Last week, the Oregon Court of Appeals issued an opinion that turns logic and fairness upside down. In Deardorff v. Farnsworth (Feb. 4, 2015), the insured, a horse stable, had purchased a “Business and Commercial Farm” policy from Oregon Mutual Insurance Co. (“OMI”). Because the stable was responsible for other people’s horses, the stable asked its insurance broker whether the policy included liability coverage for damages to “CCC” property; that is, the horses under the insured’s care, custody, or control. The insurer responded to the broker’s question that this coverage was included. Based on this unambiguous representation by the insurer, the insured did not purchase a stand-alone policy to protect itself from potential lawsuits by owners of horses that were hurt while in the stable’s care.
You can see where this is going.