A Florida court ruling has reinforced insurers' ability to limit liability using policy exclusions, offering clarity for commercial underwriters facing violent incident claims.

On June 18, 2025, the state’s Third District Court of Appeal upheld First Community Insurance Company’s denial of coverage in a wrongful death lawsuit brought against its insured, Catalina West Homeowners Association, Inc. The case stemmed from a 2019 incident in which resident Daniel Macko was ambushed and fatally shot at his home in the gated Cutler Bay, Florida community.

First Community had issued Catalina West a businessowners policy for the relevant period. The insurer initially provided a defense under a reservation of rights but later sought a court ruling that it had no duty to defend or indemnify under the policy’s Physical and Sexual Abuse Exclusion.

The clause excludes coverage for “bodily injury”, “property damage”, “personal and advertising injury”, medical payments or any other damages directly or indirectly arising out of, or connected to, acts of physical abuse, molestation, or similar conduct. It also extends to allegations of negligent hiring, supervision, or failure to protect.

Catalina West argued the term “physical abuse” should apply only in contexts involving a relationship of trust or authority, and not to random criminal acts like Macko’s shooting. The court rejected that argument.

Writing for the majority, Judge Gooden said the exclusion’s plain language covers the shooting. The court found that an ambush and fatal shooting involved the kind of cruel and violent treatment the clause was intended to exclude. It also emphasized that courts cannot rewrite policy language to create coverage that doesn’t exist.

Because the exclusion applied, the court concluded First Community had no duty to defend the HOA or to indemnify it in the underlying lawsuit. The policy also required that covered injuries be caused by an “occurrence,” defined as an accident - something the court said clearly did not include an intentional shooting.

The ruling reinforces the weight of broadly worded exclusions in commercial policies, particularly for insurers underwriting risks tied to premises security and liability. It highlights how courts may interpret exclusions to apply even when third-party negligence is alleged.

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