Policy Conditions, Considerations, Construction, and Formation Archives - Page 5 of 14

October 30, 2014 Policy Conditions, Considerations, Construction, and Formation / Professional Liability

Third Circuit Affirms Applicability of ‘Misappropriation’ Limitation Clause in Professional Liability Policy to Class-Action Fraud Scheme

On October 10, 2014, the Third Circuit Court of Appeals affirmed a lower court’s ruling that a professional liability insurance policy’s “misappropriation” sub-limit clause applied to limit the amount of defense costs owed to an insured whose employee plead guilty to mail and wire fraud in Camico Mutual Ins. Co. v. Heffler, Radetich & Saiita, LLP, 2014 U.S. App. LEXIS 19636 (3d Cir. Oct. 10, 2014).

Christian Penta was a senior claims analyst for Heffler, Radetich & Saiita, LLP, an accounting firm that distributes …

October 9, 2014 Policy Conditions, Considerations, Construction, and Formation

Lack of Authentication of Assignment of Insurance Proceeds Costs Insured Party $1.2 Million

In Warehousing v. Auto-Owners Ins. Co., 2014 U.S. App. LEXIS 18058 (11^th Cir. Sept 22, 2014), the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court ruling which held that an insured party’s failure to authenticate a document allegedly transferring the right to $1.2 million in insurance proceeds warranted a grant of summary judgment against it.

Max Warehousing LLC owned a warehouse property insured by Auto-Owners Insurance Company that Max leased to third parties. Embassy National Bank held a mortgage …

September 24, 2014 Policy Conditions, Considerations, Construction, and Formation

‘Close Enough’ Disclosure During Claim Investigation Earns Homeowner Reversal of Coverage Denial Under Fire Policy

In Rose v. State Farm Fire & Cas. Co., 2014 U.S. App. LEXIS 17312 (6^th Cir. Sept. 8, 2014), the Sixth Circuit Court of Appeals reversed and remanded a lower court ruling holding an insured was not entitled to coverage under a fire insurance policy because the he had provided false information regarding his financial status in the post-fire claim investigation.

Richard Rose was an Ohio homeowner whose house burned down. State Farm insured Rose through a homeowner’s policy. That policy provided no …

July 30, 2014 Policy Conditions, Considerations, Construction, and Formation

DC Circuit Holds Temporary Nurses are ‘Employees’ for Purposes of Hospital’s General Liability Policy

In Interstate Fire & Casualty Company v. Washington Hospital Center Corp., the D.C. Circuit Court of Appeals affirmed a lower court decision holding that a temporary nurse hired to work at the Washington Hospital Center (the hospital) by a staffing agency was an “employee” of the hospital and therefore an “insured” under the Hospital’s general liability policy.

The hospital carried a $5 million general liability policy issued by Greenspring Financial Insurance Company. This policy defined an “insured” as “all past, present, or future full-time …

July 24, 2014 Policy Conditions, Considerations, Construction, and Formation

Eighth Circuit Keeps the Faith: Utmost Good Faith Admiralty Insurance Rule Cannot be Pre-empted

Thursday July 17, Judge Murphy of the Eighth Circuit concluded that the doctrine of utmost good faith is a judicially established federal admiralty rule, thus preempting the application of state laws.

In February of 2011, The Mark Twain, a cement barge, sank to the bottom of the Mississippi River. Just four months prior, its owner, Continental Cement Co, applied to Starr Indemnity & Liability for a marine insurance policy to cover all of its barges. Continental, however, neglected to submit a 2008 general condition survey …

July 23, 2014 Policy Conditions, Considerations, Construction, and Formation

New York Court Reaffirms Limitations on Policy Claims Arising Out of Superstorm Sandy

In Sikarevich Family L.P. v. Nationwide Mutual Insurance Co., No. 13-cv-05564, 2014 U.S. Dist. LEXIS 92254 (E.D.N.Y. July 3, 2014), the United States District Court for the Eastern District of New York addressed a policyholder’s claims for: (1) breach of the covenant of good faith and fair dealing, (2) unjust enrichment, (3) consequential damages, and (4) punitive damages. Notably, the policyholder alleged a breach of contract cause of action. The policyholder’s claims arose out of Nationwide’s denial of coverage for the policyholder’s first party …

July 14, 2014 Policy Conditions, Considerations, Construction, and Formation

11th Circuit Rejects ‘Complaint Taken as a Whole’ Analysis of Insurer’s Duty to Defend, Places Reinsurer on Hook for Defense Costs

In Public Risk Management of Florida v. One Beacon Insurance Co., the 11th Circuit Court of Appeals reversed a decision relieving primary insurer Public Risk Management of Florida (PRM) of its duty to defend the City of Wintergarden because the underlying “Complaint taken as a whole” failed to state that the City committed a covered wrongful act. As a result, reinsurer OneBeacon Insurance Company was forced to pay PRM’s defense costs.

PRM is an intergovernmental risk management association that insures various local governmental entities …

July 10, 2014 Policy Conditions, Considerations, Construction, and Formation

‘Super Sized’ Ruling: IL Federal Court Upholds Application of ‘Super’ Intellectual Property Exclusion Under Coverage B

In Hartford Casualty Insurance Company v. Dental USA, Inc., No. 13-C-7637, 2014 U.S. Dist. LEXIS 85529 (N.D. Il. June 24, 2014), the United States District Court for the Northern District of Illinois recently upheld as enforceable and not against public policy a “super” intellectual property exclusion.

The coverage dispute arose out of the following circumstances. Since 2008, Dental USA, Inc. had been insured by Hartford Insurance Company, which issued general liability policies for Dental’s business as a supplier of dental instruments. Dental commenced two lawsuits …

June 13, 2014 Policy Conditions, Considerations, Construction, and Formation

Superfund Site Results in $3 Million Coverage Row

An Oregon Judge required RLI Insurance to reimburse three other insurers more than $2.9 million in defense costs surrounding litigation over a Portland Oregon Superfund site. The other insurers defended Northwest Pipe Co. in its litigation over the Superfund site after Northwest’s facility was identified as part of the superfund site by the EPA and state departments. Northwest’s insurers expended money in the required investigation of the site and facility as well as the defense to claims brought by the EPA and state agencies.

Northwest …

March 13, 2014 Policy Conditions, Considerations, Construction, and Formation

Court Finds Coverage Under Professional Liability Policies For Settlement In Breast Cancer Vaccine Case

In this declaratory judgment action, the plaintiff, Rosalind Franklin University of Medicine and Science (Rosalind), seeks coverage from its insurers, Lexington Insurance Company (Lexington) and Landmark American Insurance Company (Landmark), after both insurers denied coverage for a settlement Rosalind paid in an underlying lawsuit brought by former patients who sought compensation for Rosalind’s decision to discontinue an experimental breast cancer vaccine program. Lexington filed a cross-claim against Landmark, contending that Landmark’s policy should provide coverage for the underlying suit and settlement.

Lexington and Landmark argued …