Archives: Insurance Coverage

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Failure to Disclose Loss History Results in Rescission

When a policyholder, particularly a commercial policyholder, applies for insurance coverage, a key part of the application process is the disclosure of the policyholder’s relevant loss history. When an insurance company receives an application for insurance, that loss history is a critical part of the insurer’s underwriting process to determine whether it is willing to write … Continue Reading

Replacing a Roof Is Not Demolition

Many liability insurance policies exclude coverage for bodily injury or property damage arising out of structural alterations that involve changing the size of or moving buildings or other structures, new construction or demolition operations performed by or on behalf of the named insured. Construction insurance policies typically cover these risks, not general liability policies. A … Continue Reading

How To Void an Insurance Claim By Really Trying

Nearly every insurance policy has a clause that requires the insured to cooperate with the insurer in the investigation of the claim. Most insurance policies also provide that the insured should do everything necessary to secure, and do nothing to impair, the insurer’s subrogation rights. This is especially important when property damage is alleged. These … Continue Reading

Duty to Defend Does Not Extend to Claim Where No Suit Is Filed

Case law in nearly every state provides that the duty to defend is broader than the duty to indemnify. Typically courts look to the allegations in the complaint and compare those allegations to the coverage grants in the policy to determine if the allegations are sufficient to bring the claim within the possibility of coverage … Continue Reading

Florida Property Insurers Must Pay All Losses If Any “Concurrent Cause” Is Covered

In the latest of a string of recent decisions adverse to insurers, the Florida Supreme Court held that, where a residential property incurs damage due to the cumulative or combined effects of multiple “concurrent” causes, any of which a homeowners policy covers, the insurer must pay the entire loss even if its policy expressly excludes … Continue Reading

Insurance Archaeology and the London Market

Long-tail coverage disputes often involve multiple policies issued over multiple policy periods over multiple layers of insurance. Sometimes the potential relevant policies go back decades or more. Locating these ancient policies is an enormous task. Locating the placing, underwriting and claims files that go along with these policies is even more difficult. Compound all of … Continue Reading

Contractual Privity and Reinsurance

In most jurisdictions a policyholder cannot bring a direct action against a reinsurer because of the lack of contractual privity. Yes, there are some quirky statutes and jurisdictions that allow a direct right of action under certain circumstances, but the general rule is that where there is no contractual relationship between the reinsurer and the … Continue Reading

Disclaimers and Late Notice When to Raise and When Waived

When an insurance company decides to disclaim coverage it has to be very careful about timing the notice and the substance of the disclaimer. Courts have been generally strict in finding that a carrier’s failure to specify a ground for disclaimer precludes the carrier from raising that ground subsequently as an affirmative defense in a coverage action. … Continue Reading

Additional Insured By Written Contract Clause Construed to Bar Coverage

Commercial construction projects necessarily involve many moving parts, including multiple parties from the owners to the construction managers to the project financiers to the contractors and to the sub-contractors. These moving parts generally result in a web of interrelated insurance policies covering the project. Typically, when there is no controlled insurance program, contractors and sub-contractors … Continue Reading

Delaware Supreme Court Clarifies New York’s Injury-in-Fact Trigger of Coverage for Asbestos Losses

Whether coverage for asbestos personal injuries is triggered under an injury-in-fact theory or under an exposure theory makes a world of difference to which insurance policies must respond to the asbestos losses. Asbestos, as we know, causes asbestos-related diseases that often manifest 20 or 30-years after the initial significant exposure to asbestos fibers. Most experts … Continue Reading

The Distinction Between the Duty to Pay Defense Costs and the Duty to Indemnify Defense Costs

Common forms of commercial general liability policies typically include provisions requiring the insurer to defend the insured regardless of whether the claim is valid or not, as long as the claim is within the coverage grant of the insurance policy. The typical language provides that the insurance company has the right and duty to defend … Continue Reading

New York Appeals Court Holds No Allocation of Environmental Losses to Insurers for Uninsured Years

In a case of first impression, a New York intermediate appellate court has held that the policyholder, rather than existing insurers, must be allocated  environmental cleanup costs for periods of time when environmental cleanup insurance was not available in the marketplace. The decision reverses the denial of the insurer’s partial motion for summary judgment.… Continue Reading

Second Circuit Gives Amtrak a Possible Second Chance for Sandy Relief

Natural catastrophes have wide-ranging consequences and obtaining insurance coverage for alleged damages arising from natural catastrophes takes time. There are still Katrina cases percolating through the legal system.  In this case, decided by the Second Circuit on the last day of August 2016, nearly four years after Sandy, issues concerning flood sublimits, ensuing loss exceptions … Continue Reading

In California, Excess Insurer Can Sue Primary for Failure to Settle Within Limits in Absence of Judgment

Recently, in ACE American Ins. Co. v. Fireman’s Fund Ins. Co., 16 C.D.O.S. 8430, the California Court of Appeal (Second District) addressed a split between divisions of that district regarding whether, as a matter of law, an excess insurer could sue a primary for subrogation where a settlement within primary limits was rejected and the … Continue Reading

Application of the Professional Services Exclusion in Directors and Officers Policies

Most significant insureds that provide services purchase both directors and officers liability insurance (“D&O”) and errors and omissions insurance (“E&O”). When the services provided are that of a stock exchange, claims by investors against the exchange for wrongful acts concerning the listing of a security may implicate both types of coverage. In a recent case, … Continue Reading

Could the Insurance Act 2015 Lead to an Increase In Insurance Disputes?

In my last blog post, I looked in overview at the Insurance Act 2015 (the “Act“), which comes into force in England and Wales on 12 August 2016 and revolutionises insurance contract law. This post looks at the potential for disputes arising from the new provisions of the Act, and how insurers could look to manage … Continue Reading

Is a Reinsurance Contract an Insurance Contract for Discovery Purposes?

Litigators know that in federal court initial disclosures are required. Under FRCP 26(a)(1)(A)(iv), parties must provide to the other side for inspection and copying “any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made … Continue Reading

New York Court of Appeals Reaffirms Contract Language Controls Allocation and Exhaustion Methodologies

Long-tail claims from asbestos and other toxic exposures have plagued policyholders and their insurers for decades. Myriad issues arise when trying to determine when injuries are incurred, how policies are triggered, how liability should be allocated among multiple policies and when excess policies are required to cover the losses. None of this is easy and … Continue Reading

New York Appellate Court Affirms Denial of Coverage Under Blanket Ordinance or Law Coverage Endorsement

When a building is damaged sometimes the repair and remediation has to be enhanced because of newly discovered building code or ordinance or law violations. For example, a windstorm causes a facade to collapse off a building and that collapse reveals that the method used to mount the facade on the concrete slabs violates the … Continue Reading

California Weighs In on Enforcement of Other Insurance Clauses

On Monday, in Certain Underwriters at Lloyd’s, London v. Arch Specialty Ins. Co., 16 C.D.O.S. 3833 (Cal. Ct. App. Apr. 11, 2016), the California Court of Appeal (Third District) rejected Arch Specialty Insurance’s attempt to enforce “other insurance” clauses in the conditions and coverage grant of the relevant policies.… Continue Reading

The Wellington Agreement’s Confidentiality Provision Lives On

You remember the Wellington Agreement don’t you? This was the settlement agreement entered into back in 1985 to resolve numerous coverage disputes between Owens-Corning Fiberglass Corp. and its producers and insurers over pending asbestos litigation. Confidential arbitrations took place as part of the Wellington Agreement to resolve these coverage disputes. Much evidence was created as … Continue Reading

Construing Collapse Under a Homeowners’ Insurance Policy

Homeowners’ policies have become more complex as more and more homes have been built around the country. With the increase in natural and other disasters, including construction defect claims, homeowners have looked to their policies for coverage when disasters have destroyed or nearly destroyed their homes. A recent case highlights a couple of the issues … Continue Reading
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