We previously described here proposed New Jersey legislation that would also compel coverage of business interruption claims based on COVID-19 losses. The New Jersey bill was voted out of the New Jersey Assembly’s Homeland Security and State Preparedness Committee but continues to be the subject of negotiation among insurance industry representatives and the bill’s sponsors. Ohio, Massachusetts, and now New York have since followed New Jersey’s lead, introducing bills ... Keep Reading »
Business Interrupted: Policyholders Seek to Avoid the “Direct Physical Loss or Damage” Requirement for Business Interruption Insurance in the Wake of the COVID-19 Pandemic
The COVID-19 pandemic has swept the world, altering every aspect of daily life — whether it be a morning trip to the gym, a day at the office, a dinner at the Italian restaurant across the street, or a Friday night concert in the park. Businesses, particularly those in the service sector, have halted or restricted their operations, either voluntarily or by government order, in an effort to curb the spread. In these uncertain times, many businesses want to seek coverage ... Keep Reading »
New Jersey Proposes Bill That May Require Insurers to Cover COVID-19 Business Interruption Losses
As the United States faces a surge in confirmed cases of COVID-19, New Jersey is proposing a bill that would require property insurers that cover risks in New Jersey to pay for business interruption losses due to the disease, despite their policies expressly excluding coverage for losses due to viruses or bacteria. The law, which would take effect immediately and be retroactive to March 9, 2020, is aimed at reducing the financial impact of the coronavirus on New Jersey’s ... Keep Reading »
Ransomware Attack Replacement Costs Are Covered “Direct Physical Loss or Damage” Under Standard Business Owner’s Policy, According to Maryland Federal Court
A Maryland federal court recently weighed in on the still-murky world of insurance coverage for cybersecurity losses, finding replacement costs necessitated by a ransomware attack were “direct physical loss or damage” to a computer system within the meaning of a business owner’s policy. Even as insurers continue efforts to develop cyber insurance products, National Ink demonstrates potential exposure to carriers under existing non-cyber ... Keep Reading »
Flooded: Court Finds “Named Windstorm” Coverage, and Not Flood Sublimit, Applies to Superstorm Sandy Water Damage Claim
When the National Weather Service names a storm heading in your direction, you know to expect wind and water. This can create a quandary for property insurers. Is water damage from a named windstorm caused by the flood or the storm? This distinction can mean millions. In New Jersey Transit Corp. v. Certain Underwriters at Lloyd's London, a three-judge panel from the Superior Court of New Jersey held that the New Jersey Transit Corp. was entitled to $400 million in ... Keep Reading »
Florida Court Holds Carrier’s Basis for Botched $149K Ferrari Payment Defied “Common Sense”
A familiar dispute between a carrier and a third party involves the third party’s attacking the language of the insurance contract and arguing in favor of an interpretation not reflected by the plain meaning of the text. But in a recent opinion by a Florida appellate court, World Finance Group LLC v. Progressive Select Insurance Co., it was the third-party lienholder that benefitted from the “plain meaning” of the text. This case stemmed from a March 2014 accident ... Keep Reading »
Massachusetts High Court Upholds Consent-to-Settle Provision, Protecting Insurer Who Did Not Have the “Final Say”
The Supreme Judicial Court of Massachusetts recently heard an appeal regarding a particularly obstinate insured, ruling that recognition of a consent-to-settle provision does not in and of itself violate an insurer’s duties under Massachusetts’ claim settlement practices statute. Specifically, in Rawan v. Continental Casualty Co., the court held that Continental was not in violation of Massachusetts General Laws chapter 176D, section 3(9)(f), which mandates that an ... Keep Reading »
New York Appellate Court Affirms Denial of Discovery Into Other Hurricane Sandy Claims
In Knickerbocker Village Inc. v. Lexington Insurance Co., New York's Appellate Division, First Judicial Department, dictated a clear rule for single-insured cases regarding the discovery of an insurer's treatment of insurance claims brought by other similarly situated insureds: that information is not "material and necessary" and thus not discoverable under section 3101 of the New York Civil Practice Law and Rules. This case arose out of a disagreement between ... 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 »
Insured’s Leaky “Abrupt” Interpretation of All-Risk Insurance Collapses Under Eleventh Circuit Scrutiny
In S.O. Beach Corp. v. Great American Insurance Company of New York, No. 18-1967 (11th Cir. Oct. 31, 2019), the Eleventh Circuit affirmed the district court’s grant of summary judgment in full to the insurer, finding there was no ambiguity in the all-risk policy’s definition of a “collapse” as “an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its intended purpose” ... Keep Reading »
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