Penford Corp. v. National Union Fire Insurance

**What Happened** Penford Corporation had business insurance policies with National Union Fire Insurance and Ace American Insurance. When Penford suffered flood damage, they filed a claim expecting full coverage for both their damaged property and lost business income while they were shut down. However, the insurance companies said the flood coverage had limits that applied to both types of losses combined, not separately. Penford disagreed and sued the insurers, claiming they breached their contract and acted in bad faith by not paying the full amount. **What the Court Decided** The court sided with the insurance companies. After reviewing the insurance policy language, the court found that the flood coverage limits applied to all flood-related losses together—both property damage and business interruption costs. The court granted summary judgment for the insurers, meaning Penford lost on all claims. **Why This Matters for Workers** This case shows how important it is to carefully read insurance policy details, especially regarding coverage limits. Workers should understand that insurance policies often have specific limits that may apply broadly across different types of losses, not just to individual categories. When reviewing any insurance benefits or coverage through employers, pay close attention to how limits are structured.