On June 6, the New York Court of Appeals in Burlington Insurance Co. v. NYC Transit Authority held that where liability is limited to injuries “caused, in whole or in part” by the named insured’s “acts or omissions,” coverage extends only to those injuries proximately caused by, not just causally linked to, the named insured’s actions or omissions. The 4-2 decision reversed the intermediate appellate court’s (Appellate Division, First Department) holding that under such ... Keep Reading »
Texas Supreme Court Clarifies When Insured May Recover Policy Benefits
In an effort to clarify over 20 years of conflicting precedent, the Texas Supreme Court announced five rules that, according to the court, explain the relationship between claims for breach of insurance policy and extra-contractual claims for bad faith and violations of the Texas Insurance Code. USAA Texas Lloyds Co. v. Menchaca, No. 14-0721, slip op. at 6 (Tex. April 7, 2017). Although an insurance policy is an agreement between the parties that is generally governed by ... Keep Reading »
Third Circuit Affirms Rescission of $25 Million Contaminated Products Policy
In H.J. Heinz Co. v. Starr Surplus Lines Ins. Co., No. 16-1447 (3d Cir. Jan. 11, 2017), the Third Circuit affirmed a District Court’s order allowing insurer Starr Surplus Lines Insurance Company (“Starr”) to rescind a $25 million Contaminated Products Insurance (CPI) policy that it sold to food manufacturer H.J. Heinz Company (“Heinz”), on the basis that Heinz failed to disclose material information in its insurance application. After Starr declined coverage, Heinz ... Keep Reading »
Not Seeing Double: In Reversal, New York Court Holds That Third-Party Liability Payments May Not Offset UIM Benefits
In New York, uninsured/underinsured motorist coverage “does not function … to fully compensate … insureds for their injuries.” Weiss v. Tri-State Consumer Ins. Co., 98 A.D.3d 1107, 951 N.Y.S.2d 191 (2d Dep’t 2012). UIM coverage is subject to limits, and those limits are generally reduced by the amount of coverage available to the person who caused the injury. Standard UIM endorsements also provide that coverage “shall not duplicate” payments the insured receives from ... Keep Reading »