On construction projects, it is common for the owners, general contractors, and subcontractors to execute various contracts requiring the parties to procure insurance and have other parties designated as additional insureds under those policies. Recently, the Second Circuit Court of Appeals in Amerisure Insurance Co. v. Selective Insurance Group Inc. addressed the interplay between construction contracts and commercial general liability and umbrella policies. The case ... Keep Reading »
Additional Insured
Federal Court Finds Selling Products in New Jersey Is Insufficient to Establish Personal Jurisdiction in Case Regarding Insurance Coverage for Underlying New Jersey Action
A U.S. district judge ruled in a coverage dispute that an allegation that a company sold products in New Jersey is insufficient to establish personal jurisdiction in a related insurance coverage action. In Ohio Security Insurance Co. v. Premium Food Group Inc., the court ruled that the fact that the insureds sought coverage for an underlying suit filed in New Jersey was not sufficient to exercise specific personal jurisdiction over two New York corporations. Underlying ... Keep Reading »
Southwest Marine and General Insurance Co. v. United Specialty Insurance Co.: A Lesson in Common Limitations of Additional Insured Provisions
In Southwest Marine and General Insurance Co. v. United Specialty Insurance Co., the U.S. District Court for the Southern District of New York recently highlighted limitations in a common policy endorsement extending commercial general liability insurance to additional insureds. Hanjo Contractors Inc. subcontracted with Manhattan Steel Design to perform work on a New York building. In February 2016, Manhattan Steel employee Oscar Perez was struck and injured by a ... Keep Reading »
Florida Court Holds Carrier’s Basis for Botched $149K Ferrari Payment Defied “Common Sense”
A familiar dispute between a carrier and a third party involves the third party’s attacking the language of the insurance contract and arguing in favor of an interpretation not reflected by the plain meaning of the text. But in a recent opinion by a Florida appellate court, World Finance Group LLC v. Progressive Select Insurance Co., it was the third-party lienholder that benefitted from the “plain meaning” of the text. This case stemmed from a March 2014 accident ... Keep Reading »
New York’s Highest Court Holds Untimely Disclosure Is Not an Untimely Disclaimer
The defendant, Preferred Contractors Insurance Company Risk Retention Group LLC (PCIC), is a risk retention group charted in Montana and doing business in New York. PCIC issued a CGL policy naming defendant Nadkos Inc. as an additional insured for liability related to the ongoing operations of the subcontractor and other members of the risk retention group. PCIC disclaimed coverage for Nadkos for an underlying personal injury action by an employee of Nadkos' ... Keep Reading »
EDNY “Teas” It Up On Additional Insured, Finds Insurer May Withdraw Defense and Recoup Defense Costs
Given the broad duty to defend rules in most jurisdictions, liability insurers often find that they must — or perhaps should out of an abundance of caution — defend an insured against a claim that in all likelihood will not implicate the duty to indemnify, such as when extrinsic evidence strongly suggests that an exclusion will apply. In these situations, insurers in many states are permitted to offer a defense under a reservation of rights to withdraw and seek ... Keep Reading »
New York’s High Court Holds Additional Insured Coverage Extends Only to Injuries Proximately Caused by Named Insured’s Fault
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 »
Tenth Circuit Drills Down Into Roots Of Moral Hazard, Comes Up Dry
Moral hazard (one of this blog’s preoccupations) usually comes up in disputes over the scope of coverage under an insurance policy. (See, for example, here, here and here.) But state legislatures often address it, too—for example, by imposing limits on agreements to indemnify a party against the consequences of its own negligence. This week, in Lexington Ins. Co. v. Precision Drilling Co., No. 15-8036 (10th Cir. July 26, 2016), the U.S. Court of Appeals for the Tenth ... Keep Reading »
Additional Insureds Deserve Attention Too: New York Court Finds Insurer’s Reservation of Rights to Named Insured Did Not Constitute Notice to Additional Insured Under § 3420(d)(2)
Liability insurers issuing or delivering policies in New York are well apprised of the statutory requirement that the insured is to be provided written notice of a disclaimer or denial of a bodily injury or death claim “as soon as is reasonably possible.” N.Y. Ins. Law § 3420(d)(2). Also well-known is that an insurer may face severe consequences from delaying issuance of a disclaimer on a ground that is known to be valid, while still investigating other possible grounds ... Keep Reading »
Keeping it Basic: NJ Supreme Court Limits Amount Owed to Innocent Third Parties
The New Jersey Supreme Court recently held that an automobile insurer must pay an innocent third party the contracted $10,000 amount of basic coverage following an auto accident involving the insured's vehicle, despite that the policy was procured by fraud and rescinded. Luckily for the insurer, the Court held that the insurer was only responsible for the amount of coverage provided by the rescinded policy, which was $5,000 less than the $15,000 per person/$30,000 per ... Keep Reading »