Insurers Not Liable To Third-Party Beneficiaries to a Homeowners’ Insurance Policy for Property Damage as a Result of Migration of Oil

The New Jersey Supreme Court considered whether the plaintiffs’ claims for private nuisance and trespass, in an action for damages resulting from the migration of heating oil from an underground storage tank on a neighboring property, were properly dismissed in Ross v. Lowitz, et al., No. A-101-13 (N.J. Aug. 6, 2015). In the same matter, however, the court also considered whether the plaintiffs could maintain claims as third-party beneficiaries against the insurers that provided homeowners’ coverage to the former and current owners of the …

Continue Reading

Malicious Prosecution and Trigger of Occurrence Based Coverage

In Selective Ins. Co. v. RLI Ins. Co., 2015 U.S. Dist. LEXIS 90572 (N.D. Ohio July 13, 2015), a coverage dispute arose after an individual who, following his exoneration from a criminal conviction for rape and murder, sued the municipality who had pursued the criminal case against him. During the relevant time period, the municipality held successive one year policies with two primary insurers and two excess insurers. The first excess policy ran from policy 1997 -1998 and the second ran from 1998-1999.…

Continue Reading

Exceptional Circumstances are Required for Relief in a Claim for Bad Faith

In a favorable decision to insurers on the issue of bad faith, the New York Northern District was recently called upon to determine whether an insured under a Homeowner’s policy had stated a viable cause of action. In Ripka v. Safeco Ins., 2015 U.S. Dist. LEXIS 67595 (N.D.N.Y May 26, 2015), the District Court made it clear that New York courts will not, except in very limited circumstances, award tort and punitive damages in addition to contract damages against insurers who deny claims.

Following …

Continue Reading

Breach of Reinsurance Contract and Bad Faith Claims Survive Dismissal, District Court Rules

In Old Republic National Title Insurance Co. v. First American Title Insurance Co., 2015 U.S. Dist. LEXIS 44693, the U.S. District Court for the Middle District of Florida refused to dismiss portions of a cedent’s breach of contract claim, bad faith claim, and demand for declaratory judgment against a reinsurer. The reinsurance dispute arose when a cedent negotiated a $41 million settlement with the underlying insured, and the reinsurer paid its portion of the claim under a reservation of rights. After making its payment, …

Continue Reading

Second Circuit Finds No Coverage Based on Late Notice Issue To a Reinsurer

The U.S. Court of Appeals for the Second Circuit affirmed a district court’s ruling that late notice, alone, was sufficient to defeat a cedent’s claim. In Granite State Insurance Co. v. Clearwater Insurance Co., No, 14-1494-cv, 2015 WL 1474605 (2d Cir. Apr. 2, 2015), the court was forced to determine whether Illinois law on late notice to a reinsurer was settled, or if it should instead apply New York’s prejudice requirement.

Granite State Insurance Company, the cedent, settled a large number of asbestos-related personal …

Continue Reading

1st Circuit is “Honorably Engaged” by Reinsurance Arbitration Award

In First State Insurance Co. v. National Casualty Co., No. 14-1644, 2015 WL 1263147 (1st Cir. Mar. 20, 2015) the U.S. Court of Appeals for the First Circuit addressed a motion to vacate an arbitration award related to multiple reinsurance and retrocessional agreements. The decision was the court’s first to address the operation and effect of a so-called “honorable engagement” provision in an arbitration clause.

The case arose out of multiple agreements between First State Insurance Company and New England Reinsurance Corporation (collectively “First State”) …

Continue Reading

After Hours: New Jersey Superior Court Holds Definition of Employee and Exclusion for Employee’s Criminal Acts Both to be Unambiguous

In Union Hill Supremo Pharmacy v. Franklin Mut. Ins. Co., No. L-705-13 (N.J. Super. Ct. App. Div., March 4, 2015) the Superior Court of New Jersey, Appellate Division decided that an insurance policy’s definition of “employee” was unambiguous. The court further held that a part-time employee fell within the definition of “employee” and that a policy exclusion based on an “employee’s” criminal acts applied even when the employee was not working at the time of the crime’s commission.

The insured, a pharmacy, incurred a …

Continue Reading

Third Circuit Affirms Denial of Reinsurance Contract Rescission

Munich Reinsurance America, Inc. (“Munich”) provided reinsurance coverage to Everest National Insurance Co. (“Everest”) on workers compensation claims.  Munich then sought reinsurance coverage for its own liability and did so from Continental Casualty Insurance Co. (“Continental”).  Eventually, the independent underwriter that represented Continental in the deal informed Munich that it no longer underwrote coverage for Continental.  At that time, the underwriter suggested replacing Continental with American National Insurance Company (“ANICO”).  Munich gave the underwriter the same files Munich received from Everest, but did not provide …

Continue Reading

Second Circuit Holds “Loss Expenses” Not Categorically Excluded from Liability Limit of Facultative Reinsurance Certificate

In Utica Mutual Insurance Co. v. Munich Reinsurance America, Inc., the Second Circuit Court of Appeals reversed and remanded a summary judgment determination against a reinsurer with regard to the reinsurer’s obligations to reimburse the insured’s claim expenses. Utica Mutual Insurance Company had issued an umbrella policy to Goulds Pumps, Inc. Utica incurred millions of dollars of losses under this policy due to asbestos-related litigation brought against Goulds. Munich Reinsurance reinsured Utica’s umbrella policy under a facultative reinsurance certificate that contained a $5 million …

Continue Reading

New Reinsurance Deskbook from Thomson Reuters and DRI Features Thomas Segalla as Editor, Seven Goldberg Segalla Contributors

Goldberg Segalla founding partner Thomas F. Segalla led the team of lawyers who wrote the inaugural edition of the Reinsurance Professional’s Deskbook: A Practical Guide, a new treatise co-produced by leading legal publisher Thomson Reuters and DRI – The Voice of the Defense Bar, the largest organization of defense lawyers in the country.

The Reinsurance Professional’s Deskbook is a comprehensive resource that explores in depth traditional insurance and reinsurance concepts as well as emerging trends in today’s insurance markets, with a focus on …

Continue Reading