(USA Herald) -- This is the case of Mitchellville Plaza Bar LP v. The Hanover American Insurance Co., in the U.S. Court of Appeals for the Fourth Circuit.

An insurance dispute between Hanover American Insurance and Maryland strip mall owner, Mitchellville Plaza Bar LP, has reached the US Court of Appeals for the Fourth Circuit.

Hanover has urged the court to affirm its victory in the coverage dispute, stating that the roof damage sustained by the strip mall is excluded from coverage because it was caused by a turkey vulture infestation.

In its response brief, Hanover also maintained that it did not act in bad faith when denying coverage to Mitchellville Plaza, as its decision was based on a thorough investigation that provided a reasonable basis for denial.

The insurer had insured the strip mall under an all-risk property insurance policy with a coverage limit of $50.6 million for damage to covered property. Mitchellville Plaza filed a lawsuit against Hanover in January 2021, alleging breach of contract and bad faith.

The mall owner claimed that Hanover wrongly denied coverage for its roof damage claim, stating that the damage was caused by turkey vulture nesting behavior or infestation.

The district court ruled in favor of Hanover in September. Mitchellville Plaza has appealed the decision, arguing that the lower court incorrectly ruled that the damage was caused by a turkey vulture infestation and therefore excluded from coverage.

Hanover has countered that the policy exclusion for nesting, infestation, or discharge of waste by birds applies, as the turkey vultures present on the property caused harm and damage in large enough numbers to be considered an infestation.

The insurer also stated that the term "infestation" is not ambiguous and the mall owner has failed to demonstrate that there is more than one reasonable interpretation of the term.

As the case proceeds, it will be important for the court to consider the specific language of the policy at issue and how it relates to the circumstances of the damage sustained by the strip mall.

While policy exclusions can serve as a useful means for insurers to limit their liability and manage risk, they can also be a source of confusion and disagreement between policyholders and insurers.

In this case, both parties have put forth strong arguments for their positions, and it will be up to the court to determine the merits of each argument and how the policy exclusion at issue should be interpreted.

Regardless of the outcome, it is likely that the case will serve as a cautionary tale for both policyholders and insurers to carefully review and understand the terms of their insurance policies to avoid potential disputes.