In an effort to curb the spread of the Coronavirus (COVID-19), federal, state and local governments are asking people to stay home. New Jersey, for instance, declared a state of emergency on March 9, 2020 and cities and townships have followed suit, imposing restrictions on local gatherings and business hours. Such mandates – and the general effort to flatten the curve – will impact small businesses as fewer people venture out and otherwise limit non-essential activities. In turn, businesses will suffer financial losses, some forced …Continue Reading
Category: Policy Conditions, Considerations, Construction, and Formation
Second Circuit Holds That Policy May Be Rescinded Before a Claim is Submitted for Coverage
The Second Circuit has held that an insurer need not wait until a claim is submitted under its policy in order to seek rescission of the policy based on a material misrepresentation by the insured. U.S. Underwriters Ins. Co. v. Orion Plumbing & Heating Corp., 18-2286-CV, 2019 WL 1253325.
The dispute arose under a policy issued in May 2012, which was later cancelled as a result of the insured’s failure to pay premiums. However, an incident involving bodily injury occurred prior to the policy’s …Continue Reading
Florida’s Statutory Sovereign Immunity Language Inserted Into Any Government Liability Policy Takes Precedence Over the Policy’s Definition of “Occurrence”
In Florida, as in most jurisdictions, government agencies may be subject to liability for tortious acts, with the recovery limit capped by law. A recent decision, State of Florida v. Barnett, explores the recent conflict regarding the limit of recovery against a state agency for an “occurrence” involving multiple claimants.
Section 768.28(5), Florida Statutes (2010), states in relevant part as follows:
Neither the state nor its agencies or subdivisions shall be liable to pay a claim or a judgment by any one person which exceeds …Continue Reading
Years Later, Hurricane Sandy Claims Still Present Unique Coverage Questions
The Second Circuit’s recent reversal of summary judgment involving a coverage dispute over a $50M Hurricane Sandy storm surge claim is an important reminder to always closely read the policy. At first blush, the policy in question was a seemingly standard all-risk commercial property policy that featured a flood exclusion and a separate windstorm or hail deductible endorsement. The coverage analysis in this case should have been straightforward – storm surge falls within the scope of the flood exclusion vitiating coverage – which is exactly …Continue Reading
What on Earth? Court Finds Ambiguous Property Appraisal Award for Earthquake Damage
The U.S. District Court for the Southern District of Illinois recently held that outstanding coverage issues and an ambiguous notation in an appraisal award precluded a finding that an insurer satisfied its coverage obligations. Windsor Oaks, LLC v. Cincinnati Ins. Co., No. 17-CV-689-SMY-SCW, 2018 WL 4303141 (S.D. Ill. Sept. 10, 2018).
The insured, a hotel owner, submitted to its insurer a property claim for earthquake damage. The insurer retained an engineering expert, who determined the hotel did not sustain earthquake damage. Accordingly, the insurer …Continue Reading
Pennsylvania Courts Continue To Bar To Coverage For Defective Workmanship Claims
Insurance coverage disputes regarding faulty workmanship construction defects are common throughout the United States. In Pennsylvania, under the Supreme Court’s 2006 decision in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., property damage claims arising out of poor workmanship are not covered under typical CGL policies.
Recently, the court of Appeals for the 3rd Circuit followed Kvaerner, and ruled that a subcontractor’s defective workmanship claim was not covered. In Lenick Constr., Inc. v. Selective Way Ins. Co., No. …Continue Reading
A Subpoena May Be a Claim if the Insured says It Is
Whether or not there is coverage under a D&O Policy to pay for expenses incurred responding to a governmental subpoena is a recurring question that nets an inconsistent answer from courts around the country. While the question is often fact specific, an Illinois Federal Court held that a D&O policy provided coverage for expenses incurred responding to a subpoena, and in fact, looked outside of the subpoena itself to make that finding. In Astellas US Holding, Inc. v. Starr Indem. & Liab. Co., Judge …Continue Reading
A Window Opens? Are Defective Product Construction Defect Claims Covered Under Pennsylvania Law?
A recent decision from a Pennsylvania court highlights tension in Pennsylvania law regarding whether a construction defect claim involving consequential damages caused by a defective product involves a covered “occurrence.” Sapa Extrusions, Inc. v. Liberty Mut. Ins. Co., 2018 WL 2045496 (M.D. Pa. May 1, 2018).
In this coverage action, the insured, a window frame manufacturer, sought a declaratory judgment that it was owed coverage for an underlying action brought by a customer that used the window frames to manufacture windows. The customer alleged …Continue Reading
Viking Pump’s Legacy: Virginia Court Holds “All Sums” Approach Applies to Excess “Quota Share” Layer Where Underlying Coverage was Exhausted
A federal judge in Virginia held the New York Court of Appeals decision in In re Viking Pump, Inc., 27 N.Y.3d 244 (N.Y. 2016) allowed for an insurer to apply an “all sums” allocation and seek the full limits of excess insurance policies — that formed part of a multi-year “quota share” layer — in a single year, without first establishing that the claims constituted a single loss or occurrence that is covered in whole or in part under another excess policy, and that …Continue Reading
Insurer Obligated to Provide Coverage for DWI Accident Resulting from Fundraising Event
In Philadelphia Indemnity Insurance Company v. Central Terminal Restoration Corp., 2018 WL 992312 (2d Cir. 2018), the Second Circuit found coverage existed for a car accident which resulted from the overserving of alcohol to a patron at an event because it held that the ensuing consequences were unintentional.
On April 1, 2013, Central Terminal Restoration Corp. (CTRC) held a fundraising event in association with Dyngus Day, a traditional post-Easter festival that attracts tens of thousands of Polish Americans to Buffalo, New York. In connection …Continue Reading