General Archives - Page 3 of 4 - The Insurance & Reinsurance Report

October 11, 2019 General / Uncategorized

Washington State Supreme Court Holds That Insurance Adjusters Cannot Be Liable for Bad Faith

In a highly anticipated decision, the Supreme Court of Washington closed the door on statutory bad faith claims against insurer-employed adjusters. The case is Moun Keodalah and Aung Keodala v. Allstate Insurance Company, Tracey Smith., and John Doe Smith, — P.3d – (2019, 2019 WL 4877438 (Wash. Oct. 3, 2019).

The case arose out of a 2007 accident, when an uninsured motorcyclist struck the plaintiff’s truck, killing the motorcyclist and injuring the plaintiff. The police investigated the collision and determined the motorcyclist had …

September 25, 2019 General / Uncategorized

Illinois Federal Court Refuses to Extend NY Insurance Law 3420 to Policy Not Issued or Delivered in New York

An Illinois federal district court in Frankenmuth Mutual Insurance Company v. The Hockey Cup, LLC held that an insurer was excused from its defense obligations due to late notice, since the court found that New York Insurance Law Section 3420(a)(5)’s requirement that insurers show prejudice to deny coverage based on late notice did not apply because the policy was not issued or delivered in New York.

The underlying lawsuit, in which the National Hockey League was one of the plaintiffs, alleged the insureds, A&R Collectibles, …

June 10, 2019 Excess Insurance / General / Other Insurance

Fifth Circuit: False Imprisonment Caused “Bodily Injury” During Subsequent Policy Periods Sufficient to Trigger Coverage

In a notable deviation from decisions across the country, the Fifth Circuit recently ruled that injuries from false imprisonment could be sustained after the actual false imprisonment itself ended, triggering two insurers’ duty to defend. Travelers Indem. Co. v. Mitchell, No. 17-60291, 2019 WL 2276694 (5th Cir. May 29, 2019).

The insurers, whose policies did not come into existence until after the false imprisonment ended, were found obligated to defend a Mississippi County in a civil rights lawsuit stemming from the wrongful conviction of …

April 24, 2019 General

Can You Depreciate Labor? Tennessee Supreme Court Says No.

When calculating the actual cash value (ACV) amount of property damage, the labor component cannot be depreciated according to the Tennessee Supreme Court in a unanimous decision answering a certified question. Lammert, et. al v. Auto-Owners (Mutual) Ins. Co., 2019 WL 1592687 (Tenn. April 15, 2019).

At issue were two homeowner policies, one policy which contained a definition of ACV and the other which did not, but neither policy explicitly stated whether labor costs were included within the scope of depreciation. While it was …

April 23, 2019 Emerging Issues / General

ALI’s Restatement of Liability Insurance Advocates a “Split-the-Baby” Approach to Allocation of Long-Tail Claims

“All sums” or “pro rata” – which one is the majority view for allocation of long-trail claims? Well, after eight years of iterative revision, the proposed final draft no. 2 of ALI’s Restatement of the Law, Liability Insurance was approved in May 2018. The restatement has received very critical feedback from both sides, chiefly that the ALI has abandoned its mission to “restate” common law in favor of advocating what the law should be. One of the more hotly contested sections is section 41, titled “Allocation …

March 19, 2019 Emerging Issues / General / Other Insurance

South Carolina High Court Allows Malpractice Claim by Insurer Against its Assigned Defense Counsel

Early March, in a narrow, carefully worded opinion, a divided Supreme Court of South Carolina ruled that a liability insurer may sue an attorney it retained to defend its insured where the attorney’s breach of its duty to the insured proximately causes the insurer damage. The decision adds South Carolina to the growing list of states that recognize a malpractice cause of action by an insurer against its assigned defense counsel. See Sentry Insurance Co. v. Maybank Law Firm, LLC, — S.E.2d —, 2019 WL 1119977, at …

March 15, 2019 General

Injured Employee Triggers Additional Insured Coverage

While awaiting the Appellate Division’s decision in M & M Realty of New York LLC v. Burlington Ins. Co., No. 153949/16, 2019 WL 1028971 (1st Dept. Mar. 5, 2019), we discussed the New York Supreme Court decision in a post in January. Last week the first department finally weighed in.

Recall that the coverage dispute arises out of an underlying bodily injury case to an employee of L&M, which was hired by owner M&M to work on a project. M&M sought additional insured coverage …

February 27, 2019 General / Industry News

Fourth Circuit Holds that Insured Must Strictly Comply with Notice Conditions

The U.S. Court of Appeals for the Fourth Circuit, applying South Carolina law, recently held that an insurer had no duty to indemnify its insured for a default judgment on late notice grounds because the court found that the insured’s forwarding to the insurer’s agent of a notice of representation letter by the claimant did not constitute notice to the insurer of a lawsuit later filed by the claimant. Founders Ins. Co. v. Richard Ruth’s Bar & Grill LLC, No. 17-1282, 2019 WL 852137 …

February 13, 2019 General

Courts Continue to Raise the Bar for ROR Letters

Recently, it seems like courts are finding reservation of rights (ROR) letters to be ineffective, more often than not. Such was the case when the District Court for the Northern District of Georgia, applying Georgia law, held that an insurer that defends its insureds before reserving rights is estopped from later denying coverage. While this may seem obvious, the facts giving rise to the court’s decision are so common that this case should give us pause.

Recently, it seems like courts are finding reservation of …

February 12, 2019 General

10th Circuit Holds that the Phrase “That Particular Part” in a CGL Policy’s “Damage To Property” Exclusion is Ambiguous

Noting the inconsistent treatment given to the “Damage To Property” exclusions commonly found in standard commercial general liability coverage forms, the United States Court of Appeals, Tenth Circuit, applying Oklahoma law, has held that the phrase “that particular part” in the exclusion is ambiguous.

In MTI, Inc. v. Employers Insurance Company of Wausau, No. 17-6206, — F.3d —, 2019 WL 321423 (10 Cir. 2019), an insured contractor, MTI, Inc. (MTI) was retained by Western Farmers Electrical Cooperative (WFEC) to remove and replace anchor bolts …