A fire at a Key West resort recently produced an important lesson about civil authority coverage, scheduled properties, and how the definition of “described premises” can make hundreds of thousands of dollars in business income coverage disappear.
Rockwell Property operated the Equator Resort across five separately scheduled buildings. On February 26, 2022, a fire damaged the resort’s laundry and pool bar building. The other four buildings escaped direct fire damage, but the Key West Fire Department shut off electricity to the entire resort. Power was eventually restored, and the resort was declared safe to reopen on March 2.
Century Surety acknowledged coverage for the damaged building. It paid $207,803 for the building, $20,000 for business personal property, $25,000 for business income and extra expense, and another $8,619.19 for debris removal. Rockwell claimed substantially greater business income losses resulting from the shutdown of the entire resort.
To many, this may sound like a classic civil authority claim. Unfortunately, civil authority coverage often works like a combination lock. Getting most of the numbers right does not open the door. As we previously warned in The Nuances of Civil Authority Coverage – Understanding Business Interruption Claims, this coverage can resemble playing the lottery: if all of the required numbers do not match, the policyholder loses.
The policy provided civil authority coverage when a covered cause of loss damaged property “other than property at the described premises” and an action of civil authority prohibited access to the described premises. The fight was over what constituted the “described premises.”
Rockwell argued that the five buildings were separately scheduled, had separate coverage limits, and should be treated as separate premises. Under that reading, the fire-damaged laundry building was “other property” in relation to the four undamaged buildings. When the fire department shut down electricity throughout the resort, Rockwell contended that the civil authority provision covered the resulting business income losses at those other buildings.
The federal district court granted summary judgment to Century. 1 It first found that the policy was scheduled rather than blanket coverage, meaning each building had separate limits and had to qualify separately for coverage. The court then focused on the absence of direct physical damage to the other four buildings and concluded that Rockwell could not recover business income losses for them.
The appellate court affirmed, 2 but it took a more direct, textually convincing route. The Eleventh Circuit held that all five resort buildings collectively constituted the “described premises.” Although each building had separate coverage limits, the declarations listed all five buildings together in the policy’s “Description of Premises” schedule. Separate limits did not transform each building into an independent described premises for purposes of the civil authority provision.
The fire therefore occurred within the described premises, not at property other than the described premises. That ended the coverage analysis. The court did not need to decide whether shutting off electricity prohibited access, whether the claimed losses satisfied the timing requirements, or whether Rockwell could prove the amount of its business income loss. Same judgment, but a different coverage analysis.
In an accidental bit of insurance poetry, the appellate opinion once refers to the buildings as the “described promises” rather than the “described premises.” The typo is almost too appropriate. Rockwell believed the separately scheduled buildings carried a promise of separate treatment. The court found otherwise.
This decision also shows why the words “scheduled” and “blanket” do not answer every coverage question. A policy can treat buildings separately when applying limits but collectively when deciding whether a coverage extension is triggered. In practical terms, the insurer may treat five buildings as five for purposes of limiting payment and as one for purposes of defeating civil authority coverage.
Commercial policyholders with campuses, resorts, condominium complexes, shopping centers, manufacturing facilities, and multiple buildings at a single location should pay close attention to this issue before a loss occurs. The declarations, statement of values, location schedule, business income forms, and definitions of “premises” must be read together. Separate addresses and separate limits do not necessarily mean separate premises under every provision.
The important question is not simply, “How much business income coverage do we have?” It is also, “What happens if damage to one scheduled building forces a complete shutdown of all properties or if the government closes all the others?” If the policy does not answer that question the way the policyholder expects, the time to correct it is during placement and not after the fire department turns off the lights.
Thought For The Day
“I went down to Key West because I love swimming . . . and I was immediately enchanted by the place.”
—Tennessee Williams
1 Rockwell Prop., Inc. v. Century Surety Co., No. 4:23-cv-10083 (S.D. Fla. Aug. 22, 2024).
2 Rockwell Prop., Inc. v. Century Surety Co., No. 25-10965, 2026 WL 2430618 (11th Cir. Aug. 19, 2026).
