Present: All the Justices 

AUTUMN RIDGE, L.P., ET AL. 

v. Record No. 041934 OPINION BY JUSTICE CYNTHIA D. KINSER 

 June 9, 2005 

ACORDIA OF VIRGINIA INSURANCE AGENCY, 

INC. T/A ACORDIA OF VIRGINIA 

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 

A. Joseph Canada, Jr., Judge 

The appellants, 12 limited partnerships,1 brought this 

action against Acordia of Virginia Insurance Agency, Inc. 

t/a Acordia of Virginia (Acordia), under the Multiple 

Claimant Litigation Act, Code § 8.01-267.1 et seq. The 

limited partnerships asserted claims for negligence and 

breach of contract due to Acordia’s failure to include them 

as named insureds on a builders risk insurance policy and 

sought recovery of the premiums each limited partnership 

had paid.2

 The circuit court entered judgment for Acordia, 

finding that the limited partnerships “can show no damages 

for which they have not already been compensated.” We 

conclude, however, that, when no loss has occurred that 

 1

 The names of the 12 limited partnerships are: Autumn 

Ridge, L.P.; Bridgeport, L.P.; Culpepper Landing of SC, 

L.P.; Hampton Ridge, L.P.; Madison Ridge, L.P.; Woodbridge 

Partners, L.P.; Northwoods of SC, L.P.; Tierra Contenta II, 

L.P.; Salem Ridge, Limited Partnership; Sunchase of GA, 

L.P.; Tierra Contenta, Limited Partnership; and Woodburn, 

L.P. 

2

 The limited partnerships also asserted a claim for 

unjust enrichment but later nonsuited that claim. 
2

would have been covered by the requested insurance policy, 

the measure of damages for failure to procure insurance is 

the amount paid by the intended insured as the premium. 

Therefore, we will reverse the judgment of the circuit 

court. 

RELEVANT FACTS AND PROCEEDINGS 

The limited partnerships each owned a separate multifamily housing project. The projects were financed by 

proceeds realized from selling, on the open market, tax 

credits authorized by various state housing authorities. 

Because of the financing arrangement, each project was 

required to provide a “cost certification” to the 

respective state housing authorities, which included the 

costs of a builders risk insurance policy. 

National Housing Corporation (NHC) performed 

administrative tasks for the limited partnerships, 

including, among other things, procuring necessary 

insurance for them. In that regard, NHC contracted with 

Acordia, an insurance broker, to purchase a builders risk 

insurance policy to insure the 12 limited partnerships and 

each partnership’s respective housing project.3

 NHC did not 

 3

 Acordia also contracted to include in the builders 

risk insurance policy two other entities that are not 

parties to this action: Genito Glenn, L.P. and National 

Housing Building Corporation. See Acordia of Virginia Ins. 
3

own any of the housing projects but, as acknowledged by the 

parties, acted as the limited partnerships’ agent for the 

purpose of procuring the builders risk insurance policy at 

issue in this case. 

Acordia contracted with Security Insurance Company of 

Hartford (Security) to provide the requested insurance. 

The policy named NHC as the “insured” and listed the 

housing projects owned by the limited partnerships as 

“covered properties.” The policy, however, did not include 

the limited partnerships that actually owned the housing 

projects as “named insureds.” Acordia had no explanation 

why the limited partnerships were not included as named 

insureds on the policy and admitted that it had failed to 

comply with the applicable standard of care, or was 

negligent or in breach of its contract, by not including 

the limited partnerships as named insureds on the builders 

risk insurance policy. In addition, an adjuster for the 

company underwriting the builders risk insurance policy 

stated that the owners of the property and “the people 

. . . insured [under that policy] were different entities 

and, therefore, the owners of the property had no insurable 

 

Agency, Inc. v. Genito Glenn, L.P., 263 Va. 377, 380, 560 

S.E.2d 246, 247 (2002) and National Hous. Bldg. Corp. v. 

Acordia of Virginia Ins. Agency, Inc. 267 Va. 247, 249, 591 

S.E.2d 88, 89 (2004). 
4

interest under [the] policy.” When asked whether a claim 

would have been paid to NHC instead of the owners of the 

projects, knowing that NHC was not the owner, he responded, 

“Only in a mistake.” 

Acordia invoiced NHC for the total amount of the 

premium for the builders risk insurance policy. NHC paid 

that sum to Acordia, which then deducted its commission and 

forwarded the remainder of the premium to Security. Each 

limited partnership was supposed to reimburse NHC for its 

proportionate share of the premium, which was based on the 

estimated value of each partnership’s housing project at 

the time of completion.4

Prior to this action filed by the 12 limited 

partnerships, Genito Glenn, L.P. (Genito), Autumn Ridge, 

L.P. (Autumn Ridge), Sunchase of GA, L.P. (Sunchase) and 

Madison Ridge, L.P. (Madison Ridge) suffered losses at 

their respective housing projects. Security paid the 

losses at Autumn Ridge and Sunchase by issuing checks 

payable to NHC. Those checks listed NHC as the “assured.” 

A senior vice-president for Acordia admitted that Security 

 4

 When a housing project was completed, it was removed 

from the builders risk insurance policy by an endorsement. 

Because the premium was paid for an entire year in advance, 

the endorsements sometimes resulted in premium refunds, 

which Acordia credited to the account of the named insured, 

NHC. 
5

paid NHC because Security did not know at the time of 

payment that the limited partnerships even existed and that 

they were the owners of the housing projects. Security 

denied Madison Ridge’s claim because the loss was not a 

covered loss under the builders risk insurance policy. 

When Genito made a claim under the builders risk 

insurance policy, Security denied coverage on the ground 

that Genito was not a named insured under the policy.5 

Genito then filed an action against Acordia for its failure 

to include Genito as an insured on the builders risk 

insurance policy and successfully recovered economic loss 

damages for Acordia’s negligent performance of its 

contractual obligations. Acordia of Virginia Ins. Agency, 

Inc. v. Genito Glenn, L.P., 263 Va. 277, 380-81, 560 S.E.2d 

246, 247 (2002). 

 When the 12 limited partnerships discovered that they 

were not listed as named insureds on the builders risk 

insurance policy for which they claimed to have paid 

premiums, they filed this action against Acordia. After 

hearing evidence ore tenus, the circuit court concluded in 

a letter opinion, which was incorporated into its final 

 5

 In a declaratory judgment action, a federal district 

court held that Genito was not a named insured under the 

builders risk insurance policy. Genito Glenn, L.P. v. 

Security Ins. Co. of Hartford, No. 2:98cv1314 (E.D. Va. 

Oct. 27, 1999). 
6

order, that the “[limited partnerships’] damages in 

contract [were] limited to [their] losses due to the breach 

. . . [and they] simply already [had] been restored to the 

condition in which they would have been had the contract 

been performed as promised” due to Security’s payment of 

the claims made for losses at the housing projects owned by 

Autumn Ridge and Sunchase as well as the judgment in favor 

of Genito against Acordia. Relying on Link Associates v. 

Jefferson Standard Life Insurance Company, 223 Va. 479, 291 

S.E.2d 212 (1982), the court reasoned that “[w]hen [Genito] 

chose to pursue recovery for the amount of its denied 

claim, it foreclosed NHC’s option of recovering the 

consideration it paid for the benefits under the builder’s 

risk policy.” In the circuit court’s view, the limited 

partnerships had accepted the benefits of the builders risk 

insurance policy “by their acceptance of, and successful 

action at law for, amounts equal to benefits they would 

have received under a valid policy.” 

The circuit court also concluded that the measure of 

damages for a breach of contract to procure insurance is 

the amount of loss that would have been subject to 

insurance coverage and not the return of paid premiums. 

The circuit court rejected the holding in Ingrams v. Mutual 

Assurance Society, 40 Va. (1 Rob.) 661, 668 (1843), 
7

because, in the court’s view, a subsequent case, Virginia 

First Savings & Loan Association v. Wells, 224 Va. 691, 

695, 299 S.E.2d 370, 372 (1983), superseded the 

precedential value of Ingrams. We awarded the 12 limited 

partnerships this appeal. 

ANALYSIS 

 The limited partnerships assert several assignments of 

error. The overriding question, however, is whether the 

circuit court erred in concluding that the 12 limited 

partnerships are not entitled to a return of the premiums 

they claimed to have paid for the builders risk insurance 

policy as damages for Acordia’s admitted breach of contract 

and/or negligence in failing to procure insurance coverage. 

To decide that question, we apply certain legal principles 

regarding contracts of insurance. 

 A contract of insurance is “‘[a]n agreement by which 

one party for a consideration (which is usually paid in 

money, either in one sum, or at different times during the 

continuance of the risk), promises to make a certain 

payment of money upon the destruction or injury of 

something in which the other party has an interest.’” 

Cosmopolitan Life Ins. Co. v. Koegel, 104 Va. 619, 624, 52 

S.E. 166, 168 (1905); accord Sims v. Commonwealth, 71 S.W. 

929, 929 (Ky. 1903); Commonwealth v. Wetherbee, 105 Mass. 
8

149, 160 (1870). The risk undertaken by the insurer is an 

essential element of a contract of insurance, and no 

premium is due from the insured unless the risk attaches. 

Smithart v. John Hancock Mut. Life Ins. Co., 71 S.W.2d 

1059, 1062 (Tenn. 1934); Huntington Ins. Agency v. County 

Court of Wyoming County, 127 S.E. 64, 65 (W. Va. 1925). 

Likewise, if, through no fault or fraud by the insured, the 

risk never attaches under a policy of insurance, the 

insurer must return any premium paid by the insured. 

Kansas City Col. of Osteopathic Med. v. Employers’ Surplus 

Lines Ins. Co., 581 F.2d 299, 301-02 (1st Cir. 1978); Tyler 

v. Capitol Indem. Ins. Co., 110 A.2d 528, 531-32 (Md. 

1955); Parsons, Rich & Co. v. Lane, 106 N.W. 485, 494 

(Minn. 1906); Latta v. Farmers County Mut. Fire Ins. Co., 

313 S.E.2d 214, 215 (N.C. Ct. App. 1984); see Young Am., 

Inc. v. Union Cent. Life Ins. Co., 101 F.3d 546, 548 (8th 

Cir. 1996) (employer entitled to refund of premiums paid 

under mistaken belief that corporate officers were eligible 

insureds). 

 Clearly, a risk never attached as to each of the 12 

limited partnerships because they were not included as 

named insureds on the builders risk insurance policy. See

Busby v. Simmons, 406 S.E.2d 628, 630 (N.C. Ct. App. 1991) 

(the term “ ‘[n]amed insured’ has a common sense and 
9

explicit meaning[;] [i]t is the named individual (or 

corporation) on the declarations page of the policy”). 

Indeed, Security denied Genito’s claim because it was not a 

named insured. Acordia, 263 Va. at 381, 560 S.E.2d at 248. 

Also, the adjuster for the company underwriting the 

builders risk insurance policy testified that the owners of 

the housing projects “had no insurable interest under [the] 

policy” as issued. Contrary to Acordia’s argument, failure 

to include the limited partnerships as named insureds on 

the policy was not merely a defect in the coverage or terms 

of the policy. It was tantamount to no coverage for the 

limited partnerships, i.e., no contract of insurance. See

Acordia, 263 Va. at 390, 560 S.E.2d at 253 (Acordia could 

not rely on the terms of the builders risk insurance policy 

that did not include Genito as a named insured). Despite 

the fact that the risk did not attach, the circuit court 

concluded that the limited partnerships’ measure of damages 

was the amount of any losses that would have been subject 

to insurance and not a return of premiums. We do not 

agree. 

 In Ingrams, this Court stated the following 

principles: 

[I]f through mistake, misinformation, or any 

other innocent cause, an insurance be made 

without any interest whatsoever in the thing 
10

insured, . . . the insurer shall return the whole 

premium . . . . For the premium paid by the 

insured, and the risk which the insurer takes 

upon himself, are considerations each for the 

other; they are correlatives, whose mutual 

operation constitutes the essence of the contract 

of insurance. The insurer shall not be exposed 

to the risk without receiving the premium; nor 

shall he retain the premium, which was the price 

of the risk, if in fact he runs no risk at all, 

though it be by the neglect, or even the fault of 

the party insuring, that the risk be not run. 

40 Va. at 668; see also Mutual Life Ins. Co. of New York v. 

Brown, 137 Va. 278, 283-84, 293, 119 S.E. 142, 144, 147 

(1923) (approving trial court’s decision to return premiums 

to insured after insurance company cancelled policy). 

 These principles are still valid in Virginia and were 

not altered by this Court’s decision in Wells. There, a 

mortgage lender had contracted to procure credit life 

insurance for a borrower. 224 Va. at 692, 299 S.E.2d at 

370. The administratrix of the borrower’s estate sued the 

lender for breach of that contract because the lender never 

forwarded the borrower’s application to an insurance 

company even though the lender collected premiums for the 

insurance. Id. at 692-93, 299 S.E.2d at 370-71. On 

appeal, the issue was whether the trial court erred by 

placing on the lender the burden of proving that the 

borrower was uninsurable at the time he applied for the 

credit life insurance. Id. at 694, 299 S.E.2d at 371. The 
11

parties agreed that the balance of the borrower’s loan 

would be the measure of damages if the administratrix was 

entitled to recover. Id. at 693-94, 299 S.E.2d at 371. It 

was in that context that we stated, “where a contract to 

procure insurance is breached, the measure of damages is 

the amount of loss which would have been subject to 

insurance, not the amount of insurance applied for.” Id.

at 695, 299 S.E.2d at 372. There was no issue in Wells as 

to the measure of damages for breach of a contract to 

procure insurance when the intended insured has not 

suffered an actual loss that would have been covered by the 

insurance. 

 Thus, we hold that, when the intended insured suffers 

a loss, the measure of damages for failure to procure 

insurance is the amount that would have been due under the 

policy. However, when no loss has occurred, the measure of 

damages is the amount paid by the intended insured as the 

premium.6

 Enyart v. Transamerica Ins. Co., 985 P.2d 556, 

 6

 In support of its argument that the measure of 

damages for failure to procure insurance is the amount the 

insurer would have paid if the requested insurance had been 

obtained, Acordia cited Wheaton Nat’l Bank v. Dudek, 376 

N.E.2d 633, 636 (Ill. App. Ct. 1978); Kenyon v. Larsen, 286 

N.W.2d 759, 764 (Neb. 1980); and Kobbeman v. Oleson, 574 

N.W.2d 633, 635 (S.D. 1998). In each of those cases, the 

insured had suffered an actual loss. Thus, we agree that 

the proper measure of damages in those cases was the amount 
12

560-61 (Ariz. Ct. App. 1998); Everett v. O’Leary, 95 N.W. 

901, 902 (Minn. 1903); Simpson v. M-P Enters., Inc., 252 

So.2d 202, 207 (Miss. 1971). “In case of a failure to 

issue a policy, the right to recover is fully matured when 

the agreement is violated, and the party to whom it was to 

be issued is not obliged to wait until his property is 

destroyed . . . before instituting an action for damages.” 

Everett, 95 N.W. at 902. 

 We recognize that, in this case, the 12 limited 

partnerships seek a return of paid premiums not from the 

insurer, Security, but from Acordia. That distinction does 

not change the applicable measure of damages. The cause of 

action here arose out of a contract to procure insurance 

and Acordia’s admitted negligence and/or breach of that 

contract by failing to include the limited partnerships as 

named insureds on the builders risk insurance policy. 

 The circuit court further erred in concluding that the 

limited partnerships failed to prove that they had suffered 

any damages for which they had not been compensated. 

Because of the payments for losses at Autumn Ridge’s and 

Sunchase’s respective housing projects, and the judgment 

recovered by Genito against Acordia, the court mistakenly 

 

that would have been due under the respective insurance 

policies. 
13

believed that the limited partnerships had been restored to 

the condition in which they would have been if Acordia had 

procured insurance listing the limited partnerships as 

named insureds. Thus, the circuit court concluded that the 

limited partnerships “should be deemed to have accepted the 

benefits of the insurance contract to procure insurance by 

their acceptance of, and successful action at law for, 

amounts equal to benefits they would have received under a 

valid policy.” 

 The court apparently reached this conclusion by 

characterizing the limited partnerships as subsidiaries of 

NHC. The limited partnerships, however, were not 

subsidiaries of NHC; instead, they were separate, 

independent entities, each owning a different housing 

project. As acknowledged by the limited partnerships in 

their pleadings and by Acordia at oral argument, NHC acted 

as the limited partnerships’ agent for the purpose of 

procuring the builders risk insurance policy.7

 See Acordia, 

 7

 Acordia argued on brief that the limited 

partnerships cannot claim privity of contract with Acordia 

and that each can assert a claim against Acordia only as a 

third-party beneficiary of NHC’s contract with Acordia to 

procure the builders risk insurance policy. Acordia, 

however, acknowledged during oral argument that its 

argument on this point was misplaced in light of this 

Court’s decision in Acordia, 263 Va. at 386, 560 S.E.2d at 

251, holding that, “when NHC, acting as Genito’s agent, 

contracted with Acordia for insurance . . . , Genito then 
14

263 Va. at 386, 560 S.E.2d at 251. Even if the limited 

partnerships were subsidiaries of NHC, that status alone 

would not warrant the circuit court’s conclusion that the 

limited partnerships had been restored to the position in 

which they would have been if Acordia had fulfilled the 

contract to procure a builders risk insurance policy as 

promised. See Richfood, Inc. v. Jennings, 255 Va. 588, 

592-93, 499 S.E.2d 272, 276 (1998) (a subsidiary is a 

separate corporate entity and that status alone is not a 

justification for a court to disregard the separate 

corporate structure). 

 The situation here is not analogous to that in Link 

Associates, a case relied on by the circuit court. There, 

the controversy involved the financing of a shopping-center 

development and a lender’s commitment for a permanent loan 

in an amount less than what the borrower had requested. 

223 Va. at 481, 291 S.E.2d at 213. Asserting mutual 

mistake and constructive fraud, the borrower sought to 

reform the contract by rescinding certain portions of 

 

became a contracting party with Acordia, thereby 

establishing privity between those two entities.” Thus, we 

do not address Acordia’s argument regarding third-party 

beneficiaries. 

Acordia also argued that NHC had an insurable interest 

in the various housing projects owned by the limited 

partnerships and that Security undertook a risk as to NHC. 

That issue is not before us in this appeal, and we will 

therefore not address it. 
15

ground leases executed by the borrower as security for the 

permanent financing. Id. The issue decided on appeal was 

whether the trial court had erred in finding that the 

borrower had waived and ratified certain misrepresentations 

made by the lender. Id. at 484, 291 S.E.2d at 215. 

Finding that there was sufficient evidence to prove that 

the borrower had waived and ratified any actionable 

misrepresentations of the lender, we stated with approval 

the principle that a party cannot accept the benefits of a 

contract and then seek to be relieved of its obligations. 

Id. at 488-89, 291 S.E.2d at 218 (citing United States v. 

Idlewild Pharmacy, Inc., 308 F. Supp. 19, 23 (E.D. Va. 

1969)). 

 In the present case, there was no contract of 

insurance that provided coverage to the limited 

partnerships; thus, there was no contract from which they 

could accept benefits. Cf. Jones v. New York Life Ins. 

Co., 253 P. 200, 203 (Utah 1926) (the theory of waiver of 

the terms of a contract presupposes the existence of a 

valid contract). Furthermore, if Acordia had fulfilled its 

contractual obligation to procure a builders risk insurance 

policy naming the 12 limited partnerships as insureds, each 

limited partnership would have its own claim for any loss 

sustained at its respective housing project. Any recovery 
16

by a particular limited partnership would not have affected 

the right of another limited partnership to recover fully 

for a loss at a different housing project. In other words, 

the circuit court had no basis to foreclose the limited 

partnerships from pursuing damages by attributing the 

recoveries by Genito, Autumn Ridge, and Sunchase to the 

other limited partnerships. 

 The final issue is whether Autumn Ridge and Sunchase 

are entitled to a return of premiums since Security paid 

for losses sustained at their respective housing projects. 

Acordia argued that these two limited partnerships accepted 

the benefit that would have been afforded if they had been 

listed as named insureds on the builders risk insurance 

policy and cannot now recover premiums on the basis that 

the risk never attached. We disagree. 

 As we previously stated, there was no contract of 

insurance as to any of these limited partnerships. Thus, 

Autumn Ridge and Sunchase cannot be deemed to have accepted 

the benefit of insurance or to have waived the failure of 

Acordia to include them as named insureds on the builders 

risk insurance policy. See Silva v. National Am. Life Ins. 

Co. of California, 58 Cal. App. 3d 609, 618 (Cal. Ct. App. 

1976) (waiver presupposes the existence of a valid 
17

contract); Hodge v. National Fid. Ins. Co., 68 S.E.2d 636, 

640 (S.C. 1952) (same); Jones, 253 P. at 203 (same). 

 However, Autumn Ridge and Sunchase acknowledged on 

brief that the amount paid by Security for their respective 

losses should be deducted from the amount of premium each 

paid. Thus, they should recover only the net amount from 

Acordia as damages. 

CONCLUSION 

 For these reasons, we will reverse the judgment of the 

circuit court and remand this case for a determination of 

the amount of damages which may be due the limited 

partnerships. 

Reversed and remanded.