A federal district court in Florida interpreted the term "sublimit of liability" in an excess insurance policy in a way that excluded the insurer's coverage obligations on a premises liability claim.

While Zackery Ryan Ganoe and Andrew Bickford were guests at the Days Inn of Kissimmee, they were attacked by a woman who murdered Ganoe and attempted to murder Bickford.

Bickford sought to recover damages from the operator of the Days Inn, Polynesian Inn LLC, alleging it failed to provide adequate security in the 2017 stabbing.

The claim was subject to a $25,000 limit for assault claims under an endorsement to a commercial general liability insurance policy issued to Polynesian by Northfield Insurance Co.

Polynesian also had an excess liability insurance policy from Starstone National Insurance Co., which was a "following form" policy that provided no coverage where the coverage in the followed policy (the Northfield policy) was subject to a "sublimit of liability."

Starstone went to court, contending the $25,000 limit for assault claims was a "sublimit of liability" and its policy did not provide coverage for assault claims and, more particularly, the claim arising from the assault on Bickford.

For its part, Polynesian contended the lower assault and battery limit was a standalone limit, not a sublimit, and the Starstone policy provided coverage for any assault claims exceeding the $25,000 in coverage provided by the Northfield policy.

The parties moved for summary judgment.

The district court, applying Florida law, granted summary judgment in favor of Starstone.

In its decision, the court observed the Starstone policy did not define sublimit or sublimit of liability.

The district court found the "plain and ordinary meaning" of sublimit was reflected in the International Risk Management Institute definition as: "A limitation in an insurance policy on the amount of coverage available to cover a specific type of loss. A sublimit is part of, rather than in addition to, the limit that would otherwise apply to the loss. In other words, it places a maximum on the amount available to pay that type of loss, rather than providing additional coverage for that type of loss."

Under this interpretation, the district court said the term "sub" was used in a way that was synonymous with "under," "below" or "beneath." It aligned with the way "sublimit of liability" had been used in case law — as a limit on a subcategory of liability.

The district court concluded that, as a matter of law, the Northfield policy's $25,000 in coverage for bodily injury caused by assault or battery was a sublimit of liability as that term was used in the Starstone policy and, accordingly, the Starstone policy did not cover Bickford's claim.

The case is Starstone National Insurance. v. Polynesian Inn, No: 6:18-cv-1048-Orl-31EJK (M.D. Fla. Aug. 26). Attorneys involved include: For StarStone, plaintiff: Rory Eric Jurman and Viviana Arango Loshak, Hinshaw & Culbertson, Fort Lauderdale. For Polynesian Inn, doing business as Days Inn of Kissimmee, defendant: Mark Andrew Nation, Gregory D. Swartwood, lead attorneys, Nation Law Firm, Longwood. For Andrew James Bickford, Defendant: Karina de Oliviera Rodrigues and Todd Falzone, Kelley Uustal, lead attorneys, Fort Lauderdale; Stuart Scott Busby, lead attorney, Busby Negin, Atlanta. For Polynesian Inn, counter claimant: Mark Andrew Nation, Gregory D. Swartwood, lead attorneys, Nation Law Firm, Longwood. For StarStone, counter defendant: Rory Eric Jurman and Viviana Arango Loshak, Hinshaw & Culbertson.

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Meyerowitz is the Director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. Contact him at smeyerowitz@meyerowitzcommunications.com.