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Missing Policies Haunt Dead Florists (NY)

December 17, 2009

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In an odd case, a New York federal court recently dealt with the issue of potential insurance coverage when neither the policyholder nor the insurance carrier retained copies of the relevant insurance policies in <i>Bianchi v. Florist Mutual</i>.
Plaintiff’s parents were shareholders in a flower growing business. Plaintiff was informed by the State that the location where his parents did business was an inactive hazardous waste site, and that plaintiff needed to pay for remediation. Plaintiff placed Florist Mutual on notice of a potential claim, and the insurer disclaimed coverage on the basis that the florist wasn’t insured during the potential loss period (which potentially spanned decades).
Neither party could come forward with any insurance policies, although the defendant admitted it insured the florists at some point. The Court noted that a party could use secondary evidence to try to prove the existence of a lost insurance policy upon a showing that party made a “diligent but unsuccessful search.” The party is then required to establish the contents of the policy by at least a preponderance of the evidence.
Here, plaintiff based his claim on various discussions he had with his parents regarding the fact that Florist Mutual was their insurance carrier for decades until they switched to a different carrier around 1986. Defendant’s computer search revealed a record of the plaintiff, but no specifics as to dates of coverage or policy content. The florist’s insurance broker also testified that he knew they switched from Flowers Mutual to a new insurer in 1986 when he met them because he reviewed policies issued by the Defendant for the period 1984 though 1986, but he could not state with any certainty how far back other Flowers Mutual coverage dated.
The Court acknowledged the policy search had been diligent but unsuccessful, but that there was insufficient evidence to establish a policy written by the defendant existed to cover the claim for most years. But the Court did find an issue of fact existed for the years 1984 through 1986, and said a jury could consider potential coverage for the claims during that period.

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