The U.S. Fourth Circuit Court of Appeals held that a policy covering loss from “employee dishonesty” to be unambiguous and declined to construe the policy against the insurer. EMCOR Grp., Inc. v. Great Am. Ins. Co., 2016 WL 304106 (4th Cir. Jan. 26, 2016).The insured held consecutive commercial crime policies from different insurers for several years and sought recovery, under a 2004 policy, of a loss from fraudulent acts of its employees beginning in 1999, when a different insurer’s policy was in place.
The insured cited an endorsement in the 2004 policy providing coverage for losses discovered during the policy period but sustained “during the period of any prior insurance.” It argued that “any prior insurance” encompassed all of its prior policies, or, alternatively, that the phrase was ambiguous. The insurer denied the claim, citing a condition indicating that “any prior insurance” referred only to the immediately preceding policy, not to any policy ever issued previously.
The Fourth Circuit held that the endorsement unambiguously provided coverage only for losses incurred during the single preceding policy. Since the policy language was unambiguous, it refused to consider arguments regarding the general dictionary definitions of the policy’s terms, instead limiting its interpretation to the four corners of the policy.