Vagueness of policy is grounds for reversal

The 7th Circuit Court of Appeals has reversed a District Court’s grant of summary judgment in favor of St. Paul Fire & Marine Insurance Company, holding that the language of its insurance policy creates a question of liability for deductible payments.

In St. Paul Fire & Marine Insurance Company v. Schilli Transportation Services, Inc., No. 11-2307, U.S. District Court, Northern District of Indiana, Hammond Division, Schilli Transportation Services claimed that under its insurance policy provided by St. Paul Fire & Marine, the liability for deductibles is unclear.

The 7th Circuit said Schilli’s policy states the “words you, your and yours mean the insured named here, which is a CORPORATION.” The policy document lists Schilli’s name and address, but also states “Insured Names Continued on Back.” On the back of the document, eight more companies are listed.

The fact that the policy names nine companies as insured, along with the manner they were listed, could indicate that the companies were the “you, your and yours” referred to in the document. But the 7th Circuit concludes that language is not sufficient in and of itself to create joint and several liability among defendants for the deductibles. The Circuit Court also wrote that no language clearly indicates that the liability is joint, not separate, and it remanded for further proceedings.