Oxford comma at center of multimillion dollar insurance suit
Is the use of Oxford commas necessary or are they a style choice deployed at the discretion of a contract's writer?
The U.S. District Court for the Southern District of Florida has ruled on the Oxford, or serial, comma, finding that a policy’s punctuation was not unclear and that a professional liability policy did not cover a multimillion dollar judgment resulting from a lawsuit.
Control Group, a management and financial consulting firm, and its accounting subsidiary, Constantin Associates, were insured by Chubb and Executive Risk for several years. In 2018, ECB USA and others sued Constantin Associates in Miami-Dade Circuit Court alleging wrongdoing in a professional audit.
In 2019, Constantin settled the lawsuit for $4.9 million, and assigned insurance rights to the plaintiffs. Chubb and ERI denied the claims for several reasons, one of which was that when Constantin’s and Control Group’s errors and omissions policy was renewed in 2017, the wording had changed and the policy no longer covered audit services done for non-financial firms. ECB USA, a Florida corporation, sued Chubb for relief associated with Chubb’s denial of insurance coverage, alleging breach of contract. The case was moved to federal court.
The policy included a clause that provided that coverage was for management consulting services, and those were defined as “services directed toward expertise in banking finance, accounting, risk and systems analysis, design and implementation, asset recovery and strategy planning for financial institutions.” The underlying lawsuit against Constantin did not involve a financial institution. Representation for Chubb argued that the clause meant that the policy covered only those services done for financial institutions. ECB disagreed, arguing that because the clause did not have a comma before the words “for financial institutions,” it meant that the policy was not limited only to work performed for financial institutions. According to the plaintiffs, the policy did cover other types of accounting, and audits are generally considered to be a part of accounting services.
ECB argued that the words “financial institutions” at the end of the sentence applied only to the words coming immediately before it, “asset recovery and strategy planning,” not the entire clause.
U.S. District Judge Robert Scola sided with Chubb on that and most other counts in the litigation. Judge Scole concluded that a plain reading of the policy “establishes that Chubb had no duty to defend or duty to indemnify in connection with the underlying litigation, as the services at issue in the underlying litigation were not provided to a financial institution, as required for coverage.”
Judge Scola found in favor of Chubb, citing a 1971 federal court decision that said that “while commas at the end of a series can avoid ambiguity, the use of such commas is discretionary.”
Insurance Coverage Law Center editor’s Note: Grammarians are in two camps when it comes to the Oxford comma, some argue that it adds clarity and others think it is outdated. As a personal fan of the Oxford comma, I do recognize that it is a grey area. What do you think? Is the Oxford comma necessary? Whether you vote for or against the Oxford comma, policy language must be clear. Ambiguities are always found in favor of the insured, so drafters need to be sure that the policy says exactly what they mean when it comes to coverage. This is not the first time the Oxford comma has appeared in a court case related to insurance. This serial comma case from Florida involving a rogue beach ball resulted in no duty for the insurer to defend, and this case out of Maine in 2017 involves a company that could have lost millions of dollars in a class action dispute due to the lack of an Oxford comma.
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