As we have reported, an assignment of benefits (AOB) is a legal tool that allows a third party, like a contractor, to be paid for services performed, like repairs following an insured loss, for an insured property owner who would normally be reimbursed by the insurance company directly after making a claim. Most AOBs allow the contractor to stand in the shoes of the property owner for insurance collection purposes. Such post-loss assignments are enforceable in most ... Keep Reading »
Professional Services Exclusion Precludes Coverage for False Claims Act Suit
It is not unusual for a directors and officers liability policy to have an exclusion for professional services. A such, a question often arises regarding whether the claimed wrongful conduct involved the rendering or failure to render professional services in a particular context. In HotChalk, Inc. v. Scottsdale Ins. Co., No. 16-17287 (9th Cir. June 4, 2018), the Ninth Circuit found that coverage was precluded for a False Claims Act suit because the insured’s ... Keep Reading »
An Absolute Pollution Exclusion: Reading the ‘Fine’ Print
A federal judge recently relied on a pollution exclusion to find that Great American Insurance Company was not obligated to cover losses associated with the unintended distribution of rock fines into New Jersey’s Spruce Run reservoir. In Great American Ins. Co. v. ACE American Ins. Co., No. 4:18-CV-114-A (N.D. Tex. Jul. 10, 2018), the Northern District of Texas examined the scope of an absolute pollution exclusion and found that it applied to bar coverage, despite the ... Keep Reading »
Common Sense Prevails Over Dictionary Definitions: Rolling Trash Bins Are Not ‘Vehicles’ Judge Explains
A federal judge recently refused an insured’s attempt to escape a policy exclusion by contending that a large “storage bin” on wheels was a “vehicle” under an exception to the exclusion, which prohibited coverage for costs associated with gas system tests. In 1070 Park Ave. Corp. v. Fireman’s Fund Ins. Co., No. 17 CIV. 2474 (CM) (S.D.N.Y. June 19, 2018), appeal docketed No. 18-1961 (2d Cir. June 29, 2018), the judge ruled that the storage bin was not a “vehicle” as that ... Keep Reading »
New Opinions From Second and Sixth Circuit Courts Rock Phishing Loss Coverage Landscape
On July 6, the Second Circuit Court of Appeals set off some fireworks in the insurance coverage litigation field when it found coverage for a “social engineering”/phishing scheme loss, bucking the trend among its sister courts. The appellate court affirmed a Southern District of New York decision that had been a relative outlier, finding coverage under a crime/fidelity policy for a scheme where fraudsters used spoof emails to trick company employees into changing wiring ... Keep Reading »
Defining ‘Logical Connection’: NC Federal Court Tackles ‘Related Claims’
Insurance carriers and policyholders often argue about the scope of policy provisions. Generally, policyholders take an expansive view of insuring agreements, while carriers often construe them more narrowly. But not all coverage arguments follow these familiar lines. Take, for instance, the “related claims” debate. Most third-party liability policies contain aggregation language. Such policies deem “related claims” to be a single claim “first made” when the first ... Keep Reading »
To Defend or Not to Defend? Northern District of Ohio Provides Guidance for Determining Whether to Defend an Arbitration
While the rules for determining whether a liability insurer has a duty to defend a lawsuit are generally well-known, questions can arise when an insurer is asked to defend an arbitration. For example, can an insurer’s duty to defend be determined by looking solely at the initial request for arbitration even if that document is not required to fully clarify the claims asserted and damages sought? According to the Northern District of Ohio’s decision in Maxum Indemnity ... Keep Reading »
The Sentinel Strike: The Hartford’s Gift to New York Insurers in the War to Stop Policyholder Experts from Claiming Ambiguities Exist in Clear Policy Exclusions
In this age of exponentially increasing technology, we can rely on one certainty in property casualty jurisprudence – that is, bold policyholder assertions supported by even bolder “expert” opinions. In BF Advance, LLC v. Sentinel Insurance Company, No. 16-cv-5931 (E.D.N.Y. Mar. 20, 2018), decided in New York federal court this past March, the policyholder argued that a CGL policy’s Software Exclusion does not apply to injuries caused by software, and hired an insurance ... Keep Reading »
Eleventh Circuit Applies Realignment Doctrine to Undo Years of Coverage Litigation Between Primary and Excess Insurers
In St. Paul Fire and Marine Insurance Co. v. National Union Fire Insurance Co. of Pittsburgh, PA, No. 16-12015 (11th Cir. May 29, 2018), a battle between excess and primary carriers, the Eleventh Circuit applied the so-called “realignment doctrine” to long-running coverage litigation and held that the district court never had jurisdiction over the matter in the first place. The underlying dispute arose out of several explosions at an Imperial Sugar Co. refinery in ... Keep Reading »
An Expert Is Only as Good as His Actual Experience
Experts are often used to address issues of causation and scope of damages in insurance coverage matters. It is well established, however, that an expert must be qualified through specific training or actual experience. Without such training or experience, a purported expert’s affidavit may not be sufficient to create an issue of material fact sufficient to defeat summary judgment. Such was the lesson in Superhost v Selective Ins (NY App 2018-04-12), Case No. 525034 (NY ... Keep Reading »
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