Can the Insured Claim Compensation for Damages Due to Wrong Product Delivered by Him ?
In Florida Farm Bureau Mutual Insurance Co. v. Gaskins, 405 So. 2d 1013 (Fla. 1st DCA 1981), the insured, a chemical supply retail distributor, delivered an herbicide to a customer who had ordered an insecticide. 405 So. 2d at 1013-14.
Thinking it was an insecticide, the customer unwittingly sprayed his tobacco crop with the herbicide. Id. When the customer lost his entire crop, he sued the distributor. Id.
The distributor settled the claim and sought indemnity from the insurer. Id.
The insurer argued that the claims were excluded under the policy's "products hazards" and "completed operations" exclusions. Id. at 1014.
The Court phrased the issue as whether the distributor's liability "arose out of the products sold and/or after it had completed operations away from the store premises as defined in the policy's products hazards and completed operations exclusions." Id.
The Court found the policy language unambiguous and concluded that the exclusions did not apply because liability arose out of the distributor's on-premises negligence in delivering the wrong product to the customer and "not out of the product delivered." Id.
The Court focused on proximate cause, stating that the herbicide was not the cause of the damage, but "merely the incidental instrumentality through which the damage was done." Id. at 1015.