When liability insurers have reasonable questions about coverage, courts traditionally encourage them to defend their insureds, subject to a reservation of rights. E.g., Drawdy v. Direct Gen. Ins. Co., 586 S.E.2d 228 (Ga. 2003) (“[b]y acting in this manner, the insurer eliminates any detriment to the insured …”). But the decision to reserve can have serious, negative consequences for the insurer. In some states, a reservation is deemed to create a conflict between ... Keep Reading »
Arkansas Court Finds Extension of Coverage for Contingent Time Element includes Contingent Extra Expense
All risk insurance policies typically provide coverage for loss of or damage to the insured property unless otherwise excluded. Coverage is provided for physical damage, as well as resulting business interruption losses. Such policies sometimes also include coverage for loss resulting from damage to property that wholly or partially prevents a supplier from providing goods to the insured. This coverage is referred to as Contingent Time Element coverage. In Lion Oil ... Keep Reading »
After Pit Bull Case, Questions Dog New York’s “Unfortunate Event” Test
Where an insurance policy contains a “per occurrence” limit on coverage, New York courts apply what they call the “unfortunate event” test to determine how many “occurrences” are involved in a given claim or set of claims. The test does not apply at all, however, where the policy language indicates “an intent to aggregate separate incidents into a single occurrence.” As this blog recently discussed, the U.S. Court of Appeals for the Second Circuit ruled in September ... Keep Reading »
Arise and Exclude: Artful Pleading Fails to Circumvent Contractual Liability Exclusion
Awake, arise or be forever fall'n. - John Milton It's not uncommon for plaintiffs to couch their pleadings in terms that attempt to avoid exclusions in defendants' liability coverage. The plaintiffs in Bond Safeguard Ins. Co. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. 14-15233 (11th Cir. Oct. 5, 2015), appear to have had this goal in mind when they sought to recover payments it had made under certain surety bonds. The plaintiffs sued for negligence, but ... Keep Reading »
No Contractor Is An Island: Florida Court Narrowly Applies “Your Work” Exclusion
When an insurer issues a Commercial General Liability policy to a contractor, the policy typically excludes coverage for the cost of repairing or replacing the contractor's own defective work, but covers the cost of repairing damage to other parts of the property which the defective component might cause. As this blog has explained, the "your work" exclusion serves to distinguish a liability policy from "a performance bond or warranty of a contractor's product." But ... Keep Reading »
As TCPA Class Actions Soar, Issues Emerge in TCPA Coverage for Claims
Both the number of cases under the Telephone Consumer Protection Act (TCPA) and the types of practices that those cases challenge have mushroomed within the last several years. Yet a dedicated form of insurance against TCPA claims has not yet developed. Instead, businesses seeking defense and indemnification of TCPA suits have resorted to traditional policy provisions dealing with property damage, personal and advertising injury, and (more recently) the language of ... Keep Reading »
Second Circuit’s Policy Language Interpretation Leaves Insurer Down in the Dumps
So this dump truck can’t make it through an overpass on I-90; the crash knocks the dump box off the truck and into the road. Five minutes later (or 30 seconds, if you believe some people), along comes Mr. Itzkowitz, with his wife and five children, and plows right into the dump box. Then, after another few seconds (or 20 minutes, according to some people), ka-pow: Mr. Compton’s car, with another six passengers, does the same thing. What are you gonna do? In National ... Keep Reading »
Wall-to-Wall Ads: Florida Court’s Broad Definition of “Advertisement” Expands Scope of Advertising Injury Coverage
“Advertising injury” can be tricky. In theory, the term applies to the type of harm that can be inflicted through advertising media—defamation, disparagement, violation of privacy rights or misappropriation of intellectual property. Because trademark infringement injures plaintiffs in a different way, trademark claims are generally excluded from coverage—except where the insured has used an infringing text or trade dress in an advertisement. That wrinkle makes it ... Keep Reading »
Additional Insureds Deserve Attention Too: New York Court Finds Insurer’s Reservation of Rights to Named Insured Did Not Constitute Notice to Additional Insured Under § 3420(d)(2)
Liability insurers issuing or delivering policies in New York are well apprised of the statutory requirement that the insured is to be provided written notice of a disclaimer or denial of a bodily injury or death claim “as soon as is reasonably possible.” N.Y. Ins. Law § 3420(d)(2). Also well-known is that an insurer may face severe consequences from delaying issuance of a disclaimer on a ground that is known to be valid, while still investigating other possible grounds ... Keep Reading »
“Contractor?” I Do Not Think That Employers’ Liability Exclusion Means What You Think It Means
Over the summer, this blog reported on how the Supreme Court of Pennsylvania managed to parse an employer's liability exclusion to find that it did not exclude claims by employees of additional insureds. As the leaves started to turn, the U.S. Court of Appeals for the First Circuit put an employer's exclusion under a similar microscope. In United States Liab. Ins. Co. v. Benchmark Constr. Svcs., Inc., No. 14-1832 (1st Cir. Aug. 12, 2015), a case arising out of a home ... Keep Reading »
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