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Third Party Insurance Only Protects Damage to Other than the Insured  

Finger Oil &Gas, Inc. ("Finger Oil"), the insured, and Mid-Continent  Casualty Company ("Mid-Continent") disputed coverage and the magistrate  judge granted Mid-Continent\'s motion for summary judgment, and Finger  Oil appealed the dismissal of its misrepresentation and breach of  contract claims.  

In Finger Oil & Gas, Incorporated v. Mid-Continent Casualty Company,  No. 22-50432, United States Court of Appeals, Fifth Circuit (January  27, 2023) Finger Oil demanded coverage to its property because it was  told it had coverage for damage to third parties. The Fifth Circuit  resolved the dispute.  FACTS  Finger Oil is an insured under a policy issued by Mid-Continent, which  provides general liability insurance. Because Scrimger was unfamiliar  with the policy, she reached out to an underwriter at Mid-Continent  requesting that it "confirm that this insured has Blow Out and Cratering  coverage and advise the limit." Mid-Continent\'s underwriter replied in  an email stating: \\u201cThe policy ML1419 Oil & Gas Endorsement IV  Blow-Out and Cratering has a box to X if the coverage is excluded. The  ML1419 for this policy is not X\'d. ...\\u201d  Based on this response, Scrimger emailed Finger Oil as follows: \\u201cPer the  underwriter regarding coverage, the Blowout and Cratering are included  within the limit of insurance. Limits are $1M occurrence/$2M aggregate.  Please note that each claim is based on its own merit and this is just  verifying the coverage in place.\\u201d  Finger Oil, without reading the policy or seeking advice interpreting  the coverage, relying on Scrimger\'s email as confirmation that it was  covered for the incident, hired several contractors to work on the well  and incurred bills for these services in the amount of $641,590.90.  

THE CLAIM DENIAL

Mid-Continent subsequently denied Finger Oil\'s insurance claim, which  was for expenses incurred while repairing property from the well blow  out and the costs to bring the well under control. Mid-Continent  determined that there was no coverage under the policy for these damages  based on two exclusions. First, Mid-Continent stated that the policy  included an exclusion for damage to property owned by the insured which  excluded from coverage "property damage" to: \\u201cProperty you own, rent, or  occupy, ...\\u201d  

The policy also excluded "any loss, cost or expense incurred by you or  at your request or by or at the request of any \\u2018Co-owner of the Working  Interest\\u2019 in connection with controlling or bringing under control any  oil, gas, or water well.\\u201d  DISCUSSION The Fifth Circuit agreed with the Magistrate that MidContinent\'s  statement that blow out coverage existed did not amount to an actionable  misrepresentation. Finger Oil\'s agent asked MidContinent whether it had  blow out and cratering coverage, to which MidContinent correctly  replied that it did. MidContinent\'s statement was more akin to a general  statement that the policy included such coverage, rather than it was to  a misrepresentation of specific policy terms. Indeed, Finger Oil was  warned in the same email to "[p]lease note that each claim is based on  its own merit and" that the statement was "just verifying the coverage  in place." The summary judgment evidence, therefore, did not support  Finger Oil\'s misrepresentation claims.