When a Property loss occurs, you know what amount will be necessary to  rebuild your property Liability is another story whereby one does not know what amount will be required for a judgment.  Now I know the Town speaks of Eminent Domain, but should people die in a fire or should a roof collapse that would be thrown out of the window.  Because the Town should have known they elected to rent or own a dilapidated building which will cost a fortune to fix and maintain.  After all the School Board did not fix it throughout the years, but you will be fixing it at the Town’s expense and after it is fixed under a lease, who says that the School Board will then take it back and sell it.
Now we know the Town officials are lax on insurance and what they need to know is that each contract under a lease requires the Lessor (The Town) to carry a specific amount of insurance.  Since the Florida Municipal Trust only provides a $300,000 limit of liability, and our attorneys and officials don’t seem to read the contracts they sign, you’d better be certain that the contract is read.  Then FMIT may have to provide you a separate Owners, Landlords and Tenants Liability policy.

Expected  or intended injury or damage is not covered. It is not the intent of insurance policies to cover deteriorated property which is not maintained or to replace property that clearly is gradually deteriorating.  Fix your leaky pipe before it becomes a problem. Fix your eaves or the roof leak And this is a problem with the SHE Building.  And with part of the structure falling into a sinkhole after we had 30 inches of hurricane damage, we have no idea what that structural problem did to the entire building.

Liability contracts specifically exclude intentional injury or damage. Only reasonable force to protect persons or property is acceptable.  Defense may be provided but if it is found that such intentional injury or damage was performed with malice, a judgment may be not be indemnified by the insurer.  The policy through FMIT does however include the Police Department but the specific Owners Landlords and Tenants liability would only provide coverage for premises and operation.


Because of a claim involving waste seeping into a waterway, year after year, a known injury or damage clause was added to the liability insurance forms. If the damage was known to have occurred at a specific time, it could not be carried into another policy term.  This exclusion was added because the courts interpreted “Occurrence” (an accident including continuous and repeated exposure to substantially the same general harmful conditions) as applying to each policy written for the years in which the damage was repeated.  In other words, a judgment was made whereby each insurer was required to pay the maximum each occurrence limit offered under the insurance contracts for each and every year of the continuous and repeated exposure. This set a precedent that was not intended by the definition of “occurrence”.  The insurance industry responded by curbing any future losses of this nature by placing a “Known injury or Damage” endorsement to curb any future court interpretations of this nature.  So we know SHE has damages and as the lessee for $1.00 a year, if the building is not fixed and maintained, the Town will be responsible if it is because of a result of a known damage.

The “Known injury or Damage” clause basically stipulates that if any insured or employee authorized by the insured to give or receive notices of occurrences or claims, knew that the bodily injury or property damage had occurred in whole or in part, then the continuation, change or resumption of such bodily injury or property damage occurring during or after the policy will be deemed to have been known prior to the policy period.  In other words, if a loss is known to have happened during one term, that knowledge is sufficient to preclude such loss from extending into another term.   Adequate limits should be considered for any term of coverage, and it is not the intention of the insurance industry to stack terms of liability from one year to the next if a known loss has occurred. If this clause had not been established, liability insurance costs would have soared. NO ONE KNOWS IF A SPECIFIC TYPE OF LOSS HAS OCCURRED EXCEPT FOR THE SCHOOL BOARD BUT YOU CAN BET THE BUILDING WILL BE INSPECTED BY A PROSPECTIVE INSURER.


Under the liability section, you will note how important the definitions of what may be considered a covered contract may be as well as clauses pertaining to limits which may be joint and severable.   To be jointly and severable liable holds each party individually liable as well as jointly liable in the event of a loss, whether or not one or more of the parties caused the damage or injury. THIS MEANS THE LESSEE, THE SCHOOL BOARD, WILL DRAFT UP A CONTRACT, WITH THE LESSOR THE TOWN OF WHITE SPRINGS. DEPENDENT UPON THE CONTRACTUAL RELATIONSHIP, IT MAY BE THAT THE SCHOOL BOARD WILL PASS ALL LIABILITIES TO THE TOWN.   IF THE PROPERTY IS GIVEN TO THE TOWN INSTEAD OF A LEASE, THE TOWN IS SOLELY RESPONSIBLE.


All commercial general liability policies (including the Florida Municipal Trust) protect your business against claims or suits for which you (in the scope of your business duties) or your business may become legally obligated to pay damages because of bodily injury, sickness or disease including death and property damage.   Notice, a general liability policy pays only if you become “legally obligated” to pay.  If you are not legally obligated, no payment will be made.  However, you still may be provided defense coverage.  Such defense is usually outside the limit of insurance and ends only when a judgment or settlement is made under the policy limits and the limits of the policy have been used up  And although FMIT at one time did not have defense outside of the $ 300,000 limit of liability, they now have defense outside of the limit.

Being provided defense coverage outside of the applicable limit of liability is extremely important.  If you are not responsible or held liable by means of the court requiring payment of a judgment or settlement, the defense costs paid will not reduce your limit of liability.   The limit of liability will be kept in tact.  The expenses paid in defending a suit made against you, however, may affect your overall loss experience.  This may mean increased premiums on your next renewal.

This is especially important should you have an umbrella or excess liability policy which does not renew at the same time as your general liability policy.  Most umbrella/excess insurers include within their policies what is called an “unimpaired aggregate” endorsement.  This endorsement basically stipulates your umbrella insurer expects its underlying policy limits to not be impaired by payment of a judgment or settlement.  If there is such an impairment (a judgment paid) shortly after purchasing your umbrella policy, you may be responsible for the difference between the aggregate limit which is required as underlying insurance by the umbrella insurer and the amount required by the judgment.  FMIT provides an additional $300,000 for specific judgments relating to Federal Suits I believe only..

If you have consistently retained the same umbrella liability carrier, they are aware of your loss history and as long as the insurer renews your coverage, the unimpaired aggregate endorsement will not be applicable, because your policy premium has been rated by the underwriter to include such impairment.  However it may be that you will be required to carry the limits required by the School Board similar to limits required by Hamilton County.  And the reason you may have to purchase a separate liability policy for SHE is due to the fact that most umbrella liability carriers require at least an underlying General Liability limit of $1,000,000 each occurrence/$2,000,000 aggregate of which FMIT only provides $300,000 aggregate.

If you are under lease with the School Board your liability exposure will pertain only to your Premise at SHE and your operations.  If anyone does work at the school on your behalf, the Town better be assured they have a contract for such work and that the contractor has the appropriate insurance. There is no contractual liability provided under an owners landlords and Tenants liability policy except for incidental contracts.


By policy definition this portion of the general liability policy pertains to the exposure to loss arising out of the ownership, maintenance or use of your premises or out of the operations conducted at or away from those premises.  Mainly this section of the general liability policy pertains to the duties owed to others at your premises or at other premises on which you are performing work.   Coverage does not apply once your work has been completed and once you have left the premises, or after your product has been sold. Respective completed operations and products coverage would be required which are not usual under an “Owners, Landlords and Tenants Liability Policy”..


Another liability policy which pertains strictly to your premises and operations is the “Owners’ Landlords’ and Tenants Liability” policy. 


Many contracts drafted by attorneys utilize the verbiage “Owners’ Landlords’ and Tenants’ liability must be maintained for a limit not less than $1,000,000.   This is part of the premises and operations coverage provided by a Comprehensive General Liability policy.  And as the title of this coverage indicates, it provides premises and operations coverage of the owner, the landlord and any tenant.  If your contract, however, requires that you also carry products and completed operations, the Owners’ Landlords’ and Tenants’ liability will not respond.  You need to be provided a Comprehensive General Liability policy including products and completed operations.   However, the classification of your risk may be subject to product liability being included within the general aggregate limit.  The exposures under this form of coverage consist of area, frontage, and other non-auditable exposure including number of units.


Usually a Comprehensive General Liability policy is recommended or required by contractual agreements to be written for a limit of not less than $1,000,000 each occurrence with a $2,000,000 aggregate limit applying.   Some contracts may be confusing by stipulating they wish $1,000,000 for Bodily Injury, $1,000,000 by Death, $1,000,000 Property Damage, $1,000,000 Personal Injury Liability, $1,000,000 Advertising Injury (All of which fall under the each occurrence limit and the general aggregate limit).    You then must determine, as a business owner, whether a $5,000,000 per occurrence limit is being requested or since each are a part of the per occurrence limit usually subject to a $2,000,000 aggregate limit, whether you may be required to provide a $4,000,000 umbrella/excess liability policy over your $1,000,000 per occurrence limit.

Although insured contracts are primarily associated with the Products-Completed Operations hazard, there are certain contracts which may be covered under premises and operations section of the general liability policy.  These contracts are called “Incidental Contracts” and may be included even if all other contracts are excluded from coverage.  I have only seen one restrictive policy in which all contractual liability was excluded by eliminating all contracts including incidental contracts.  Both the buyer and insurance agent must consider ordering copies of any liability policies which are not ISO or standardized forms, in advance of binding coverage.  The incidental contracts are as follows:


  1. A contract for lease of premises. However, that portion of a contract which indemnifies any person or organization for damages by fire to a premise which you are renting or temporarily occupying is not considered an “insured contract”.   You are provided automatically a $50,000 or $100,000 limit of Fire Damage for any one fire under the each occurrence limit.   Because property in your care custody and control is excluded under a liability contract, such a contract to indemnity a person or organization for damages by fire, is prohibited.  There are ways of handling such a contract.  You may ask your general liability insurer to increase your Fire Damage limit to the amount required by contact or agreement.  Or you may ask a property insurer to provide insurance on that portion of the building for which you are responsible, based upon the values which the person or organization may have required you carry.  If you are contractually obligated to insure the premises, the property insurer may construe you to possess an insurable interest and write a property insurance policy for you.   If a landlord provides you with a property indemnification contract, any changes to the contract which may be required by you must be made prior to signing the agreement.  Values must be provided by the landlord and agreed upon by the two parties to the lessor/lessee contract.  This is an area where it may be wise to solicit your attorney’s opinion, especially if there are no other such properties available which suit your business operations.  Otherwise, this may be construed a contract of adhesion where you have no alternate choices but must accept the terms of the contract.  Yet, your attorney may find the means to assist you so the contract is not purely one sided in favor of the Lessor.  Valuations as to the limit specifically requested in a contract or agreement are important.  If you are required to provide coverage on a replacement cost basis, the contract needs to include an appraisal to establish the limit or a stated value listed by contract. I Guarantee, however, you will not be able to carry a Fire Damage limit alone on SHE,  And with the condition of the building depreciation will be considered or in other words, coverage will be provided on an Actual Cash Value Basis.


  1. A sidetrack agreement.


  1. Any easement or license agreement except in connection with construction or demolition operations on or within 50 feet of a railroad. If such work is being performed, you will be required by the railroads involved to be provided Railroad Protective Liability coverage for such operations.  The railroads usually require limits of $1,000,000 each occurrence and a $3,000,000 General Aggregate Limit.  The policy is written in the name of the railroad, and the contractor is included as an additional insured.    


  1. An obligation, as required by ordinance, to indemnify a municipality except this does not include performing work for a municipality. Such contractual obligations do not fall within incidental contractual exposure. This only pertains to indemnification due to municipal ordinances.


  1. An elevator maintenance agreement. Review your maintenance agreement.  There are some maintenance contractors today whose contracts are unilateral in scope.  What this means is that although the maintenance contractor holds you harmless from injury or damage, you likewise hold the maintenance contractor harmless. If everyone is held harmless, then who is responsible for an injury or damage?  In the event of injury or damage because of a unilateral contract entered into, you may be legally liable for injury or damages because of the maintenance contractor’s faulty workmanship.  After all, the contractor has successfully transferred all exposures of risk to you by contract or agreement and you are holding the contractor harmless from any legal liability as a result of the work performed.  Insurance companies’ loss control personnel are reviewing your elevator maintenance agreements and are making recommendations which require any wording which would make you responsible to be You may not hold the maintenance contractor harmless but the maintenance contractor must hold you harmless and include you as an Additional Insured under the maintenance contractor’s general liability policy which should include completed operations.  Failure to comply with such a recommendation made by the insurer’s loss control representative may jeopardize your liability insurance.


  1. Host Liquor Liability coverage is found under the Liquor Liability exclusion. As long as you are not in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages, you are provided host liquor liability.  Should you become legally liable by reason of causing or contributing to the intoxication of any person, furnishing alcoholic beverages to a person under legal drinking age or one that is under the influence, you have coverage for defense and any judgment which may be made against you if you are found legally liable.  Remember, however, that if the act is intentional, coverage will be excluded.  All such acts must be unintentional and the injury or damages would have had to have occurred because you are not in the business of manufacturing, distributing, selling, servicing or furnishing alcoholic beverages.




  1. Although pollution is excluded under the general liability policy, there may be some pollution coverage in certain instances, unless an absolute pollution or total pollution exclusion endorsement is added to the policy. If these exclusionary endorsements are not added, there may be coverage for bodily injury due to smoke, fumes, vapor or soot which originated or was produced from equipment used to heat, cool or dehumidify the building.  Also bodily injury or property damage arising out of pollution from a hostile fire may be covered.  The absolute pollution exclusion endorsement may also make an exception of the exclusion to cover hostile fires.  Likewise if an absolute or total pollution endorsement is not added there may be coverage for bodily injury or property damage arising out of the escape of fuels, lubricants or other operating fluids which are needed to perform the necessary electrical, hydraulic or mechanical functions for the operation of mobile equipment.  Of course, in order to be provided coverage, the act may not be intentional.  Pollution liability coverage may be written in conjunction with your general liability policy, as a stand alone product or as a separate coverage part to the general liability policy, listed as coverage D.  CLIENT COVERAGE ONLY FOR INSURED’S OPERATION    Under the Pollution exclusion there may be another exception, relating to an additional insured which has been added under the policy.  If you are a contractor and you add the site you are performing ongoing operations to your liability policy but you have never occupied, rented, or owned the property, nor has it been loaned to you, the contractor, coverage including defense may be provided for the additional insured who actually occupies, rents, owns or has been loaned the property, because of a covered pollution incident.  Again, coverage may not be provided for you, but such will be provided to the additional insured if your contract includes these provisions.     To explain this in another manner, clients who are added as an additional insured and are covered under the contractor’s policy by written contractor or agreement may have pollution coverage because of work performed by the contractor, even though the contractor is not provided pollution coverage under the policy exclusions.   If there is a question as to whether coverage is provided, secure a pollution liability policy.


h           Non-owned Watercraft liability coverage is included as an exception to the Aircraft, Auto or Watercraft exclusion.  As long as the watercraft is not owned by you and is less than 26 feet long and not used to carry persons or property for a charge, you will have coverage.   An exception has also been made for watercraft while ashore or on a premise you own or rent.


i            The operation of Mobile Equipment is included as long as it is not being transported by an auto owned or operated by you, or used in any prearranged racing, speed, demolition or stunting activity.  Mobile equipment by definition includes land vehicles and any attached machinery or equipment as well as vehicles which are not self-propelled and which are maintained primarily to provide mobility to permanently attached equipment such as air compressors, pumps and generators. For years, the definitions of mobile equipment were very vague.  At one time, if a contractor used an unlicensed pickup on a construction site without operating it on public roads, it could be deemed a piece of mobile equipment.  Thereafter, concise wording to describe what was and what was not mobile equipment was specifically stated in the descriptions of the policy.  Now it has been simply been written to include mobile equipment while used in your operations, but not to include such equipment is on public roadways whether self-propelled or being transported.   It then must be provided coverage under automobile liability and physical damage insurance, not general liability insurance. Mobile equipment includes equipment designed for use principally off public roads; vehicles maintained for use solely on or next to premises you own or rent; those which travel on crawler treads; those vehicles which are self propelled or not self-propelled which are maintained primarily to provide mobility to permanently mounted equipment such as power cranes, shovels, etc, including traders and scrapers. The definition also includes vehicles which are not self-propelled but which are used to provide mobility to permanently attached equipment such as air compressors, welders, cherry pickers used to raise or lower workers and other servicing equipment.  However, if the vehicle is used solely to transport persons or cargo it is not considered mobile equipment.  Certain self propelled vehicles with permanently attached equipment such as equipment used for snow removal, road maintenance or street cleaning are not “mobile equipment” but are considered autos.  Cherry Pickers mounted on automobiles or truck chassis used to lift and lower workers, likewise are not considered mobile equipment.  These items are considered items to be insured under an automobile policy.  “Mobile Equipment” also does not include any land vehicles that are subject to compulsory or financial responsible laws or other motor vehicle insurance laws.


Remember is a Child is hurt, this law applies:



“Attractive Nuisance Doctrines” apply to children under 16 years of age who are trespassing.  If you know of a condition where children are likely to trespass and that condition involves unreasonable risk of death or serious bodily harm to children, children because of their age will not realize the condition as being dangerous.  Therefore, its removal outweighs the burden of the possibility of harm to children.  Should you fail to exercise reasonable care to eliminate the danger or otherwise protect children, you are liable to the full extent of the law.


There you have it.  It may be that FMIT may require s separate Owners’ Landlords’ and Tenants’ liability purchased by the Town if the contract between the School Board and the Town require it.  It will be required most likely because the Town does not carry the same limits as the School Board and even the School Board Insurer, will require any lessor like the Town to carry the same limits as the School Board as to not impute such liability of the Town’s maintenance and use of SHE on the School Board.   If the Town is given ownership, there is a greater responsibility that FMIT may not wish to take under the existing Municipal policy since it is the intent of the Town to lease the property to others and under such lease there must be contracts prepared by attorneys.
If you are Lofton, or Tonja Brown you have no idea what may be required.  However, Rhett should know and he is using Lofton to do his bidding, in my opinion to help Johnny Bullard.  Lots of Luck!  And I do not believe Karen Hatton has any idea of what needs to be done in establishing a contractual agreement so there goes extra dollars to another attorney.  ARE YOU PEOPLE WITH THESE PIE IN THE SKY IDEAS KIDDING ME.  LET JOHNNY BULLARD HANDLE SHE SINCE HE DID NOTHING TO MAINTAIN THE BUILDING IN THE FIRST PLACE.


Karin for the blog

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