“Before the Court is, once again, the classic case of the insurer requesting relief from the consequences of the inartfully drafted, yet plain, terms of its insurance policy.” So begins the Eleventh Circuit’s recent opinion in Liberty Surplus Ins. Corp. v. Norfolk Southern Railway Co., No. 16-14767, 2017 WL 1228550 (11th Cir. April 4, 2017), where the court held that the unambiguous language of Liberty’s “Completed Work” exclusion did not bar coverage for injuries sustained by a motorist injured at a railroad crossing who later sued Norfolk Southern.

At issue is a lawsuit against Norfolk Southern and a contractor, NaturChem, Inc., alleging that plaintiff sustained severe injuries after being struck by a train at a railroad crossing because vegetation at the crossing obscured an approaching train. NaturChem’s duties under its contract with Norfolk Southern included biannual spraying and regular monitoring and maintenance of the railroad crossing.  The contract also required NaturChem to purchase a Railroad Liability Policy (the “Policy”).

Liberty Surplus Insurance Corp. (“Liberty”) filed suit seeking a declaration that it had no obligation to provide coverage to Norfolk Southern for the motorist’s claim, arguing that the Policy’s “Completed Work” exclusion barred coverage. Specifically, Liberty argued that the motorist’s claim implicated work completed by NaturChem because it had last treated vegetation at the crossing where the motorist was injured 90 days before the accident.  Because the Policy’s “Completed Work” provision excluded coverage “[w]hen all the ‘work’ to be done at the ‘job location’ has been completed,” and “[w]hen that part of the ‘work’ done at the ‘job location’ has been put to its intended use . . . ,” Liberty argued that NaturChem’s most recent work at the crossing in question had been complete for 90 days and that the site had been put back to its intended use as a crossing when the accident occurred.  Applying Georgia law, the trial court disagreed and entered summary judgment in favor of Norfolk Southern.

The Eleventh Circuit began its analysis with the familiar maxim that exclusionary language must be strictly construed against the insurer and in favor of coverage. The court also analyzed the plain terms of the “Completed Work” exclusion, including its use of the term “work,” which included by definition NaturChem’s obligations under its contract with Norfolk Southern.  But, because NaturChem’s maintenance and monitoring obligations were ongoing throughout the term of the contract, the court rejected Liberty’s argument that the work had been completed.

The decision serves as a reminder of several important points: First, courts continue to construe exclusionary provisions narrowly and against the insurer, even where the provision utilizes plain and unambiguous wording.  Second, in the context of contracts and agreements to supply services, work or operations over time, exclusions designed to bar coverage for completed work or operations must be explicit as to when the services, work or operations are deemed to be “complete.”  Where the language is questionable or unclear, policyholders are reminded to obtain a clear explanation from their insurer as to how or why an exclusion applies, and where appropriate, consult with experienced coverage counsel.