Is Reinsurance Information Relevant In an Insurance Coverage Case?

There are lots of cases discussing the production of reinsurance contracts and reinsurance communications in insurance coverage disputes.  Generally, the answer depends on the specific facts of the case.  Recently, in a coverage case based on headline events, a New York motion court upheld a referee’s order for production of both reinsurance contracts and reinsurance communications.

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Are Repair Costs Covered Damages Under a Liability Policy?

Liability policies cover sums an insured becomes legally obligated to pay to a third-party as damages for a loss.  Typically, there is no coverage in a liability policy for expenses incurred by the insured to repair damage to the insured’s own property.  Additionally, nearly every liability policy has an owned-property exclusion.  In a recent case, the 5th Circuit addressed this subject and whether an exception to the owned-property exclusion applied.

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Non-Party Notice of Appeal in Reinsurance Dispute Results in an Award of Attorney Fees

When you are not a party to a legal proceeding, but nevertheless file a notice of appeal purportedly on behalf of a party after a settlement, the likelihood of a positive outcome is very low.  Such was the case recently before a New York federal court.  The result:  an award of attorney fees.

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Where There Is No Intent There Is No Tortious Interference

Reinsurance programs are often complex and the calculation of reinsurance premiums can be confusing.  Periodically, a reinsured will review its reinsurance premium transactions to make sure that it has not been overpaying for its reinsurance protection.  Where a third-party premium audit company is used for that review, compensation is usually based upon a percentage of the savings found on the reinsurance premiums.  In a recent case, a reinsured hired a third-party auditor who produced a report indicating a significant over-payment of reinsurance premium.  Ultimately, the reinsured rejected the report and continued calculating the reinsurance premium based on the methodology used by its reinsurance intermediary.  Suffice it to say that the audit company was less than pleased and, when the reinsured refused to pay the audit company, sued the intermediary for tortious interference with the contractual relationship between the audit company and the reinsured.  As the discussion below indicates, the suit was unsuccessful.

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Third Circuit Rejects Medication-Induced Suicide Exception to Policies’ Suicide Exclusions

In a recent unpublished decision, the Third Circuit Court of Appeals rejected a claim that the insured lacked the intention to kill herself because she suffered from medication-induced suicidality.

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The 5th Amendment and Insurance Coverage

Stop Hand

When a property is destroyed by fire, the property owner’s property insurance likely will cover the loss all things being equal.  But if the fire was intentionally set, coverage likely will be denied.  In the case of a residential property, policies often condition coverage on occupation of the premises.  In a recent case before the Third Circuit Court of Appeals, all these issues collided.

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Is Faulty Workmanship an “Occurrence” Under a CGL Policy?

Manufacturers often face multiple lawsuits when their products fail to perform as expected.  Sometimes, the cause of the product’s failure is the faulty workmanship of a component manufacturer.  When that is the case, the product manufacturer will seek damages from the component manufacturer for the underlying product defect claims.  The component manufacturer will then turn to its insurance carriers to cover it for the dispute with the product manufacturer.  In a recent case, the Third Circuit Court of Appeals addressed claims by a window component manufacturer against its insurance carriers after the insurance carriers disclaimed coverage for a settlement between the component manufacturer and the product manufacturer.

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Ohio Supreme Court to Confront Whether Return Premium Required Before Seeking Rescission

The Ohio Supreme Court recently accepted a case that presents two issues with significant implications for insurers seeking to void policies based upon misstatements in policy applications: (1) whether “an insurance policy sufficiently warns the insured of the consequences of warranty misstatements where the policy states that it ‘may be held void ab initio,’” and (2) whether an insurer is required to void a policy and return an insured’s premium before bringing a declaratory judgment action to declare a policy void ab initio.

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Non-Signatory Surety Bound By Arbitration Clause in Incorporated Contract

Bond

An arbitration provision in a contract typically applies only to the contracting parties.  Where, however, the contract is incorporated by reference into a second agreement, if it is broad enough, the party to the second agreement–although a non-signatory to the original agreement–may find that the arbitration provision applies to them as well.  This was the result in a case before the Second Circuit involving a surety on a performance bond.

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