The Ninth Circuit recently decided that the insurer's reliance upon a non-existent policy limit referenced by an endorsement was not supportable. See Ferguson v. Coregis Ins. Co., No. 06-35867 (9th Cir. June 3, 2008).
The policy issued to Coeur d-Alene School District by Coregis referred in several places to the general liability limit of $2,000,000 per occurrence. An endorsement to the policy attempted to change the policy limit by referring to the limit of liability set forth in an Idaho statute. The statute stated every policy issued to a governmental entity shall have a policy limit of "not less than $500,000 for bodily or personal injury." The District Court granted summary judgment to Coregis, finding the policy limit was indeed $500,000.
The Ninth Circuit reversed. Although the policy's endorsement attempted to limit the liability as indicated in the statute, there was no such limit in the statute. Instead, the statute set a minimum dollar amount of coverage. The endorsement's reference to a non-existent standard rendered the endorsement uncertain and unenforceable.
