Claims-made policies often cover acts that occur before a policy period, so long as they result in a covered claim during the policy period. This is a fundamental difference between claims-made and occurrence policies. But the retroactive scope of a claims-made policy is not limitless. Many claims-made policies contain 'retroactive dates' that cut off an insurer's liability for occurrences before that date. Financial lines claims - as opposed to bodily injury or ... Keep Reading »
Exclusions/Exceptions
Poisoning the Well: Washington Supreme Court Applies Efficient Proximate Cause to Eviscerate Pollution Exclusion in Liability Policy
Professionals and practitioners in first party property insurance are likely familiar with the efficient proximate cause rule, which requires an insurance policy to provide coverage where "a covered peril sets in motion a causal chain," even if subsequent causes-in-fact of the loss are excluded by the policy. As indicated by our previous coverage [1, 2, 3] of this doctrine, this can be a confusing analysis that leads to unpredictable results. Until recently, the ... Keep Reading »
WV Court Rules Earth Movement Exclusion Unambiguously Precludes Coverage Regardless of Whether Landslide Was a Man-Made or Naturally-Occurring Event
In Erie Insurance Property and Casualty Company v. Chaber, No. 16-0490 (W. Va. June 1, 2017), the Supreme Court of Appeals of West Virginia reversed a lower court’s decision, holding that damage caused by a landslide was excluded, regardless of whether the landslide resulted from excavations or naturally occurred, where the policy excluded loss whether such loss is “caused by an act of nature or is otherwise caused.” The court went on to follow the law of other ... Keep Reading »
Shot Through the Heart, But the Excess Carrier Isn’t to Blame: Georgia Federal Court Finds Policy’s Broad Firearms Exclusion Bars Coverage
On June 1, 2017, the U.S. District Court for the Northern District of Georgia granted summary judgment in favor of AIG Specialty Insurance Co. in a case involving the application of the firearms exclusion in Powe v. Chartis Specialty Insurance Co., No. 1:16-CV-01336. The court dismissed the case, in which claimant Christopher Powe sought the remaining $3 million of a $4 million settlement against the insureds, property management company HMI Property Solutions, Inc. ... Keep Reading »
Connecticut Appellate Court Addresses Trigger, Allocation, Exclusions, and Other Issues of First Impression in Coverage Litigation Over Long-Latency Asbestos Injury Cases
Connecticut’s intermediate appellate court addressed a number of novel issues in a wide-ranging opinion regarding primary and excess insurers’ respective duties to defend and indemnify their common insured for long-tail asbestos-related injury claims. The opinion was rendered unanimously and authored collectively by the three-judge panel of Robert Beach, Douglas Lavine, and Stuart Bear (ret.). The case, styled R.T. Vanderbilt Company, Inc. v. Hartford Accident and ... Keep Reading »
Reading the Crystal Ball: Reservation of Rights Letters under South Carolina Law in the Wake of Harleysville Group Insurance v. Heritage Communities, Inc., et al.
The South Carolina Supreme Court recently took a firm stance on what constitutes a sufficient reservation of rights letter in Harleysville Group Insurance v. Heritage Communities, Inc., et al., -- S.E.2d -- , No. 2013-001281, 2017 WL 105021, at *2 (S.C. Jan. 11, 2017). In Heritage, the court addressed coverage for defective construction at two condominium developments in Myrtle Beach. According to the opinion, the developments were constructed between 1997 and 2000 by ... Keep Reading »
Who is an Insured and What is a Claim? Circuit Courts Offer Guidance in Applying the “Insured vs. Insured” Exclusion in D&O Policies
Typical directors and officers (“D&O”) liability policies exclude from coverage claims brought by one of the company’s directors or officers against another, or between the company and any of its directors or officers. The purpose of the exclusion is to make clear that there is no coverage for intra-company in-fighting. It also provides insurers with some protection against potentially collusive claims. Sometimes questions arise as to who the “company” is, or whether ... Keep Reading »
Unlike Friendships, Policy Exclusions Are Not Severable In West Virginia
A homeowners insurance policy often covers every member of a family, and many policies state that the insurance applies separately to each insured. The same policies usually exclude coverage for intentional acts. But what happens when one insured is accused of negligently permitting a different, separately-covered family member to cause harm intentionally? Last month, in American National Property & Casualty Company v. Clendenen, No. 16-0290 (W. Va. Nov. 17, 2016), ... Keep Reading »
Postdiluvian Perils: Second Circuit Weighs Coverage For Losses Suffered After The Waters Recede
“[N]ow I only hear/ Its melancholy, long, withdrawing roar,/ Retreating, to the breath/ Of the night-wind, down the vast edges drear/ And naked shingles of the world.” — Matthew Arnold As this blog has reported, exclusions and limits for flood coverage have generally held up against the tide of claims arising from Superstorm Sandy. Now that the water is gone, however, new losses have been discovered, and new challenges arise. Last month, in National Railroad ... Keep Reading »
Subcontractor Exception Torpedoes Insurers’ Defense To Faulty Workmanship Claim
As this blog has reported, a line of cases deciding coverage disputes over faulty workmanship runs against (or, at least, around) a basic rule for interpreting insurance policies. Under that rule, the scope of coverage is determined by a policy’s insuring clause, which may be narrowed by one or more exclusions. Exceptions to the exclusions can add back coverage that the exclusions remove, but they cannot create coverage beyond the ambit of the insuring clause. E.g., ... Keep Reading »
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