Florida East Coast Holdings Corp. v. Lexington Insurance Co.
A railroad removed and later reinstalled crossing gates at roughly 600 locations ahead of Hurricane Irma, and its insurers denied the resulting claim as below the deductible. Applying Florida contract-construction principles, the Eleventh Circuit held that only the policy's 'Protection and Preservation of Property' provisions (Sections B and C) covered the precautionary expenses and related lost revenue, but that the applicable named-windstorm deductible was the $750,000 minimum — not 5% of the value of the protected (undamaged) locations — because no locations were damaged.
Key facts
- Florida East Coast Holdings Corp., a railroad, removed and later reinstalled crossing gates at approximately 600 locations as a precautionary measure ahead of Hurricane Irma; its insurers denied the resulting claim for the cost of these preventative measures.
- The trial court and initial appeal involved interpretation of whether the policy's provisions covering precautionary expenses and related lost revenue applied, and whether the applicable deductible was $750,000 or 5% of the value of the protected locations.
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Why it matters
This is a useful published decision for Florida first-party property practitioners handling hurricane 'loss avoidance' claims: it confirms that preventative expenses generally fall under protection-and-preservation… — full analysis with a trial
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