David Adelstein | Florida Construction Legal Updates
When it comes to insurance contracts, there is a rule of law that states, “where interpretation is required by ambiguity in insurance contracts[,] the insured will be favored.” Pride Clean Restoration, Inc. v. Certain Underwriters at Lloyd’s of London, 46 Fla. L. Weekly D2584a (Fla. 3d DCA 2021) (citation and quotation omitted). Stated another way: ambiguities in insurance contracts will be interpreted in favor of the insured and against the insurer.
With this rule of law in mind, insureds oftentimes try to argue ambiguity even when there is not one. This was the situation in Pride Clean Construction. In this case, the property insurance policy contained a mold exclusion that stated the policy did NOT insure for “a. loss caused by mold, mildew, fungus, spores or other microorganism of any type, nature, or description including but not limited to any substance whose presence poses an actual or potential threat to human health; or b. the cost or expense of monitoring, testing, removal, encapsulation, abatement, treatment or handling of mold, mildew, fungus, spores or other microorganism as referred to in a) above.” Not only did the policy not insure for loss caused by mold, it went further to state it was NOT insuring for any mold testing or abatement.
In this case, the insured sustained hurricane-related damage. This damage included mold remediation services. The insured (that assigned her benefits under the policy to the mold remediator) argued the policy was ambiguous because it does not identify whether it covers a covered loss that causes mold. In making this argument, the insured relied on Florida’s Supreme Court case, Sebo v. American Home Assurance Co., Inc., 208 So.3d 694 (Fla. 2016), that adopted what is known as the “concurrent cause doctrine,” holding: “[T]hat when independent perils converge and no single cause can be considered the sole or proximate cause [of the loss], it is appropriate to apply the concurring cause doctrine.” – “[T]he concurrent cause doctrine provides that coverage may exist where an insured risk constitutes a concurrent cause of the loss even when it is not the prime or efficient cause [of the loss].” Pride Clean Construction, supra (internal quotations and citation omitted).
Here, however, there was no reason to apply the concurrent cause doctrine to determine the cause of the loss and whether the loss was caused by mold [excluded] or a hurricane [covered], because the policy contained a blanket exclusion that excluded “the cost or expense of monitoring, testing, removal, encapsulation, abatement, treatment or handling of mold.” Mold remediation was blanketly excluded; hence, the cause of the mold was irrelevant for purposes of the policy covering mold remediation-type costs.
This brings up an important consideration. Read your policy and understand what is covered and what is not covered. If there is a concern regarding mold or mold remediation, you need to understand your rights as to whether there is a policy that can meet your insurance needs even if the policy includes a certain sub-limit to provide some coverage. But you can extend this beyond mold because blanket exclusions will automatically exclude certain coverage and you want to make sure you have an understanding as to what is excluded – no matter what – to ensure your rights are sufficiently insured!