Bad things can happen to innocent people, and sometimes the people responsible for them are judgment-proof. When that happens—and when the perpetrator also has potential coverage under an automobile or homeowners policy—victims sometimes view the circumstances of their injury more generously; they describe them with words like "careless" and "negligent" in place of harsh, judgmental terms, such as "intentional" or "criminal." Something of this sort seems to have been ... Keep Reading »
Exclusions/Exceptions
If Rainwater Lands Where it Doesn’t Belong, It’s Still “Surface Water” in the Eleventh Circuit
The Eleventh Circuit recently affirmed a decision of the Southern District of Georgia, finding an insured’s claim for water damage fell within an exclusion for loss or damage caused by "surface water." In Williams v. State Farm Fire and Casualty Insurance Company, Case No. 14-11100 (11th Cir. July 17, 2014), the dispute arose after the insured’s home was damaged by "thigh deep" water runoff from a rainstorm. The water should have flowed away from the plaintiff’s home, ... Keep Reading »
Fifth Circuit Holding Breathes Life Back Into the Contractual Liability Exclusion
Liability insurance policies typically exclude coverage for obligations arising out of the insured’s "assumption of liability in a contract or agreement." Earlier this year, the Texas Supreme Court took a narrow view of this exclusion: in the landmark decision in Ewing Construction Co. v. Amerisure Insurance Co., 420 S.W.3d 30 (Tex. 2014), the court held that a contractor’s agreement to perform construction work "in a good and workmanlike manner" did not assume any ... Keep Reading »
The Meth Business is Dangerous; (En)trust No One
For a landlord, it’s a bad day when your tenant gets busted for operating a meth lab, and the local authorities condemn your house because it’s contaminated with the byproducts of his business. It’s even worse when you learn there is no coverage for the cost of cleaning up the contamination. Neighborhood Investments, LLC, leased a house in Louisville, Kentucky, to a Mr. Kenneth McCormick. As neighborhood investments go, this was not a winner. Mr. McCormick was ... Keep Reading »
Is There a Duty to Defend Pollution Claims? It’s the Complaint, Stupid
This Spring, cases from Florida and Wisconsin reaffirmed the general proposition that a liability insurer’s duty to defend must be determined from the specific claims in the underlying complaint against the insured, and not from facts available from other sources. Both cases dealt with contamination or pollution conditions, and, in both instances, the courts held it was the nature of the underlying claim, rather than the actual presence of a pollutant, that established ... Keep Reading »
On Remand, District Court Expands Subcontractor Exception to Rule Against Coverage for Faulty Workmanship
Recent decisions from the U.S. Courts of Appeal for the Tenth and Second Circuits have partially overturned a longstanding rule against coverage for faulty workmanship under commercial general liability policies. The rule, known as the “fortuity doctrine,” was based on insuring clauses that provided coverage only for claims arising out of an “occurrence,” and which defined “occurrence” to mean “accident.” For many years, courts held that claims based on the insured’s ... Keep Reading »
In Faulty Workmanship Cases, Insuring Clause Dogs are Wagged by Exclusion Tails
In Greystone Const., Inc. v. National Fire & Marine Ins. Co., 661 F.3d 1272, 1289 (10th Cir. 2011), the U.S. Court of Appeals for the Tenth Circuit articulated an important rule for construing commercial general liability policies: [A] CGL policy ‘begin[s] with a broad grant of coverage, w[hich is then limited in scope by exclusions. Exceptions to exclusions narrow the scope of the exclusion and . . . add back coverage. But it is the initial broad grant of ... Keep Reading »
As Gunfire Thins the Ranks of the Employed, Employee Exclusions Hold the Line Against Coverage
As this blog has previously reported, accidents with guns are not likely to become less common any time soon. With home- and business-owners striving to find increasingly original ways to get shot, they will put increasing strain on the traditional language of the coverage exclusions in insurance policies. In Gear Automotive v. Acceptance Indemnity Insurance Company, No. 12-2446 (8th Cir. Mar. 18, 2013), the U.S. Court of Appeals for the Eighth Circuit recently ... Keep Reading »
Too Much of a Good Thing: Household Product Triggers Pollution Exclusion, Because “Quantity Matters”
Pollution exclusion clauses began appearing in commercial general liability policies when federal laws began making businesses liable for the cost of massive environmental clean-ups—like the remediation of “Volatile Organic Compounds” that was recently at issue in Chubb Custom Ins. Co. v. Space Systems/Loral, Inc., No. 11-16272 (9th Cir. March 15, 2013). A recent Colorado case presented the issue of when the grease that goes into your bacon double cheeseburger becomes a ... Keep Reading »
Amid Gun Frenzy, West Virginia Court Pries Coverage Issue From the Jury’s Hands
Since President Obama called for new gun-control legislation after the Sandy Hook tragedy, sales of weapons have spiked and government officials have proposed a variety of new measures to encourage —or even mandate —gun training and ownership. In a development that is arguably unrelated to this increase in the number of people handling firearms, accidental shootings have occurred at gun shows and ranges, in gun stores and even during gun certification training courses. ... Keep Reading »