberty’s motion for summary judgment, concluding that the COCE excluded coverage until the entire project was completed. The court also dismissed Kaufman’s reformation counterclaim for lack of standing. On appeal, the Eleventh Circuit reversed the district court’s dismissal of the reformation counterclaim, affirming that Kaufman had Article III standing to seek reformation. However, the court affirmed the district court’s ruling that the COCE precluded coverage for the water damage and denied Liberty’s motion for attorney’s fees.

ANALYSIS

The Course of Construction Exclusion (COCE) in the insurance policy issued by Liberty Surplus Insurance Corporation to Kaufman Lynn Construction, Inc. was significant because it determines the scope of coverage during the construction phase of a project. The COCE states that the insurance does not apply to any property damage at or to any project insured under the policy during the course of construction until the project is completed.

A court of equity has the power to reform a written instrument where, due to a mutual mistake, the instrument as drawn does not accurately express the true intention or agreement of the parties to the instrument. A mistake is mutual when the parties agree to one thing and then, due to either a scrivener’s error or inadvertence, express something different in the written instrument. Reformation can correct a mutual mistake in the description of the premises or articles insured due to the fact that in the case of a mere mutual mistake in the description of the subject matter equity will correct it to conform to the intention of the parties

Florida law subjects reformation claims to a five-year statute of limitations. An insured in Florida may need to bring a reformation claim soon after the issuance of the policy containing the mistake or risk forever losing the ability to fix the error.

The policy issued by Liberty to Kaufman was a general commercial liability policy and not a builder’s risk policy. The critical language in the COCE is the phrase “until the project is completed,” but the terms “project” and “completed” are not separately defined in the policy.

The language “until the project is completed” means that the COCE precludes coverage until the entire project is finished. It would have been better, of course, for Liberty to draft the COCE to expressly state that there is no coverage unless and until the “entire project” is completed. But Liberty’s failure to adhere to the standards of impeccable draftsmanship here does not result in ambiguity. The mere fact that a provision in an insurance policy could be more clearly drafted does not necessarily mean that the provision is otherwise inconsistent, uncertain or ambiguous.

The Eleventh Circuit concluded that Kaufman has standing to seek reformation of the policy. The Eleventh Circuit reversed the district court’s dismissal of the reformation counterclaim and remanded to the District Court for further proceedings.

With respect to the parties’ dispute about the policy the Eleventh Circuit affirmed the district court’s ruling that the COCE precludes coverage for the water damage to the buildings caused by Tropical Storm Eta.

ZALMA OPINION

A course of construction policy is designed to protect the owner and contractors for fortuitous losses in the course of construction. A commercial general liability policy is not intended to, and has no wording similar language to, a course of construction policy. The claims were for damage to the property that would be the subject of a course of construction policy but not a Commercial General Liability policy, especially one with a COCE.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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00:09:52
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March 11, 2026
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Post number 5301

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NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...

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March 11, 2026
Public Adjusters Attempt to Represent an Insured Subject to APA Clause

Anti-Public Adjuster Clause Is Effective in New York

Post number 5301

Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.

Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster

In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.

FACTS

NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...

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March 10, 2026
Acting as Your Own Lawyer is Foolish

Proof of Highly Contaminated Water is Required for Extra Payments

Post number 5300

Read the full article at https://www.linkedin.com/pulse/acting-your-own-lawyer-foolish-barry-zalma-esq-cfe-mbg0c, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.

Acting as Your Own Lawyer is Foolish

Evidence of Breach of Contract Survives Dismissal of All Other Charges

In Lee Lifeng Hsu and Jane Yuchen Hsu v. State Farm Fire And Casualty Company, C. A. No. N24C-09-020 CLS, Superior Court of Delaware (February 27, 2026) a claim to State Farm who paid approximately $61,000 after assessments but denied coverage for additional items including ceramic tiles, the kitchen floor ceiling, underlayment plywood, and numerous personal property items resulted in suit by the Hsu’s acting in pro per.
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Insurance Condition Requires Following the Intent of the Parties

Post number 5307

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In Eastside Floor Supplies, Ltd. v. SCS Agency, Inc., Hanover Insurance Company, et al., No. 2024-01501, Index No. 609883/19, 2026 NY Slip Op 01488, Supreme Court of New York, Second Department (March 18, 2026)

In May 2019, a fire damaged business personal property belonging to the plaintiffs, which was stored in portable storage containers at their Manhattan premises. At the time of the fire, the plaintiffs were insured under a businessowners insurance policy (BOP) issued by the defendant Hanover Insurance Company which provided general coverage for business personal property, and which included a specific extension for “Business Personal Property Temporarily in Portable Storage Units” (the portable storage ...

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ERISA Saves Fraudulent Claims Suit

Post number 5306

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Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity

In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.

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March 19, 2026
Failure to Provide Well-Pled Facts Defeats Most of Action

ERISA Saves Fraudulent Claims Suit

Post number 5306

Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.

Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity

In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.

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