Archives: Insurance

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No Fraud In Structured Settlement Payments Because of Broker Commissions

When insurance companies settle cases they often enter into structured settlements where they take a certain amount of money to purchase an annuity to fund the settlement.  The annuity then provides the periodic settlement payments to the settling party over time.  The principle amount used to purchase an annuity is generally the amount necessary today … Continue Reading

New York Court of Appeals Holds Non-domiciliary RRG Not Covered Under New York Late Disclaimer Rules

The federal Liability Risk Retention Act allows for the creation of industry groups–Risk Retention Groups (“RRG”) or Purchasing Groups–that are exempt from certain state insurance regulation requirements outside the RRG’s state of charter.  Most states, if not all, have unfair claims practices acts and those statutes are expressly applicable to RRGs.  Many states also have statutes … Continue Reading

Untimely Notice Causes Loss of Directors and Officers Coverage

Claims-made and reported policies typically contain, as a condition precedent, fairly strict notice requirements.  The entire point of a claims-made policy is to restrict the policy to claims made during the policy period and reported during the policy period or any extended reporting period.  Giving notice early and often is a mantra that is often … Continue Reading

When Seeking Coverage for Trademark Infringement Policy Exclusions Matter

In a recent case, the 4th Circuit Court of Appeals affirmed the dismissal of a coverage dispute based on unambiguous exclusions barring coverage.  Nothing dramatically unique here, but it serves as a good example of the need to read and understand the insurance policy and all of its exclusions.  … Continue Reading

Invasion of Privacy Exclusion Bars Coverage for TCPA Action and Settlement

Where an insurance policy has an express exclusion for Telephone Consumer Protection Act (“TCPA”) claims it is pretty clear that coverage will not be available.  But where the insurance policy does not have an express TCPA exclusion, does an Invasion of Privacy Exclusion bar coverage for alleged TCPA violations?  A Florida federal court recently found … Continue Reading

Breach of Cooperation Clause Shields Carrier From Duty to Indemnify

The cooperation clause in an insurance policy is an essential part of the insurance bargain.  If the policyholder does not cooperate in the reporting or investigation of a claim, the coverage the policyholder paid for may be lost.  In a recent case, a policyholder whose employees lied to investigators was found to have breached the … Continue Reading

English Court of Appeal Clarifies the Law on Notification of Circumstances

In Euro Pools Plc (in administration) v. Royal and Sun Alliance Plc [2019] EWCA Civ 808, the Court of Appeal considered the parameters and effect of a notification of a circumstance by an insured that could give rise to a subsequent claim under a professional indemnity insurance policy.  The court held that an insured could make … Continue Reading

No Coverage When Claims Relate Back to Notices Prior to Policy Inception

It is pretty common for D&O and E&O and other professional liability claims-made policies to have exclusions that preclude coverage for incidents that took place and were noticed prior to the inception of the policy.  Unless the policyholder has purchased “nose” coverage or has a retroactive date that goes back far enough, a prior noticed … Continue Reading

Superstorm Sandy Relaxed Rules Did Not Waive Proof of Loss Requirement Under NFIP

Superstorm Sandy was devastating to many people.  Those who had flood insurance through the National Flood Insurance Program (“NFIP”) obtained some additional relief.  But the NFIP, through the Standard Flood Insurance Policy (“SFIP”), has limits and requirements that cannot be ignored.  And apparently, the relaxation of some of those requirements for the purpose of expediting … Continue Reading

When a Loss Falls Within Policy Exclusions as a Matter of Law the Complaint Cannot Survive

The policyholder bears the burden of demonstrating that a loss suffered falls within the terms of the insurance policy.  In other words, the existence of coverage is an essential part of a policyholder’s claim.  Where the insurance company raises an exclusion, the initial burden is on the insurer to show that all the allegations within … Continue Reading

Proving Sudden and Accidental Discharge Requires an Expert With a Reliable Methodology

Environmental damage claims are often very technical.  Those technical aspects tend to permeate insurance coverage disputes.  This is especially true where the policyholder seeks coverage in the face of a pollution exclusion.  As we know, the pollution exclusion has evolved over the years.  Some pollution exclusions are not absolute and provide coverage for discharges that … Continue Reading

Widow Can’t Recover Under AD&D Riders After Husband Dies From Autoerotic Asphyxiation

In Tran v. Minnesota Life Ins. Co., No. 18-1723, 2019 U.S. App. LEXIS 12895, ___ F.3d ___ (7th Cir. Apr. 29, 2019), the Seventh Circuit Court of Appeals reversed a district court’s judgment, which had allowed a policy beneficiary to recover under two Accidental Death & Dismemberment (“AD&D”) riders for an insured’s death caused by autoerotic … Continue Reading

In a Battle of Conformity and Preemption, Arbitration Prevails

The Supremacy Clause of the U.S. Constitution nullifies state laws that conflict with federal law and treaties of the U.S.  But, under the McCarran-Ferguson Act, state insurance law reverse preempts federal law that interferes with the business of insurance as regulated by the states.  This issue comes up in conflicts between anti-arbitration provisions in certain … Continue Reading

Late-Notice Defense for Insurance Coverage Is Still a Thing

Notice provisions in insurance policies are there to inform an insurer of a claim in a timely manner so that the insurance company can properly investigate and address the claim.  Most notice provisions are conditions precedent to an insurer’s liability. While there has been some erosion to the defense of late-notice to coverage, a recent … Continue Reading

Crumbling and Cracking Is Not a Collapse Under an All-Risks Policy

Intuitively, an all-risks policy is supposed to cover all risks.  But we know that even all-risks policies have exclusions.  Sometimes, however, an exclusion is reinstated in part to provide coverage for a limited species of the excluded item.  For example, an all-risks policy may exclude “collapse,” but may write back that coverage to a limited … Continue Reading

When Is a Claim for Rescission Ripe for Adjudication?

Once in a while an insurance company learns that its insured did not accurately portray its risk when applying for the insurance policy.  In many cases, the insurance company will just cancel the policy, but sometimes the insurance company will want to rescind the policy so that no claims can be filed for the period … Continue Reading

Partial Final Award Not Ripe For Confirmation

Under Section 9 of the Federal Arbitration Act, a court must confirm an arbitration award when a timely request is made unless there is a basis to vacate or modify the award.  But a court has no ability to confirm an arbitration award unless the award is considered a “final” award.  The law in virtually … Continue Reading

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

When Arbitrators Exceed Their Powers

When an arbitration panel issues a final award any challenge to that award faces an uphill battle.  That is because under the Federal Arbitration Act (“FAA”) a final arbitration award must be confirmed (if requested) and can only be vacated for a very narrow set of reasons.  Of the four grounds for vacatur under Section … 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
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