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 »
Eleventh Circuit Finds Claims-Made Policy’s “Correlating Claims” Provision Substantially Similar to “Related Claims” Provisions
In Datamaxx Applied Technologies Inc. v. Brown & Brown Inc., the Eleventh Circuit Court of Appeals affirmed the district court’s grant of summary judgment to the insurer, finding no merit in the insured’s argument that the analysis for construing a “correlating claims” provision differed substantially from the analysis in construing a “related claims” provision. In doing so, the Eleventh Circuit found that the insurer owed no duty to indemnify the insured for a claim ... Keep Reading »
Illinois Appellate Court Finds No CGL Coverage for Defective Elevator Suit
In the recent decision of Korte & Luitjohan Contractors Inc. v. Erie Insurance Exchange, the Fifth District Appellate Court of Illinois reaffirmed that, under Illinois law: (1) construction defects generally do not trigger coverage under commercial general liability insurance policies; (2) such policies generally do not cover the cost to repair construction defects or economic losses resulting from construction defects; and (3) parol evidence is irrelevant to the ... Keep Reading »
“Belt and Suspenders” Don’t Need Zip: Federal New York Court Rejects Timeliness Obligation for Optional Disclaimer
In Adirondack Insurance Exchange v. Banagos, the Eastern District of New York held that an insurer is not required to send a disclaimer letter where a loss does not fall within the scope of the insuring agreement and voluntarily sending a disclaimer letter, including one that discusses exclusions, does not create the obligation to send it in a timely manner. At issue in the case was a homeowners insurance policy that Adirondack Insurance Exchange issued in favor of ... Keep Reading »
New Jersey Federal Court Holds Virus Exclusion Bars Coverage for Car Dealerships’ COVID-19 Losses; Rejects Public Policy Argument Based on Pending Legislation
We previously described a proposed New Jersey bill that was introduced to the state assembly in March 2020 that would require insurers to cover business interruption losses related to the novel coronavirus pandemic. Almost a year later, the proposed bill has yet to be voted on by the legislature — and the stalled bill is causing significant roadblocks for policyholders who wish to rely on it to escape the application of virus exclusions in property insurance policies to ... Keep Reading »
Massachusetts High Court Rejects Insurance Company’s Application of “Physical Abuse” Exclusion to a Personal Injury Claim Involving One-Time Unintentional Contact
Insurance companies typically incorporate intentional harm exclusions into their homeowners’ insurance policies, which allow them to deny coverage where the insured intentionally causes bodily injury or property damage. Policies also often include an exclusion for physical abuse and molestation. However, as the Massachusetts Supreme Judicial Court held in Dorchester Mutual Insurance Co. v. Timothy Krussell et al., No. SJC-12856 (Mass. Aug. 13, 2020), an attempt by an ... 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 »
Minnesota Supreme Court’s First Opinion on the State’s Bad Faith Statute
The Minnesota Supreme Court in the matter of Alison Joel Peterson v. Western National Mutual Insurance Company, 946 N.W.2d 903 (Minn. 2020) opined for the first time on the state’s bad faith statute (Minn. Stat. § 604.18) and weighed in on the interpretation of the two prongs contained within the statute. The statute provides the following two prongs that must be determined for a court to award bad faith damages to an insured against the insurer: the absence of a ... Keep Reading »
A New Bad Faith Trend Emerges in COVID-19 Business Interruption Litigation
With governments across the world ordering the shutdown of restaurants, bars, and other “non-essential” businesses due to the COVID-19 pandemic, business interruption insurance claims are, not surprisingly, on the rise. While typical commercial property policies require “direct physical loss or damage” to property — a requirement that is unlikely satisfied by the shutdowns — policyholders are getting creative, alleging that the potential presence of the novel coronavirus ... Keep Reading »
Cybersecurity Awareness Month: Visits From the Ghosts of Claims Past and Claims Future
Cybersecurity awareness month is nigh upon us again, and thus perspective is in order. 2016 brought us the first collection and analysis of the nascent claims history of the burgeoning cyber-insurance market. On August 27, 2016, the National Association of Insurance Commissioners (NAIC) released its “Report on the Cybersecurity Insurance Coverage Supplement,” which provides helpful analysis of NAIC’s first data cull from insurers writing various forms of cyber coverage. ... Keep Reading »