In Mehic v. Allstate Property and Casualty Insurance Co., the U.S. District Court for the Northern District of Georgia determined that an insured did not satisfy a condition precedent to coverage under a homeowners policy — keeping the insurer apprised of the property’s occupancy — thereby finding that the insurer had no duty to provide benefits. Mehic arose after the insured’s home, which she had not inhabited full time in nearly three years, was damaged in a fire. ... Keep Reading »
Ninth Circuit Affirms Coverage Denial Based on Insured’s Unreasonable Expectations
In a brief opinion filed on December 3, 2021, in Atain Specialty Insurance Co. v. Dignity Housing West Inc., the Ninth Circuit Court of Appeals held that terms of coverage are limited by information contained in policy declarations and do not extend to risks not disclosed in the application. Oakland Apartment Fire In the early morning of Monday, March 27, 2017, a fire swept through a large, three-story transitional housing development in Oakland, California. The ... Keep Reading »
Florida Appellate Court Rejects Third Party’s Attempt to Rewrite Appraisal Clause in Property Insurance Policy
On November 10, 2021, Florida’s Fourth District Court of Appeal weighed in on a matter involving the interpretation of an appraisal clause for resolving disputes regarding the amount due for covered loss in First Call 24/7, Inc. v. Citizens Property Insurance Corp. In July 2018, Citizens Property Insurance insured a piece of property owned by the policyholder. The policyholder contacted First Call 24/7 Inc. to provide water mitigation services after her property ... Keep Reading »
Ninth Circuit Finds Refusal to Accept a Demand, Without More, Is Not a “Claim” Under Policy
On April 9, 2021, the Ninth Circuit Court of Appeals affirmed a lower court’s ruling that Starr Surplus Lines Insurance Co. need not provide coverage for Alorica Inc.’s loss from a 2018 phishing attack because the letter received from Alorica regarding the incident did not constitute a “claim” under Starr’s policy. The policy defined a “claim” as a “written demand for monetary or non-monetary relief.” Alorica contended that a letter from Express Scripts to Alorica, ... Keep Reading »
Arizona Supreme Court Finds That Reasonableness of Insurer’s Refusal to Consent to Settlement Under D&O Policy Is in the Eye of the Insurer
In Apollo Education Group Inc. v. National Union Fire Insurance Company of Pittsburgh, the Arizona Supreme Court found that the reasonableness of the insurer’s decision to refuse to consent to settlement under a directors and officers policy is determined from the insurer’s perspective — not that of the insured. Apollo stems from a multimillion-dollar settlement following litigation surrounding an education company’s practice of backdating stock options for corporate ... 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 »
Eleventh Circuit Finds Fuel Thefts Separated by “Time and Space” Constitute Separate Occurrences Needing Separate Deductibles Under Property Policy
A common issue arising in the interpretation of both liability and first party property policies is the determination of whether one or more “occurrences” are involved in any given claim or loss. The resolution of this issue can affect the applicable limit of the policy when the policy contains both a per occurrence and an aggregate limit. The issue also can arise in determining the applicable deductible or retention the insured must exhaust before any insurance under ... Keep Reading »
Don’t Lead Me On: Georgia Court of Appeals Finds Insurance Company Did Not Mislead Insured and Therefore Did Not Waive Policy’s Suit Limitation Provision
Insurance policies often contain "limitation-of-action" or suit limitation provisions, which contractually reduce the statute of limitations for an insured to assert a claim against an insurer. Depending on the state, such provisions can be enforceable because, as a general matter, parties are free to contract on whatever terms they wish, so long as they do not violate a particular statute or public policy. However, there are certain circumstances under which an insurer ... Keep Reading »
Florida Court Determines Insurer Did Not Waive Right to Appraisal in Hurricane Irma Claim Brought by Homeowners
Various homeowner’s insurance policies contain an appraisal clause that a carrier or insured may invoke in situations where there is a dispute in damages between the parties. However, a court may determine that a party who is seeking to invoke an appraisal clause has waived its right to appraisal by not invoking the appraisal clause timely, or by taking actions inconsistent with appraisal in litigation. In a recent opinion by a Florida appellate court, People’s Trust ... Keep Reading »
Ohio Appellate Court Rejects Policyholder’s Notice-Prejudice and Continuity of Coverage Arguments
Claims-made liability insurance policies typically require the policyholder to notify the insurer of a claim within a set amount of time — typically during the policy period, or within a specific period of time after the end of the policy period — to obtain coverage. When policyholders fail to do so, they often argue that the “notice-prejudice rule” should apply, such that the insurer can only deny coverage if it was prejudiced by the policyholder’s untimely notice. ... Keep Reading »