Paul C. Steck, Author at The Insurance & Reinsurance Report

June 18, 2014 Environmental

Insurers’ Disclaimer Involving Environmental Damage Not Subject To Insurance Law §3420(d) Notice Requirements

This environmental coverage action involved a dispute over whether the insurers had a duty to provide coverage for the remediation of environmental damage at several manufactured gas plant (MGP) sites formerly owned by Long Island Lighting Company (LILCO) and the timeliness of the excess insurers late notice defense asserted as an affirmative defense in its answer. Defendants issued excess insurance policies to LILCO that required, as a threshold condition for coverage, LILCO to provide prompt notice of any occurrence that potentially implicated defendants’ duty of …

May 14, 2014 Emerging Issues

Preemptive Power Shutdown From Hurricane Sandy Was Not A Covered Business Interruption Claim

This coverage action arises from the widespread power outages that occurred in and around New York City during and after Hurricane Sandy. On October 29, 2012, in anticipation of storm-related flooding, utility provider Consolidated Edison Co. of New York, Inc. preemptively shut off power to certain of its service networks to preserve the integrity of the utility system. As a result, the plaintiff, a law firm, was without power at its lower Manhattan office for several days. The firm filed a claim under its property …

April 17, 2014 Environmental

Carbon Monoxide Poisoning Deemed Traditional Pollution Precluding Coverage Under Policy’s Pollution Exclusion

This environmental coverage action involved a Church pastor and his wife’s exposure to carbon monoxide from the Church’s heating system resulting in the death of the pastor, and the court’s interpretation as to the application of the policy’s pollution exclusion. Specifically, the insurer commenced a declaratory action seeking a determination that the policies’ pollution exclusions precluded any duty to defend or indemnify the Church with respect to the pastors’ estates’ claims and issued a reservation of rights denying coverage on the basis of those exclusions.…

March 7, 2014 Environmental

Insurer Prevails On Applicability Of Pollution Exclusion – Release Not Sudden or Accidental

This environmental coverage action arises out of the historic contamination of a parcel with various solvents and toxic waste disposed in unlined pits at the property. Specifically, Northrop acknowledges using the property, which later became known as Bethpage Community Park (BCP), for the disposal of sludge from an on-site industrial wastewater treatment plant and from waste oils that contained residual amounts of TCE, other solvents and PCB’s since 1948.

Later, in the 1960’s, the company donated the property to the Town of Oyster Bay and …

February 26, 2014 Environmental

Et Tu, Neighbor?: Multiple Carbon Monoxide Injuries in Apartment Complex Deemed A Single Occurrence

This environmental coverage action arises out of a carbon monoxide exposure and poisoning of multiple tenants in an apartment complex serviced by a gas boiler furnace located in the basement of the unit.

A declaratory suit was initiated against the complex owner and the insurer seeking a declaration that claimants are entitled to a separate occurrence limit and that the damages sustained by each group of tenant plaintiffs constituted separate occurrences under the policy. Here, the subject policy defined “occurrence” as “an accident, including continuous …

November 25, 2013 Environmental

Environmental Testing Costs Not Part Of Indemnity Agreement

This environmental action involves the interpretation of the scope of an indemnity agreement involving the costs of environmental testing on property contaminated with percholorethylene (PCE) in a real property transaction.

Cadlerocks entered into a loan in the principal amount of $1,925,000. The note was secured by a mortgage, along with a separate Environmental Indemnity Agreement. Cadlerocks failed to make the payment on the balloon balance due on the note and defaulted on the note causing the Trust to commence foreclosure proceedings.

The original lender conducted …

November 11, 2013 Environmental

Court Intervenes To Stay Arbitration Before Final Award

This arbitration/reinsurance action arises from the plaintiff’s request for injunctive relief to enjoin further arbitration proceedings as a result of questions concerning the potential breach of a provision in the reinsurance contract between the parties that required that disputes be submitted to three arbitrators who are not under the control of any party to the agreement.

Specifically, plaintiffs contended that this provision was breached when defendant counsel participated in prohibited ex parte communications with a member of the arbitration panel. The plaintiffs also maintained this …

October 14, 2013 Environmental

No Coverage Available For Lead Paint Related Injuries

This coverage action arises from a dispute regarding the applicability of a total pollution exclusion contained in a commercial general liability policy. The insurer, Cumberland, relied on the exclusion in denying coverage for a suit involving alleged negligent removal of lead paint from a residence causing injury to a child. The plaintiff asserted that the subject total pollution exclusion does not apply to lead-based injuries that are not traditional environmental contamination.

Cumberland denied coverage for the underlying suit based on the total pollution exclusion advising …