Policy Conditions, Considerations, Construction, and Formation Archives - Page 2 of 14

April 5, 2018 Policy Conditions, Considerations, Construction, and Formation

A Divided Court Finds Additional Insured Coverage is Enforceable Across New York

On March 27, 2018, the New York Court of Appeals, in a matter of first impression for the state’s highest court, held that a direct contract was required to confer automatic additional insured status under common policy language. Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire & Marine Ins. Co., 143 A.D.3d 146 (1st Dep’t 2016), aff’d, __N.Y.3d__, 2018 WL 1473553 (Mar. 27, 2018).

Many standard blanket additional endorsements often confer additional insured status on entities “with whom” the named insured has …

July 25, 2016 Policy Conditions, Considerations, Construction, and Formation

Insurer Accused of Having Ace Up its Sleeve: Insurer Estopped from Relying on Sublimit Due to Defense Counsel’s Failure to Supplement Discovery Responses in Tort Lawsuit

In Harwell v. Fireman’s Fund Insurance Co. of Ohio, 2016 IL App (1st) 152036, the Illinois Appellate Court refused to allow Fireman’s Fund Insurance Company to assert a policy sublimit because defense counsel retained by Fireman’s Fund to represent its insured in the underlying tort lawsuit failed to inform the tort claimant that the sublimit, and not the full limit, applied.

As background, Brian Harwell was injured while working at a construction project supervised by Kipling Development Corporation as a general contractor. Harwell sued …

May 23, 2016 Policy Conditions, Considerations, Construction, and Formation

Must an Additional Insured Have a Written Contract With the Named Insured to Get Coverage? It Depends Which Court You Ask

There is a growing list of trial court decisions in New York where the courts disagree of whether an additional insured endorsement to an insurance policy requires a written contract between the additional insured and the policy’s named insured for additional insured status to apply. The U.S. District Court for the Southern District of New York recently held in Liberty Mutual Fire Insurance Company v. Zurich American Insurance Company that contractual privity with the named insured was not required.

In Liberty Mutual, the additional insured …

May 19, 2016 Policy Conditions, Considerations, Construction, and Formation / Reservation of Rights

No Prejudice Needed When an Insured Settles Without the Insurer’s Consent

In Travelers Prop. Cas. Co. of Am. v. Stresscon Corp., 2016 Colo. LEXIS 419 (Colo. April 25, 2016), Colorado was faced with a choice: enforce the plain and unambiguous terms of an insurance policy or extend the requirement that an insurer prove it was prejudiced by its insured’s breach of the policy’s conditions before denying coverage. The Colorado Supreme Court choose the former and held that an insurer seeking to deny coverage for a breach of the no-voluntary-payments provision does not need to prove …

March 15, 2016 Policy Conditions, Considerations, Construction, and Formation

Not Better Late Than Never: Illinois Appellate Court Finds in Favor of Insurer on Late Notice Defense

The Illinois Appellate Court, in AMCO Insurance Co. v. Erie Insurance Co., ruled in favor of a CGL insurer based on an additional insured’s violation of the policy’s notice condition. This case represents a significant victory for insurers, which are constantly searching for the enforcement of conditions precedent to coverage.

The Appellate Court held in favor of Erie Insurance Co. based on a late notice defense. As background, on March 15, 2007, Smith filed a negligence action against Hartz Construction Co., KT Richards Construction …

March 7, 2016 Policy Conditions, Considerations, Construction, and Formation

You’re Barred. Again: Negligent Acts, Conditional Language, and the Assault/Battery Exclusion

A fatal shooting took place at a bar. The bar purchased an insurance policy, which contained an assault and battery exclusion, barring coverage for bodily injury or property damage arising out of “any actual, threatened or alleged assault or battery” and the “failure to any insured or anyone else for whom any insured is or could be held legally liable to prevent or suppress any assault or battery.”

The bar and additional insured premises owner were sued for negligent security following the shooting. The insurer …

February 4, 2016 Environmental / Policy Conditions, Considerations, Construction, and Formation

No Smoking! Pollution Exclusion Bars Coverage For Claims Arising Out of “Smoky” Beverage

While Florida courts have typically refused to limit pollution exclusions within insurance policies to traditional environmental claims, a District Court in Florida has extended the application of such exclusions even further by finding that a pollution exclusion applies to claims against a bar for injuries allegedly caused by an “exotic” cocktail served by the bar.

In Evanston Insurance Company v. Haven South Beach, LLC, et al., Case No. 15-20573 (S.D. Fla. Dec. 28, 2015), the insured, a bar, served an alcoholic drink infused …

January 25, 2016 Policy Conditions, Considerations, Construction, and Formation

Failure to Answer Question on Application for Insurance Truthfully Held to be Grounds for Rescission

Policyholders have an affirmative duty to read the questions asked on an insurance application carefully and will be bound by the answers provided. So stated the United States District Court of the District of Connecticut when it held that a policyholder’s answer of “no” to a question asking whether any of its officers was the subject of a governmental investigation was knowingly false and material to the insurer’s decisions to issue the liability insurance policy. Zurich Am. Ins. Co. v. Expedient Title, Inc., …

January 22, 2016 Policy Conditions, Considerations, Construction, and Formation

Take My Word For It: Insurer Bound by Insured’s Oral Promise

It is rare that insurance coverage is provided based on an oral agreement. However, the Court of Appeals for the Seventh Circuit recently held that an additional insured endorsement allowed the policyholder to add insureds by oral agreement, regardless of when a written certificate of insurance verifying the addition was issued. The case illustrates the evidentiary dangers of broadly worded additional insured provisions that extend coverage by an oral agreement.

In this case, the putative additional insured, Vita Food Products, entered into a contract with …

January 14, 2016 Policy Conditions, Considerations, Construction, and Formation

Alcohol, Caffeine and Stimulants: Unambiguous Liquor Liability Exclusion Bars Coverage for Bodily Injury Claims

Refusing to succumb to pressure by an insured to find an ambiguity in an exclusion to a commercial general liability (CGL) policy where none existed, the Illinois Appellate Court, First District in Phusion Projects, Inc. v. Selective Ins. Co., 2015 IL App (1st) 150172 (Ill. App. Ct. 1st Dist. 2015) confirmed that plainly written policy exclusions will be enforced.

In Phusion Projects, the manufacturer of an alcoholic beverage containing high levels of alcohol and other stimulants sought coverage from its CGL insurer for …