Archives: Coverage

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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

Duty to Defend Does Not Extend to Claim Where No Suit Is Filed

Case law in nearly every state provides that the duty to defend is broader than the duty to indemnify. Typically courts look to the allegations in the complaint and compare those allegations to the coverage grants in the policy to determine if the allegations are sufficient to bring the claim within the possibility of coverage … Continue Reading

Contractual Privity and Reinsurance

In most jurisdictions a policyholder cannot bring a direct action against a reinsurer because of the lack of contractual privity. Yes, there are some quirky statutes and jurisdictions that allow a direct right of action under certain circumstances, but the general rule is that where there is no contractual relationship between the reinsurer and the … Continue Reading

New York Appeals Court Holds No Allocation of Environmental Losses to Insurers for Uninsured Years

In a case of first impression, a New York intermediate appellate court has held that the policyholder, rather than existing insurers, must be allocated  environmental cleanup costs for periods of time when environmental cleanup insurance was not available in the marketplace. The decision reverses the denial of the insurer’s partial motion for summary judgment.… Continue Reading

Is a Reinsurance Contract an Insurance Contract for Discovery Purposes?

Litigators know that in federal court initial disclosures are required. Under FRCP 26(a)(1)(A)(iv), parties must provide to the other side for inspection and copying “any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made … Continue Reading

New York Court of Appeals Reaffirms Contract Language Controls Allocation and Exhaustion Methodologies

Long-tail claims from asbestos and other toxic exposures have plagued policyholders and their insurers for decades. Myriad issues arise when trying to determine when injuries are incurred, how policies are triggered, how liability should be allocated among multiple policies and when excess policies are required to cover the losses. None of this is easy and … Continue Reading

The Wellington Agreement’s Confidentiality Provision Lives On

You remember the Wellington Agreement don’t you? This was the settlement agreement entered into back in 1985 to resolve numerous coverage disputes between Owens-Corning Fiberglass Corp. and its producers and insurers over pending asbestos litigation. Confidential arbitrations took place as part of the Wellington Agreement to resolve these coverage disputes. Much evidence was created as … Continue Reading

Construing Collapse Under a Homeowners’ Insurance Policy

Homeowners’ policies have become more complex as more and more homes have been built around the country. With the increase in natural and other disasters, including construction defect claims, homeowners have looked to their policies for coverage when disasters have destroyed or nearly destroyed their homes. A recent case highlights a couple of the issues … Continue Reading

Timing Is Everything for Late Notice In New York

Nearly every liability policy has a provision that requires the policyholder to notify the insurer promptly of any accident or incident that might become a claim and of any lawsuit or other claim filed against the policyholder by a claimant. And many of these notice provisions are couched in language that the courts have construed … Continue Reading

The Dichotomy Between Intent to Injure and Intentional Conduct

Most liability policies require that the claim arise from an accident or occurrence typically defined in a way that the accident or occurrence is a fortuitous event and not an intentional act. The typical automobile accident or slip and fall are accidents; nothing premeditated or planned, no intent to cause harm, no intent to drive … Continue Reading
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