In Vizio Inc. v. Arch Insurance Co., a case stemming from a class action settlement, the Ninth Circuit Court of Appeals clarified several areas of California law involving the interaction of primary and excess insurance coverage, as well as what constitutes adequate notice to excess carriers. Beginning in 2014, television producer Vizio started selling televisions that automatically tracked what customers were watching and sent that information back to Vizio. The ... Keep Reading »
Notice/Prejudice
Known Means Known: Eleventh Circuit Requires Actual Knowledge to Trigger Insured’s Notice Obligation
In Frankenmuth Mutual Insurance Co. v. Brown’s Clearing Inc., the Eleventh Circuit Court of Appeals affirmed an Alabama district court’s ruling that the insured was not required to give notice of an underlying lawsuit until the insured had actual knowledge of the suit. Brown’s Clearing, a tree clearing company, hired a subcontractor to clear trees along I-75 in Bartow, Georgia. In July 2018, Courtney Ford allegedly sustained injuries when a tree limb pierced the ... Keep Reading »
Massachusetts Federal Court Affirms Coverage Disclaimer Based on Excess Carrier’s Strict Enforcement of Notice Requirement
In President and Fellows of Harvard College v. Zurich American Insurance Company, the U. S. District Court for the District of Massachusetts discussed the basis for its strict enforcement of an excess insurance policy’s notice requirement. Harvard sought coverage from its excess insurer, Zurich, under a “claims-made-and-reported insurance policy” for an underlying lawsuit against Harvard regarding challenges to its admission policies. The underlying suit was filed in ... Keep Reading »
Federal Court Rules “Unauthorized Network Access Exclusion” Precludes Coverage for $1.3M Payment From Hacker’s Fraudulent Email
The U.S. District Court for the Eastern District of Pennsylvania ruled that an insurance policy issued by Federal Insurance Co. excluded coverage for the transmission of $1.3 million by the insured in response to an email request from a hacker purporting to be one of the insured’s business partners. The insured, Construction Financial Administration Services (CFAS), was a third-party construction funds administration company that disbursed funds for contractors whose ... Keep Reading »
Florida Federal Court Derails Railway’s Coverage Suit Due to Prejudicial Two-Year Notice Delay
While Amtrak is in the business of providing on-time railway services to millions of passengers each year, the corporation’s two-year-plus delay in tendering defense to its insurer following a South Florida railway accident put it off track in a summary judgment order in the Middle District of Florida. On March 26, 2022, the federal court held that Amtrak’s notice to the insurer was not timely and that the carrier was prejudiced by the late notice. West Palm Beach Train ... Keep Reading »
Florida Federal Court Affirms Insurer’s Denial of Hurricane Irma Claim Reported More Than Two Years Late
The U.S. District Court for the Southern District of Florida granted a motion for summary judgment in favor of the insurer in LMP Holdings v Scottsdale Insurance Co., holding that the insurer was prejudiced by the insured’s delayed reporting of the claim. The matter concerned a Hurricane Irma claim for a commercial property located in Miami-Dade County, Florida. The insurer, Scottsdale Insurance Co., issued LMP Holdings Inc., the insured, an all-risk commercial ... Keep Reading »
New York First Department Clarifies Effect of New York Insurance Law Section 3420 on Claims-Made-and-Reported Policies
In Certain Underwriters at Lloyd's London v. Advance Transit Co., a New York appellate court provided valuable clarity into how New York Insurance Law section 3420 applies to claims-made-and-reported insurance policies. Underwriters issued a claims-made-and-reported liability policy to Advance Transit Co., effective October 30, 2016, to October 30, 2017. The policy provided that if it were renewed, Advance would have an additional 60 days after the expiration of the ... Keep Reading »
Outlier Decision of New York Appellate Court Denies Insurer’s Right to Recoup Defense Costs Even Though Court Found No Duty to Indemnify
Recoupment of defense costs (defense fees and costs) by insurers in the absence of a duty to indemnify under a liability policy is an unsettled issue in many states. In a recent decision, a New York intermediate appellate court held that even though there was no duty to indemnify an underlying personal injury action under a CGL policy, the insurer could not recoup the defense costs it had advanced under a reservation of rights (ROR) letter where the policy at issue ... Keep Reading »
South Carolina Federal Court Finds No Coverage for Faulty Workmanship Damages Discovered Years After Occurrence-Based Policy Expiration
Potential Six-Year Delay in Notice of Flood and Mold Damage “Substantially Prejudiced” Insurer In Atain Specialty Insurance Company v. Carolina Professional Builders, LLC et al., 2:18-cv-2352-BHH (D.S.C. Oct. 2, 2020), a federal judge in South Carolina granted summary judgment to an insurer after finding that the record clearly supported that although flood and mold damages may have occurred during the policy period, that damage was distinct from the damage being ... Keep Reading »
Pennsylvania Court Ices General Reservation of Rights Letters: Insurers Must Specify “Emergent Coverage Issues”
In Selective Way Insurance Co. v. MAK Services Inc., the Superior Court of Pennsylvania reversed an insurer-favorable summary judgment after finding that its reservation of rights letter was insufficient. Following what appeared to be a standard slip-and-fall case, an insurer provided a defense under a reservation of rights to its insured — a snow and ice removal company. Astonishingly, the policy contained a snow and ice removal exclusion, barring coverage for bodily ... Keep Reading »