Lloyds Underwriters v. Keystone Equipment Finance Corp., 25 So3d 89 (Fla. 4th DCA 2009)
In this case, Keystone Equipment (the “insured”), purchased insurance coverage from Lloyds Underwriters (the “insurer”) for a commercial tractor trailer. The insurance policy had an effective date of November 30, 2004. On December 18, 2004, the tractor trailer was stolen. The insurer denied the claim although the policy provided coverage for theft. The written policy contained a “Garaging or Secured Yard Warranty” which required the insured to keep the tractor trailer in a closed garage, a guarded enclosed parking lot, or parked beside the insured’s residence. Because the insured had failed to store the tractor trailer in either of these ways, Lloyds found that Keystone was in breach of this warranty and was not entitled to recover damages for the stolen tractor trailer. At the time of the loss, Keystone had not yet received a copy of the insurance policy and was unaware of the warranty provision.Keystone filed suit against Lloyds for breach of contract and alleged that the insurer had not complied with the notice and delivery requirements of Florida Statutes Section 627.41 and 626.922. These statutes require that the insurer provide a copy of the policy to the insured and confirmation of the coverage’s terms and conditions within 60 days of the effective date of the policy. Keystone did not receive a copy of the policy until February 9, 2005 and had no notice of the “garaging warranty” prior to the theft.
The trial court decided in favor of Keystone and on appeal, the 4th District Court of Appeals (4th DCA) affirmed that decision. The 4th DCA acknowledged that the theft was covered under the policy and a premium had been paid for that coverage. Further, the Court reasoned that while an insurer is free to require its insured to warrant or promise to behave in a particular manner, the insured has a duty to inform the insured of this warranty before it can use non-compliance with such warranty as a denial or forfeiture of coverage.
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Tags: breach of warranty, insurance claims, insurance coverage, insurance lawyers, Lloyds
