Forum Selection Clause in Excess Policy Overrides Appraisal Clause in Primary Policy

Hurricane over Cuba

When primary and excess polices cover the same property many assume that the excess policy will follow the form of the primary policy.  That is not always the case, which is a good reason why reading the actual terms of both policies is important.  In a recent case involving hurricane damage to a Florida development, the policyholder sought to invoke the primary policy’s appraisal provisions against the excess insurer over a dispute about the value of the damage to the property.  The excess insurer refused and, instead, insisted that the dispute must be resolved in the New York courts.

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Assigning Insurance Policies Can Get Tricky


Insurance disputes sometimes arise out of transactions.  Those of you who are involved in transactions, including transactions arising out of insolvencies, might be interested in a cautionary tale from a recent Illinois appellate court case addressing the assignment of insurance policies as part of an asset purchase agreement.  This drafting lesson may help avoid future litigation.

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Totality of the Circumstances and Late Notice

Notice of Lawsuit

The defense of late notice to coverage applies differently depending on the jurisdiction.  In Illinois, whether a policyholder’s notice to its insurer was timely is determined by the totality of the circumstances.  Prejudice is just one of five non-dispositive factors. In a recent case involving an excess insurer, the Seventh Circuit addressed whether the policyholder’s notice under a commercial auto policy was untimely.

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Covered and Uncovered Claims — When Allocation Is Required

Plaintiffs usually don’t bring claims based on the defendant’s insurance coverage.  So it is not unusual for an insurer and policyholder to have a dispute about what claims are covered and what claims are not covered under the insurance policy and, if there are covered and uncovered claims, how to allocate the covered claims to the insurance policy.  When the allocation question arises between a policyholder and an excess insurer, where the excess insurer did not control the underlying defense, the situation becomes more complicated.  The Eighth Circuit Court of Appeals recently addressed this issue.

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Breach of Contract Exclusion Precludes Coverage

Businessman burning contract

Liability insurance policies are meant to cover claims brought against insureds by third-parties alleging a fortuitous event that causes damages.  But most liability policies have exclusions that preclude coverage for certain events.  For example, many policies exclude coverage for property damage to property owned by the insured.  Another exclusion precludes coverage for damages resulting from the assumption of liability in a contract or agreement.  And the one we will concentrate on in this post is the exclusion for breach of contract claims.  The Sixth Circuit Court of Appeals recently addressed these exclusions.  Continue Reading

Crime Coverage — Who Is an Employee and Who Is an Authorized Representative?


In a recent case, a parent company took out a crime insurance policy for itself and its subsidiaries.  When a property manager for its subsidiary stole funds through forged checks over several years, the policyholder sought a recovery under the crime insurance policy.  Unfortunately for the policyholder, there was no insurance coverage.

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To Match or Not to Match, That Is the Question

After Hurricane Sandy, I found some shingles missing off my roof.  My contractor said the entire roof should be replaced.  My insurer would only pay for replacing the missing shingles.  The type of shingle was readily available.  But what happens if the damage to the roof, siding, facade, floor occurs to only parts of those surfaces and there is no replacement for the damaged coverings?  Does the insurance company have to match and replace the entire roof or siding on the building?  That was the question recently addressed by the Seventh Circuit Court of Appeals.

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Interrelatedness, Prompt Notice and Prior and/or Pending Litigation Exclusion Collide

Directors and Officers (“D&O”) insurance policies have been written on a claims-made basis for decades.  Because of the nature of claim-made policies, D&O policies often have provisions addressing prior claims and the relationship between similar allegations in pending claims.  D&O policies also often have exclusions for prior and/or pending litigation.  These provisions address the circumstances where multiple claims may be brought over time arising from the same set of facts.   In a recent case, the Fifth Circuit addressed these provisions along with the provision requiring the policyholder to provide prompt notice of a claim.

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Prior Publication Exclusion and the Duty to Defend

Stop Hand

Remember my recent post on how broad the duty to defend was?  Well it’s still broad.  In a new opinion, the 4th Circuit Court of Appeals, under North Carolina law, reversed a district court’s order on a motion on the pleadings that had dismissed a policyholder’s complaint based on application of the “prior publication” exclusion.  The decision is another lesson in how broad the duty to defend is compared to the duty to indemnify.

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Without the Bellefonte Presumption, Reinsurer Denied Partial Summary Judgment

You remember Bellefonte, right?  Bellefonte Reinsurance. Co. v. The Aetna Casualty & Surety Co., 903 F.2d 910 (1990).  When the New York Court of Appeals in Global Reinsurance Corp. of Am. v. Century Indemn. Co., 30, N.Y.3d 508 (2017), took the wind out of reliance on Bellefonte as authority for the stated limits in a facultative certificate capping a reinsurer’s liability, courts were required to review the actual language of the reinsurance contract and interpret that language according to the standard rules of contract interpretation without reliance on any presumptions.  One of those cases went back from the Second Circuit to the district court to interpret the operative language of the underlying umbrella policies because the following clause in the facultative certificates required that the reinsurer follow the cedent’s liability for defense costs unless the underlying umbrella policies were inconsistent with the facultative certificates.

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