Some Thoughts on Proving an Insurance Contract in Court

Insurance policy on a desk

Insurance companies often have their backs against the wall in any dispute.  Typically, in a coverage or premium action brought by the insurance company, it bears the burden of proving its insurance contract and any exclusionary endorsements.  In inter-company disputes that may be a bit easier and the rules may be a bit looser (e.g., reinsurance arbitrations), but in court, the policy has to be proven by the best evidence available.

Even if the dispute is just about one aspect of the policy, most courts require that the entire policy be proven, including all endorsements and other addenda.  That can be problematic when the “original” policy was issued through a broker or agent and delivered to the insured.  Often times, the “home office” copy may not contain all the pieces of the actual policy issued to the insured.

In this blog post, I will talk about a case we had many years ago and the challenges of proving an older, continuous policy, and a recent case in a New York intermediate appellate court where issues arose on appeal with the evidence presented about the policy.

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New York Appellate Court Upholds Title Insurance Kickback Regulation

Hand holding a letter

Last summer, a New York state motion court granted a petition by the title insurance industry challenging a New York State Department of Financial Services (“DFS”) regulation promulgated to prohibit certain practices affecting title insurance costs.  That order has now been modified by an appellate court and the petition has been denied except for two subsections of the regulation.

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Read Our Top 10 Blog Posts From 2018

Top 10Below are the top 10 blog posts from our Insurance & Reinsurance Disputes Blog for 2018.  These are the ones our readers viewed the most last year. The compilation is diverse as is the topic of insurance and reinsurance disputes.  Please enjoy this stroll down memory lane.

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New Arbitrability Decision from the Supreme Court

A new arbitration decision was handed down by the U.S. Supreme Court on January 8, 2019.  My colleagues in our labor and employment practice swiftly blogged about the new decision so I won’t repeat their cogent analysis. The case has nothing to do with insurance or reinsurance. But the principles set forth by Justice Kavanaugh in his first opinion (unanimous at that) are relevant to insurance and reinsurance arbitrations because most insurance and reinsurance arbitrations come within the Federal Arbitration Act (“FAA”).US Supreme Court Building Detail Close-up

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Arbitration Awards and Confidentiality Revisited

In reinsurance arbitrations, most parties agree to confidentiality and enter into a formal confidentiality order.  The confidentiality order typically applies to the final award as well as all materials generated in the arbitration.  Some insurance and reinsurance agreements have confidentiality provisions that lead to the same result.  The ARIAS-U.S. Rules for U.S. Insurance & Reinsurance Disputes presumes confidentiality (7.1 and 7.2) and ARIAS has a model confidentiality agreement.Confidential Files

In two previous blog posts, we discussed some of the issues with confidentiality in arbitration and whether arbitration awards and materials should be sealed when there is a petition to vacate or confirm the award.  In a recent case outside of the insurance and reinsurance world, a Missouri federal court addressed a similar question.

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As the Commercial Market Expands Government Terrorism Mechanisms Pull Back

In response to the terrorist attacks of the 2000s, a number of governments established insurance-like mechanisms to address the catastrophic effects of a terrorist attack.  One of the early state-backed facilities is the UK’s Pool Reinsurance Company, Ltd. (“Pool Re”), which was actually set up in the 1990s to address events sparked by the unrest in Northern Ireland.

The Pool Re scheme, which is explained on its website, is somewhat similar to the government-backed legislative mechanism in the US, the Terrorism Risk Insurance Program, often called by its original acronym, TRIA.  With the expansion of the commercial insurance and reinsurance market into terrorism coverage, the US and the UK have modified their programs.  This post discusses a new development at Pool Re, which reflects the growing ability of the commercial market to handle terrorism risks.

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LPTs and Existing Reinsurance Relationships

Insurers have been using loss portfolio transfers (“LPTs”) for decades for a host of reasons.  An LPT is a great way to move a legacy book of business off the balance sheet.  What is often forgotten

is the interplay between the LPT and existing reinsurance contracts.  This is especially so when the LPT is more retrocessional than reinsurance.

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Ninth Circuit Sends Conflict Between Representations of Authorized Insurer Agent and Certificate of Insurance to Washington Supreme Court

Certificates of insurance are ubiquitous in construction projects and in many other industries.  But, as most jurisdictions hold, a certificate of insurance is not the functional equivalent of the insurance policyIndustrial, Building, Antennas

and cannot be used to amend, extend or alter coverage.  It is merely a piece of paper informing the recipients that insurance has been obtained.  But what happens when an authorized agent of an insurance company makes a representation in a certificate of insurance about whether a party is an additional insured and, at the same time, the certificate disclaims its authority and ability to expand coverage?  That is the question that the Ninth Circuit had before it and has certified to the Washington Supreme Court.

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No Coverage for a Claim of Impairment of Goodwill and Reputation Under Defamation Endorsement

When a business gets sued it looks to its various insurance policies for coverage and a defense.  But sometimes the insurance policy purchased does not fit the coverage sought.  That was the caseCheers, happy hour, networking in the Seventh Circuit where a restaurant company sought coverage for a claim brought by a television provider for damages when the restaurant used a non-commercial subscription to show programming on screens in the restaurant.

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Advertising Injury and Offering For Sale

Whether an activity is advertising such that it comes within the advertising injury coverage grant of a commercial general liability (CGL) policy is a difficult and complicated question.  Maybe it shouldn’t be, but the coverage grant combined with exclusions to avoid coverage for intellectual property infringement claims and coverage write-backs within exclusions makes it complicated.

It certainly has vexed the courts.  In the face of this confusion, the U.S. Court of Appeals for the Second Circuit has held that an offering for sale may be advertising and that a duty to defend arises.

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