Sublimit in Primary Policy Quashes Excess Insurer’s Obligation to Follow

You would think that a following form excess liability policy simply follows the primary liability policy’s terms and conditions.  That may well be true, but excess policies may contain exclusions or provisions that limit the following requirements under certain conditions.  Recently, the Eleventh Circuit addressed this issue concerning an assault or battery claim.

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Resulting-Loss Exception Does Not Restore Coverage For Faulty Workmanship

under construction

The faulty workmanship exclusion precludes coverage where the claimed damage is caused by or resulting from an act, error or omission (negligent or not) that relates to the design, specifications, construction, materials or workmanship.  Can coverage nevertheless be restored by the resulting-loss exception to the exclusion?  The Tenth Circuit recently addressed this question.

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“Please” Is Not a Material Condition of an Insurance Policy’s Notice of Claim Provision

Notice of Lawsuit

It is fundamental that a policyholder has to notify its insurance company about a claim if it expects the insurer to defend and indemnify the policyholder against that claim.  When and where that notice has to be given, however, varies.  Sometimes the notice requirement is expressed as a mandatory condition and sometimes the policy wording is more polite.  In a recent non-precedential case, the Fifth Circuit Court of Appeals addressed this issue in a legal malpractice case.

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A Word About Business Interruption Claims From Vandalism, Riot and Civil Commotion

The death of George Floyd is a national tragedy that should never have happened.  The winds of change are in the air and we can only hope that peace, understanding, justice and fairness for all will prevail.  What happened to George Floyd and the cries to end racial injustice, however, have been overshadowed in the eyes of many by the vandalism, looting and rioting that followed.  That brings us to insurance.

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Aggregating Losses From the COVID-19 Crisis for Reinsurance Purposes

Onions at the farmers market

The question of whether hundreds or even thousands of COVID-19-related losses can be aggregated together as one “loss” or “occurrence” for reinsurance purposes is one that both ceding companies and reinsurers are pondering.  Expressly putting aside whether COVID-19-related business interruption losses are covered by underlying insurance policies (see our other blog posts), this post discusses how both cedents and reinsurers might prepare for the possibility.

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Arbitration Should Play a Key Role in Resolving COVID-19 Insurance and Reinsurance Disputes

There are nearly 400 disputes in the courts about whether loss of business income because of the novel coronavirus is covered by the business income, extra expense and civil authority coverage grants found in many commercial property insurance policies.  Other disputes exist or will arise over different insurance coverage issues stemming from COVID-19.  Additionally, as losses are paid, reinsurance disputes likely will arise.  Considering all of this, I wrote a short article for the ARIAS•U.S. Quarterly suggesting that arbitration can and should play a key role in resolving COVID-19 insurance and reinsurance disputes.  You can find that article here in the Q2 issue on the ARIAS website and in your mailbox if you are an ARIAS member.  If you subscribe to Harris Martin Publishing’s COVID-19 Litigation Report or Reinsurance & Arbitration Report, you will find the article re-published in both those publications on June 5, 2020.

Harris Martin described the article this way:

In this article, Larry P. Schiffer of Squire Patton & Boggs (US) discusses the advantages to using arbitration to resolve COVID-19 coverage disputes, noting that ARIAS arbitrators “have extensive insurance industry experience and understand how coverages like business income and extra expense with civil authority work and what those are meant to cover.”

I hope you enjoy the article.

 

Broad Insurance Policy Construction Puts False Claims Act Claim Within Coverage for Medical Incidents

Doctor Sitting in Hallway with Head in Hands

Court have always construed the duty to defend more broadly than the duty to indemnify.  That broad construction becomes amplified when coupled with an equally broad construction of the phrase “arising out of” in an insurance policy.  Recently, the Fourth Circuit Court of Appeals found such a broad construction under North Carolina law, leading to a finding of coverage for a false claims act claim as a medical incident.

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Is Shoddy Work an Occurrence Under CGL Policies? Not in Missouri

Commercial general liability (“CGL”) policies protect the policyholder against property damage caused by an occurrence.  Where the policyholder is sued for breach of contract and related claims because of shoddy design and construction issues, do those claims come within the scope of coverage as an occurrence?  The Eighth Circuit Court of Appeals recently addressed this issue under Missouri law.

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Arbitration Prevails in Coverage Dispute

Ethnic Tug of War

In a recent coverage dispute, an Indiana federal court addressed a two-pronged issue.  First, in the case of a multi-tiered ADR clause, who decides whether the dispute should be conducted under the arbitration section of the clause?  Second, where there are several arbitration clauses, who decides which one prevails?  You’ll have to read more to find out.

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June 2020 Reinsurance Newsletter

Newsletter Concept

The Squire Patton Boggs June 2020 Reinsurance Newsletter is now available for your reading pleasure.  You can read the Newsletter on the Squire Patton Boggs website at this link.  In this issue we discuss the Second Circuit’s Utica v. Fireman’s Fund decision, which reversed a judgment for the cedent after a jury verdict.  We also cover many other cases, including various motions to compel arbitration, the enforceability of an arbitration summons under Section 7 of the Federal Arbitration Act and several cases of the discovery of reinsurance information.  We hope you find this issue of the Squire Patton Boggs Reinsurance Newsletter useful.

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