Policy Conditions, Considerations, Construction, and Formation Archives - Page 4 of 14

March 19, 2015 Policy Conditions, Considerations, Construction, and Formation

No Coverage for Fraudulent Withdrawal of Electronic Funds

In Metro Brokers, Inc. v. Transp. Ins. Co., 2015 U.S. App. LEXIS 3473 (11th Cir. Ga. Mar. 5, 2015) an all risk policy was held to not provide coverage to an insured real estate brokerage company for online fraudulent withdrawals from the company’s bank account.

On December 10, 2011, thieves logged into the insured’s online banking system and authorized payments totaling over $188,000 from the insured’s escrow account to several other bank accounts. They had used a virus known as “Zeus” to gain access to …

March 12, 2015 Policy Conditions, Considerations, Construction, and Formation

Colorado Supreme Court Holds Notice-Prejudice Rule Inapplicable to Notice Requirement in Claims-Made Policies

In Craft v. Philadelphia Insurance Co., 2015 CO 11 (Feb. 17, 2015), the Colorado Supreme Court held that the notice-prejudice rule (an insured who gives late notice of a claim to his/her insurer does not lose coverage benefits unless the insurer proves resultant prejudice) does not apply to claims-made insurance policies with date-certain notice requirements.

In the underlying action, Dean Craft was the principal shareholder and present of Campbell’s C-Ment Contracting, Inc. (“CCCI”). Craft agreed to sell some of his CCCI shares to Suburban …

February 24, 2015 Policy Conditions, Considerations, Construction, and Formation

Toll Free: First Circuit’s Decision Potentially Leaves Thousands of Asbestos Claimants Without Remedy Due to Expiration of Statute of Limitations

In Lydon v. T& N Ltd., 2015 WL 544970 (1st Cir. 2015), the First Circuit found in favor of T&N Limited, an asbestos manufacturer, effectively denying thousands of asbestos-related claims. Once T&N became aware that its product exposed it to significant liability due to its propensity to cause mesothelioma, T&N filed for Chapter 11 Bankruptcy reorganization. Although one of T&N’s principal assets was a 500 million pound liability insurance policy issued by Hercules, United Kingdom law controlled the bankruptcy and the Hercules policy could …

February 6, 2015 Policy Conditions, Considerations, Construction, and Formation

Illinois Appellate Court Penalizes Insurer for Not Re-Asking Questions in Renewal Application the Insured Already Answered Incorrectly in Prior Application

In Illinois State Bar Association Mutual Insurance Co. v. Brooks, Adams & Tarulis, 2014 IL App (1st) 132608, the Illinois Appellate Court held, in relevant part, that the Illinois State Bar Association Mutual Insurance Company (“ISBA”) could not rescind a renewal policy based on a misrepresentation in the initial policy application when there was no incorporation of the initial application of insurance into the renewal policy.

As background, Douglas Tibble learned of a claim by Tango Music, LLC (“Tango”) in November 2002. In December …

January 26, 2015 Policy Conditions, Considerations, Construction, and Formation

Indiana Supreme Court Addresses Monetary Threshold for Secondary Liability in Workers Compensation Case

In Young v. Hood’s Gardens, Inc. 2015 Ind. LEXIS 46 (Jan. 22, 2015), the Indiana Supreme Court reversed a lower court ruling granting summary judgment to a business owner who had sought a declaration that it was not required to pay workers compensation benefits to the employee of a contractor it had hired for certain tree removal services.

Hood’s Gardens, Inc., contracted with Discount Tree Extraction to remove a tree at Hood’s place of business. Discount orally quoted a price of $600 for the work, …

January 21, 2015 Policy Conditions, Considerations, Construction, and Formation

Compulsory Insurance Doctrine Negates Insurer’s Late Notice and Cooperation Defenses, 8th Circuit Says

In Northwest Airlines, Inc. v. Professional Aircraft Line Service, No. 13-1754, 2015 U.S. App. LEXIS 546 (8th Cir. Jan. 14, 2015), the Eighth Circuit rejected an insurer’s attempt to deny coverage based on late notice and failure to cooperate defenses because the insured was required by county ordinance to maintain insurance.

Westchester Fire Insurance Company insured Professional Aircraft Line Service (PALS) under a hangarkeepers liability insurance policy. PALS entered into a contract with Northwest Airlines to service and maintain Northwest’s aircraft at McCarran International Airport …

January 15, 2015 Policy Conditions, Considerations, Construction, and Formation

The Importance of Aesthetics: Minnesota Supreme Court Weighs in on Matching Colors

In Cedar Bluff Townhome Condo. Ass’n v. American Family Mutual Insurance Company, 2014 Minn. LEXIS 661 (Minn. Dec. 17, 2014), the Minnesota Supreme Court held that a property insurer was on the hook for replacing all the siding of certain apartment buildings, whether damaged or undamaged, when matching replacement siding for the damaged portions could not be found due to the faded coloration of the existing siding.

American Family Mutual Insurance Company (AFMIC) insured 20 multi-unit residential buildings owned by Cedar Bluff Townhome Condominium …

January 6, 2015 Policy Conditions, Considerations, Construction, and Formation

Sixth Circuit Interprets ‘Direct Action’ Provision of 28 U.S.C. 1332 in the Context of Michigan’s No-Fault Insurance Law

In Ljuljdjuraj v. State Farm Mutual Automobile Ins. Co., 2014 U.S. App. LEXIS 24108 (6th Cir. Dec. 19, 2014), the U.S. Court of Appeals for the Sixth Circuit held that the ‘direct action’ provision of 28 U.S.C. § 1332(c)(1) does not destroy diversity jurisdiction in an action brought against an insurer pursuant to Michigan’s No-Fault Insurance Law where a “contract of liability insurance” was not implicated.

Elvira Ljuljdjuraj (EL) was driving a car owned by her friend, Bardhyl Mullalli, when she lost control of the …

December 4, 2014 Policy Conditions, Considerations, Construction, and Formation

“Test Drive” Ambiguous

In Exotic Motorcars and Jewelry, Inc. v. Essex Insurance Co., a Florida appeals court found the trial court interpreted material policy terms too narrowly in denying coverage of the vehicle collision at issue.

In this coverage dispute, the insured Exotic Motorcars and Jewelry, Inc. (Exotic) sued its insurer Essex Insurance Co. (Essex) to recover its loss from a vehicle collision. The collision occurred while the insured, an exotic car dealer, drove a newly acquired vehicle to another location for inspection. The insured’s policy only …

November 6, 2014 Policy Conditions, Considerations, Construction, and Formation

“Excess” Clause Trumps “Pro-Rata” Clause in Colorado Other Insurance Dispute

Travelers Home and Marine Insurance Company (Travelers) brought a declaratory judgment action against Central Mutual Insurance Company (Central) claiming that it contributed more than its required share to the underlying action against a common insured, Winston Howe (Howe). The underlying action involved a motor vehicle accident in which Travelers insured, Howe, was driving a car owned by Central’s insured, Walter Pawlowski (Pawlowski). Howe was a permitted user of Pawlowski’s car and thus, qualified as an insured under the Central Policy.

Travelers sought determinations that the …