A Louisiana federal court judge erred in ruling that a standard insurance policy exclusion for water and flooding damage did not apply where levee breaches from Hurricane Katrina were involved, insurance trade groups said in papers filed with an appeals court.

In an amicus brief submitted to the Fifth Circuit Court of Appeals in New Orleans, insurance industry groups argued that the lower court failed to apply the "plain language" of the water exclusion developed by the Insurance Services Office and used in insurance contracts.

New Orleans U.S. District Court Judge Stanwood R. Duval ruled last year that language in policies issued by ISO, Allstate and other carriers does not "exclude water damage caused by negligent or intentional acts of man. It does not address the ambiguity of the term 'flood' and the fact that all of the listed 'causes' appear to be the result of natural occurrences, not the monumental civil engineering debacle that is alleged by plaintiffs."