When a catastrophe occurs and a golf course sustains direct physical loss or damage, there may also be an associated loss of use and interruption to its business. As with any loss, when analyzing coverage, the first thing is to make sure that the property is listed as a covered premises in the policy.
The Ormond Country Club filed suit against its insurer seeking damages in the amount of $200,000 for the loss of income it sustained when Hurricane Katrina caused damage to the golf course.
The insured’s policy stated that the suspension of operations must have been caused by “direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Limit of insurance is shown in the Declaration.”
The Coverage Schedule in the Declarations extended business income coverage to the club house, storage building, poolside cabana, pumphouse, and two course shelters, but not the golf course.
The Eastern District of Louisiana district court granted partial summary judgment in favor of the insurer and dismissed the claim for business income damages attributable to closure of the golf course:1
The golf course is not listed in the policy declarations. Thus, damages to the golf course are not covered. Halpern v. Lexington Ins. Co., 558 F.Supp. 1280 (E.D.La.), aff’d, 715 F.2d 191 (5th Cir.1983)(building not listed in the declarations not covered); In re McDermott, 875 So.2d 863 (La.App.4th Cir.2004)(personal property not shown on declarations page not covered); Soundview Associates v. New Hampshire Ins. Co., 215 A.D.2d 370, 625 N.Y.S.2d 659 (1995)(golf course not listed in the declarations pages of policy not covered).
The court indicated that the golf course was also excluded from coverage,
[B]ecause elsewhere, the policy unambiguously states that ‘Covered property does not include … [l]and (including land on which the property is located) … or lawns.’
For golf course or country club owners, this decision serves as an important lesson to make sure that the golf course is listed on the declarations page of the policy, or that the policy does not contain a similar definition of covered property as stated above, to avoid the same outcome that occurred in this case.
1 Ormond Country Club v. James River Ins. Co., No. CIV.A. 06-11376, 2008 WL 859482 (E.D. La. Mar. 27, 2008).