Michael Glascott, Author at The Insurance & Reinsurance Report

June 13, 2014 Policy Conditions, Considerations, Construction, and Formation

Superfund Site Results in $3 Million Coverage Row

An Oregon Judge required RLI Insurance to reimburse three other insurers more than $2.9 million in defense costs surrounding litigation over a Portland Oregon Superfund site. The other insurers defended Northwest Pipe Co. in its litigation over the Superfund site after Northwest’s facility was identified as part of the superfund site by the EPA and state departments. Northwest’s insurers expended money in the required investigation of the site and facility as well as the defense to claims brought by the EPA and state agencies.

Northwest …

April 29, 2014 Emerging Issues

TCPA Exclusion Upheld by the Eleventh Circuit

In a lawsuit brought by a distribution and marketing company, the policyholder sought coverage for a lawsuit alleging that it sent “unwanted ‘junk’ faxes in violation of the [Telephone Consumer Protection] Act.” The insurer denied coverage due to the exclusion concerning violation of statutes in connection with sending, transmitting or communicating any material or information.

The Eleventh Circuit affirmed the decision of the Middle District Court of Florida finding that the exclusion was not ambiguous or void as against public policy. Specifically, the Circuit Court …

March 27, 2014 Emerging Issues

Excess Carrier Has Equitable Subrogation Rights Against Primary Carrier For Not Settling Within Policy Limits

On September 19, 2007, claimant William Kelly was injured while descending a stairway in Hawthorne, California. Kelly sued F. H. Paschen, Inc., the general contractor for a construction project on the stairway.

In the ensuing declaratory judgment action, Paschen’s excess carrier, Westchester Fire Insurance Company (Westchester), alleged that Paschen’s primary insurer, Zurich American Insurance Company (Zurich), failed to notify Westchester of the litigation and failed to settle the underlying case within the $1 million primary policy limits. Westchester sought to recover $700,000 it paid on …

February 11, 2014 Policy Conditions, Considerations, Construction, and Formation

Insurer Reforms Policy to Avoid Coverage for Police Officer

The insurer was allowed to reform its policy to exclude coverage for law enforcement after a police officer was involved in an altercation with two town residents. The Eighth Circuit held the inadvertent failure to include a law enforcement exclusion was a mutual mistake and the policy would be reformed to reflect the parties’ true intentions.

The insurer issued a commercial insurance policy to a property owners’ association, and both the insurer and the association intended for the policy to exclude coverage for law enforcement. …

February 10, 2014 Emerging Issues

N.Y. Attorney General, EmblemHealth Reach Settlement Over Continuation Coverage

In a press release, Attorney General Eric Schneiderman announced that his office had conducted an investigation into widespread violations of New York’s Age 29 Law, which requires health insurers to offer young adults continuation health coverage on their parents’ policies until they turn 30. Following the investigation, a settlement was reached with the health insurer requiring it to reinstatement health coverage to more than 8,000 young adults whose coverage was wrongly terminated, and to pay approximately $90,000 in denied claims.

The federal Affordable Care Act …

January 22, 2014 Emerging Issues

40-Love. Contractual Liability Exclusion Inapplicable in Tennis Court Construction Defect

On certified questions from the Fifth Circuit, the Texas Supreme Court limited the scope of the contractual liability exclusion to situations where the liability is enlarged beyond its duty to exercise ordinary care in fulfilling its contract. In this matter, the policyholder contracted to construct certain additions to a school, including a tennis court. The contract required the policyholder to perform the work in a good and workmanlike manner. The tennis court was unusable for its intended purpose and the policyholder was sued. Its carrier …

November 21, 2013 Policy Conditions, Considerations, Construction, and Formation

Written Construction Contract Clarifies Competing Additional Insured Endorsements

The plaintiff, Lamp Incorporated (Lamp), brought a declaratory judgment action against Navigators Insurance Company (Navigators), seeking a declaration that Navigators breached its duty to defend Lamp in an underlying personal injury lawsuit stemming from a construction site accident (underlying lawsuit). Navigators filed a third-party complaint against West Bend Mutual Insurance Company (West Bend) seeking a declaration that West Bend, and not Navigators, provided primary, non-contributory coverage to Lamp and owed the duty to defend Lamp in the underlying lawsuit. Navigators also sought a declaration that …

November 6, 2013 Policy Conditions, Considerations, Construction, and Formation

Southern District Finds Coverage Despite Competing “Other Insurance” Clauses

United Parcel Service, Inc. (UPS) brought a declaratory judgment action against Lexington Insurance Company (Lexington) seeking a declaration that Lexington was obligated to defend and indemnify UPS in an underlying personal injury action.

UPS entered into a Guard Services Agreement (GSA) with Adelis for uniformed guards. The GSA required Adelis to carry commercial general liability insurance coverage, naming UPS as an additional insured, and requiring Adelis to defend and indemnify UPS against claims arising from any act or omission by any Adelis employee, or any …

October 30, 2013 Emerging Issues

Both Parties Agree – Delay NFIP Rate Hikes

In a time when bipartisanship appears to be fleeting, both parties have unveiled legislation designed to delay the National Flood Insurance Program(NFIP) rate hikes mandated under the Biggert-Waters Flood Insurance Reform Act of 2012.

In May 2013, Senator Mary Landrieu, D-LA, introduced a Senate bill delaying the rate hikes. However, the legislation which has been unveiled and will soon be introduced, appears to be a coordinated effort on the part of members of both parties in both chambers. On key sponsor in the …

October 23, 2013 Emerging Issues

No Coverage for $21 Million in Stolen Escrow Funds

A condominium project developer won a $21 million judgment against Coastal Title Services Inc., when Coastal misappropriated escrow deposits of prospective condo tenants. Coastal’s attorney failed to notify its insurer of a case against it, and later ended up in prison in connection with the missing funds. The court found the failure to notify the insurer let the insurer off the hook for providing any coverage.

A developer and Coastal were partners on a condominium project. A prospective tenant sued the developer for its escrowed …