Miller Elec. Co. of Fla. v. Employers' Liability Assur. Corp., F-399
| Decision Date | 14 January 1965 |
| Docket Number | No. F-399,F-399 |
| Citation | 171 So.2d 40 |
| Parties | MILLER ELECTRIC COMPANY OF FLORIDA, a corporation, Appellant, v. The EMPLOYERS' LIABILITY ASSURANCE CORPORATION, Limited, Appellee. |
| Court | Florida District Court of Appeals |
Herman Ulmer, Herman Ulmer, Jr., Davisson F. Dunlap, and John D. Corse, of Ulmer, Murchison, Kent, Ashby & Ball, Jacksonville, for appellant.
Harry T. Gray, Francis P. Conroy, II, and H. Franklin Perritt, Jr ., of Marks, Gray, Yates, Conroy & Gibbs, Jacksonville, for appellee .
Appellant, Miller Electric Company of Florida, a corporation, filed its complaint seeking a judicial declaration as to its rights under a comprehensive liability insurance policy issued it by appellee, The Employers' Liability Assurance Corporation, Limited. From an adverse decree Miller has appealed.
Appellant Miller is a general electrical contractor and is not engaged in the manufacture of products. It procured from Employers' a comprehensive liability insurance policy by which Employers' agreed to pay on behalf of Miller all sums which the latter shall become obligated to pay by reason of liability imposed upon it by law for damages because of bodily injury sustained by any person or persons. While the insurance policy was in force and effect Miller performed a contract for the Florida State Board of Control which consisted of the construction and installation of an electrical distribution system designed for the purpose of transmitting electrical power from its generated source to various buildings at the Miller Health Center of the University of Florida at Gainesville . After Miller had completed performance of its contract, but while the policy of insurance was still in force and effect, an employee of the Board of Control, while servicing an underground cable, was injured as a result of the alleged negligent installation of the transmission system by Miller. The injured employee brought suit against Miller who immediately notified Employers' of its pendency and made demand upon Employers' to assume the defense of the action and to pay any judgment which may be rendered against Miller within the coverage limits of the insurance policy. Employers' disclaimed any liability under its insurance policy with Miller on the ground that under the products hazard exclusionary clause of the policy Employers' has no obligation to Miller for injuries to third persons which arise after Miller's performance under its contract is completed and it has abandoned the construction site. It was because of Employers' refusal to assume liability and defend the action that Miller instituted this suit for declaratory decree seeking a determination as to the liability or nonliability of Employers' under the insurance policy in question.
No disputed issue of fact is involved in the case, the question presented for decision being solely one of law. By his decree the chancellor found that Miller is not a manufacture of products but is a general electrical contractor and the liability asserted against Miller in the suit brought by the injured employee is upon a claim that Miller negligently performed its contract with the Board of Control. The sole question presented for decision is whether the exclusion of 'products hazard' as defined in the insurance policy under consideration operates to limit the general liability coverage of the policy only to injuries resulting from the negligence of the insured occurring during the progress of the work, and to exclude liability if such injuries occur after the work is completed. In summary, the chancellor held that appellee Employers' was under no duty to defend the suit brought against Miller for the reason that the injuries suffered by the plaintiff in that suit were sustained after Miller's contract was completed, and liability therefore is not covered by the terms and provisions of the insurance policy. It is from that declaratory decree that this appeal is taken.
The insurance policy involved in this case is entitled 'Comprehensive Liability Policy' and contains the following provisions which bear upon our consideration of the question presented, to wit:
'DECLARATIONS
The insurance afforded is only with respect to such and so many of the following coverages as are indicated by specific premium charge or charges * * *
'Item 3. * * *
The products hazard as defined is Excluded under Coverage B
'Item 4.
Coverages Limits of Provisional
Liability Deposit
Premium
--------------------------------------------------------------------------
* * * * * * * * * * * * * * *
Coverage B-- $100,000.00 each person $532.55
Bodily Injury Liability $300,000.00 each occurrence (Monthly
Except Automobile 7 $ Not covered aggregate Dep. Prem.)
products
LIABILITY ASSURANCE CORPORATION, LIMITED (A Stock Insurance Company, herein called the Company) Agrees with the Insured, named in the declarations made a part hereof, in consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy:
'INSURING AGREEMENTS
'* * *
Coverage B--Bodily Injury Liability--Except Automobile. To pay on behalf of the Insured all sums which the Insured shall become obligated to pay by reason of the liability imposed upon him by law, or assumed by him under contract as defined herein, for damages, including damages for care and loss of services, because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person or persons.
* * *
* * *
'EXCLUSIONS
'This policy does not apply:
* * *
* * *
(g) under Coverages B * * * to the products hazard as defined, except in so far as this exclusion is stated in the declarations to be inapplicable; * * *
'CONDITIONS
* * *
* * *
'Definitions. * * *
'(d) PRODUCTS HAZARD. The term 'products hazard' shall mean
'(1) the handling or use of, the existence of any condtion in or a warrantly of goods or products manufacturer, sold, handled or distributed by the named Insured, other than equipment rented to or located for use of others but not sold, if the accident occurs after the Insured has relinquished possession thereof to others and away from premises owned, rented or controlled by the Insured or on premises for which the classification stated in the Company's manual excludes any part of the foregoing;
'(2) operations, if the accident occurs after such operations have been completed or abandoned at the place of occurrence thereof and away from premises owned, rented or controlled by the Insured, except (a) pick-up and delivery, (b) the existence of tools, uninstalled equipment and abandoned or unused materials and (c) operations for which the classification stated in the Company's manual specifically includes completed operations; provided, operations shall not be deemed incomplete because improperly or defectively performed or because further operations may be required pursuant to a service or maintenance agreement.'
Since the question of law presented for determination calls for a judicial construction of an exclusionary provision of an insurance policy, it might be helpful to first consider some general principles of construction which must be observed as guidelines in reaching our decision. In construing an insurance policy for the purpose of determining the intent of the parties, the instrument must be considered in its entirety, and that construction should be adopted which will give effect to the total instrument and to each of its various provisions. 1 Clear and unambiguous language should be accorded its natural meaning, 2 and the courts should not extend strictness in construction to the point of adding a different meaning to language that is clear. 3 Where a contract of insurance is prepared by the insurer, it is to be construed liberally in favor of the insured and strictly against the insurer in those instances where the meaning of the language is doubtful, uncertain, or ambiguous. 4 Terms in an insurance policy which are ambiguous, equivocal or uncertain to the extent that the intention of the parties is not clear and cannot be clearly ascertained by the application of ordinary rules of construction, such terms are construed strictly and most strongly against the insurer and liberally in favor of the insured so as to effect the primary purpose of payment to the insured. 5 The reason underlying this principle is that insurance policies are prepared by experts employed by the insurer, and the relationship of each provision to the others contained in the policy is difficult for laymen to understand or fully appreciate. 6 Where there are two different interpretations which may fairly be given to the language used in an insurance policy, the one which allows the greater indemnity will govern. 7 It is with the foregoing general principles in mind that we now revert to the primary question presented by this appeal.
Appellant strenuously contends that it purchased and paid the premium for the policy of liability insurance issued by appellee in order to protect itself against loss which it might incur as a result of the negligent acts of its employees, and those for which it may be held liable, occurring in the performance of the work in which it is engaged as a general electrical contractor. Appellant contends that Coverage B pertaining to bodily injury liability affords it such insurance and protects it against the consequences of its negligent acts for injuries from accidents occurring during the policy period. Appellant therefore urges that since the suit brought against it by the employee of the ...
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