Archives: Coverage

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Arbitration of Insurance Coverage Disputes

Coverage disputes between insurance carriers and policyholders are ripe for resolution through arbitration.  ARIAS•U.S. is working on a project to create an arbitration pathway, including modified rules and requirements for certified arbitrators, for these types of disputes and others.  But unless the parties agree or the insurance contract contains an arbitration clause, the arbitration option … Continue Reading

Pleading Standards and Consequential Damages In Coverage Disputes

When a policyholder sues its carrier for breach of contract or bad faith, one question that arises is whether the policyholder should have to plead alleged damages with particularity, or whether the policyholder can sustain its claims with less specific allegations.  A New York appellate court recently declined to impose that higher, particularity standard.… Continue Reading

Delaware Superior Court Excludes Coverage for Directors Acting in Dual Capacity as Investors

Directors and officers (“D&O”) liability insurance generally protects directors and officers against legal expenses and personal liability for acts and omissions taken in their capacity as directors and officers of the insured company.  In a recent case, coverage was excluded where directors also acted as investors of the company.… Continue Reading

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 policy 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.  … Continue Reading

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 case in the Seventh Circuit where a restaurant company sought coverage for a claim brought by a television provider for damages when the … Continue Reading

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. … Continue Reading

Coverage for Government Investigations and Warranty of No Known Claims

Obtaining insurance coverage for a government investigation is often complicated by the type of investigation and the available coverage.  Most policies that cover aspects of government investigations–directors and officers liability policies or errors and omissions policies–are written on a claims-made form and exclude claims that relate back to prior or pending claims.  Very often the … Continue Reading

What Happens When a Policyholder Settles Without Involving Its Insurer?

Nobody likes to get sued.  When a lawsuit or a demand letter comes in, the first thing that crosses the mind of the party being sued (or claimed against) is how can I resolve this quickly?  That may be a reasonable visceral reaction to the suit, but what happens when insurance is involved?… Continue Reading

Ramifications of Global Re v. Century Indemnity Evident in Second Circuit

In late 2017, the New York Court of Appeals, in Global Reinsurance Corp. of Am. v. Century Indemn. Co., 30 N.Y.3d 508 (2017), provided guidance to the Second Circuit Court of Appeals on how New York law interprets reinsurance contracts and, in particular, the stated limits in facultative certificates and whether those stated limits are … Continue Reading

Direct Claims Against Reinsurer Fail to Succeed

Direct actions against reinsurers have been on the rise for some time.  To bring a direct action, a policyholder must get over the contractual privity hurdle and find some basis to show a direct relationship or third-party beneficiary relationship.  Many policyholders try to bring these actions, but they more often than not fail at the … Continue Reading

Failure to Comply With Protective Safeguards Endorsement Results in Loss of Coverage

A Protective Safeguards Endorsement (“PSE”), as defined by my friends at IRMI, is “[a] property insurance endorsement that makes it a condition of coverage that the protective safeguards cited in the endorsement (such as an automatic sprinkler system or night watch guard) be in operation at all times except when the insurer has been notified of … Continue Reading

The Peril of Settling Without Insurer Consent

In an earlier blog post we discussed a Georgia case where settlement occurred without consent from the insured.  In that case, the court held that when a policyholder settles without consent in the face of a consent to settle clause, the policyholder will not succeed in seeking a recovery for that settlement from the insurance … Continue Reading

Should We Expect a Surge in Reinsurance Disputes?

I recently came across a number of articles in the insurance trade press discussing the economic effect of the recent catastrophes on the reinsurance market.   Some of the commentators wondered whether all of the property and related losses will cause reinsurance premiums to rise and end the very long soft reinsurance market.  Others thought that the recent … Continue Reading

Insured v. Insured Exclusion in Directors and Officers Policies

A typical directors and officers liability insurance policy provides coverage for officers and directors of a corporation for all loss that is not indemnified by the corporation resulting from a covered claim for a wrongful act as defined by the policy.  Virtually all D&O policies also include an “Insured v. Insured Exclusion,” which precludes coverage for … Continue Reading

New York’s 3420(d)(2) Cannot Be Used Between Insurers

We have written a number of blog posts involving New York Insurance Law Section 3420(d)(2), which requires insurance companies to disclaim quickly or waive the right to disclaim.  Parties have tried to rely on 3420(d)(2) in a variety of ways.  In a recent case, the Second Circuit Court of Appeals was asked to address the … Continue Reading

Florida Office of Insurance Regulation Issues Emergency Order Post Hurricane Irma

On September 4, 2017, Florida’s Governor, Rick Scott, declared a state of emergency in every county in Florida in anticipation of Hurricane Irma, through Executive Order No. 17-235, triggering Insurance Commissioner David Altmaier’s related emergency authority. Fla. Stat. § 252.63(1). On September 13, 2017, Commissioner Altmaier issued the Office of Insurance Regulation’s (the “Office”) Emergency … Continue Reading

Will the Upsurge in Cat Bonds Weather the Storm(s)?

As yet another hurricane bears down on the US, the insurance press is reporting a surge in Cat Bonds and other alternative capital.  Cat Bonds and the amounts reinsured are apparently at a high.  Cat bonds, as we know, respond to catastrophic loss events.  Cat Bonds exist for various types of large property loss events, … Continue Reading

Additional Insured Endorsement Clarified By New York Court of Appeals

The New York Court of Appeals recently issued an important decision on how the Additional Insured endorsement to a Commercial General Liability insurance policy should be interpreted.  It did  so in a split decision and by reversing a decision by the Appellate Division. A vigorous dissent accompanied the opinion.  Commentators are already discussing the ramifications of … Continue Reading

Proving a Reinsurance Contractual Relationship Exists

Litigating a reinsurance contract dispute is not much different than litigating any commercial contract dispute. The party seeking recovery under the contract has to prove that the contract exists. Proving the policy can be a big issue with claims asserted under old policies and reinsurance contracts. This certainly has been an issue with asbestos and other … Continue Reading

Breasting Dolphin Piles and Fortuity Under All-Risk Policies

An all-risk policy is meant to cover a loss triggered by any conceivable cause not excluded under the policy. While the burden is on the policyholder to establish a prima facie case for coverage, the policyholder need only show (1) the existence of an all-risk policy, (2) an insurable interest in the subject of the insurance contract, and … Continue Reading

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
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