Farm Family Casualty Insurance Company provides residential and household, building, farm personal property, and liability insurance. It offers insurance for horses, small farm operations, retail businesses, offices, apartments, and retail floral businesses. The company also provides coverage for various contracting trades, including carpentry, landscape gardening, painting, masonry, electrical services, and plumbing, as well as property protection, loss of income protection, and liability protection. In addition, it offers insurance for landscape gardening business and condominiums, as well as commercial and personal auto policies that provides property and liability coverage, medical payme...
344 Route 9W
Glenmont, NY 12077
Founded in 1955
The Massachusetts Appeals Court Vacates a Trial Court's Judgment in Favor of Farm Family Casualty Insurance Company
Nov 24 14
The Massachusetts Appeals Court vacated a trial court's judgment in favor of the insurer of an owner of a retail farm store that was damaged by fire, finding that the owner's cost of ordinary payroll could be included in calculating the loss of its business income. Verrill Farms L.L.C. suffered a fire loss to its farm store. Within two days of the fire, Verrill Farms reopened its business at alternate locations at reduced capacity. Within another month, the business resumed nearly full capacity in temporary facilities at nearby locations. After the fire and during the process of restarting the business at the alternate locations, no employees were laid off. All employees who remained on the payroll were involved in operations that allowed Verrill Farms to maintain its business and generate income. Verrill Farms submitted a claim under a business owners advantage insurance policy issued by Farm Family Casualty Insurance Co. for loss of business income, based on its loss of net income (net profit or loss) in the year after the fire, which it believed the policy covered under the loss of business income coverage. Farm Family paid a sum considerably less than the claim made by Verrill Farms, based on its interpretation of what expenses could be included in a calculation of net profit or loss in order to determine loss of business income under the policy. Verrill Farms sued Farm Family. Farm Family described the question as whether it had to 'pay' Verrill Farms for the cost of its ordinary payroll expense during the period of restoration, beyond the 60-day limit contained in the policy. The trial court declared Farm Family did not have to pay the cost of ordinary payroll beyond the 60-day limit and granted summary judgment in Farm Family's favor. The appeals court vacated the trial court's judgment and remanded the matter to the trial court for entry of a new judgment allowing Verrill Farms' motion for summary judgment. The sole question before the appeals court was whether the cost of ordinary payroll could be included in the calculation of net profit or loss in order to determine the loss of business income, when the business resumed operations at temporary locations during the restoration period. The appeals court concluded it could. Thus, under the factual circumstances of this case, loss of business income could only be determined by including the expense of ordinary payroll and other unreimbursed continuing expenses required by the resumption of Verrill Farms' operation in the calculation of net profit or loss.