It feels like a black swan event: last month, in GEICO Gen. Ins. Co. v. Harvey, No. 4D15-2724 (Fla. Ct. App. Jan. 4, 2017), a Florida appellate panel unanimously overturned a jury verdict, on the ground that the plaintiff’s bad faith claim was insufficient as a matter of law. A dissection of this rara avis can yield some insight into the limits of judicial tolerance for claims against insurers. The Fatal Accident On August 8, 2006, James Harvey and John Potts ... Keep Reading »
Minnesota Discovers Limits To Its Regulator’s Power Over Insurers
In Minnesota, the Commissioner of the Department of Commerce regulates the insurance industry, and he has a statutory right to conduct investigations “related to the duties and responsibilities entrusted to” him. Last month, in Matter of the Petition of the Property Casualty Insurers Association of America, Inc., 41 Minn. State Register 830 (Dec. 7, 2016), the state’s Office of Administrative Hearings took up the question of just what those “duties and responsibilities” ... Keep Reading »
Peerless, This is Not: Sixth Circuit Finds No Latent Ambiguity in Consent to Settle Requirement in Excess Policy
Disputes between policyholders and excess insurers often involve events that occurred before the underlying defense costs or indemnity payments reached the excess layer. In Stryker Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 842 F.3d 422 (6th Cir. 2016), reh’g denied (Dec. 13, 2016), the U.S. Court of Appeals for the Sixth Circuit addressed a situation where a policyholder settled a claim without obtaining the excess insurer’s consent to the settlement, ... Keep Reading »
Unlike Friendships, Policy Exclusions Are Not Severable In West Virginia
A homeowners insurance policy often covers every member of a family, and many policies state that the insurance applies separately to each insured. The same policies usually exclude coverage for intentional acts. But what happens when one insured is accused of negligently permitting a different, separately-covered family member to cause harm intentionally? Last month, in American National Property & Casualty Company v. Clendenen, No. 16-0290 (W. Va. Nov. 17, 2016), ... Keep Reading »
Eleventh Circuit Clarifies “Permanency” Requirement under Florida Bad Faith Statute
In Cadle v. GEICO Ins. Co., Case No. 15-11283 (11th Cir. Sept. 30, 2016), the Eleventh Circuit held that GEICO had not acted in bad faith when it failed to settle a claim after the insured did not provide any evidence of permanency during the cure period as is required by Florida law. With A Friend Like This… On July 2007, Catherine Cadle was rear-ended by Derek Friend, an underinsured motorist driving down I-95. Cadle had previously purchased insurance providing ... Keep Reading »
Florida Supreme Court Decides that Concurrent Causes Equal Coverage
It’s said that “defeat is an orphan,” but insurable losses often have multiple, concurrent causes. In some cases, one or more of those causes might be outside the scope of coverage, either by omission or exclusion. In Sebo v. American Home Assurance Company, No. SC14-897 (Fla. Dec. 1, 2016), the Supreme Court of Florida ruled that if damage results from “concurrent causes” and, as between the concurrent causes, an “efficient proximate cause” cannot be determined, it is ... Keep Reading »
Circuit Courts Restore Order to Question of Coverage for “Business Email Compromise” Schemes Under Fidelity Policies’ “Computer Systems” Fraud Rider
The financial services industry has long been on the forefront of technological advances in commerce. In the 1950’s, the Bank of America commissioned a consortium of Stanford scientists to develop one of the first commercial applications of the then-newly emerging field of “electronic brains” (aka “computers”). This effort resulted in ERMA (Electronic Recording Machine, Accounting), an automated system used for counting checks. Among other notable advances, this led to ... Keep Reading »
California Appellate Court Takes Equitable Subrogation to the Excess
In California, where a primary insurer is found to have unreasonably failed to settle within its policy limits, and a judgment is later entered against their insured in excess of those limits, the primary carrier can be liable to the insured for breach of an implied duty of good faith and fair dealing. And, where the insured’s excess carrier becomes liable for damages that exceed the limits of the primary policy as a result, that carrier may pursue an equitable ... Keep Reading »
Connecticut Workers’ Compensation Carriers May Pursue Justice
"He who does not punish evil commands that it be done.” -- Leonardo da Vinci Workers’ compensation statutes impose liability without fault on the employers of men and women who are injured on the job. They also permit employers to recoup the costs they incur from any third parties who actually caused the injuries through negligence or wrongful acts. But the liability of most employers is covered by insurance, and insured employers often have no incentive to prosecute ... Keep Reading »
What You Must Know about New York’s Proposed Cybersecurity Regulation for the Banking, Insurance, and Financial Services Sectors
Co-Authors: Josephine Cicchetti, Steven Blickensderfer Last week, New York’s Department of Financial Services released its long-awaited proposed cybersecurity regulation, which promises to deliver sweeping protections to consumers and financial institutions alike. The proposed regulation, titled "Cybersecurity Requirements for Financial Services Companies" (23 NYCRR Part 500), if implemented, would be a first-of-its-kind state provision that creates mandatory ... Keep Reading »
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