A federal appeals court affirmed the dismissal of a lawsuit filed against Hartford Steam Boiler Inspection and Insurance Co. by a hydroponics company, ruling in part that it did not function as a direct insurer in its oversight of a claim dispute.
Sutersville, Pennsylvania-based Three Rivers Hydroponics LLC operated a hydroponic basil-farming greenhouse that used an ozone-based water sterilization system, according to the ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in Florists’ Mutual Insurance Co. and the Hartford Steam Boiler Inspection and Insurance Co.
Edwardsville, Illinois-based Florists’ insurance policy covered crop loss, which included an equipment breakdown endorsement that excluded loss because of design errors, poor workmanship, inherent and latent defects, and faulty materials. This equipment breakdown coverage was reinsured by Hartford Steam.
In July 2014, TRH filed an insurance claim with Florists’, reporting there was equipment damage to the ozone system, which resulted in crop loss. Florists’, which investigated the claim with HSB’s help, eventually denied coverage beyond replacing the ozone generator after receiving a report the loss was caused by an incorrectly installed pipe and was not covered under its policy.
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