Policy Conditions, Considerations, Construction, and Formation Archives - Page 6 of 14

February 20, 2014 Policy Conditions, Considerations, Construction, and Formation

No Coverage for Construction Defect After Work Completed

On an underlying claim for negligent construction of a condominium project in south Mississippi, the Fifth Circuit overturned the Southern District of Mississippi’s decision to grant coverage to an additional insured. The Fifth Circuit overturned on the grounds that the additional insured was temporally barred, by the policy’s limitation and exclusion, from doing so.

When initially declining to provide coverage to the additional insured, the insurer cited to language in the policy that limited its coverage “to liability arising out of your ongoing operations performed …

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

Excess Insurer Required to Share Defense Costs Equally

This declaratory judgment action stems from a motor vehicle accident where claimants allege that the driver of a tractor-trailer struck and injured them. The plaintiff Old Republic Insurance Company (Old Republic) provided a defense to the driver, the lessee of the tractor – DAM Express Delivery Service (DAM) and the owner of the trailer – Coca-Cola (Coke) in the underlying action.

The owner of the tractor, Ryder Transportation Services (Ryder), obtained insurance through Old Republic covering DAM and Ryder on a primary basis with respect …

February 11, 2014 Policy Conditions, Considerations, Construction, and Formation

Insurer Reforms Policy to Avoid Coverage for Police Officer

The insurer was allowed to reform its policy to exclude coverage for law enforcement after a police officer was involved in an altercation with two town residents. The Eighth Circuit held the inadvertent failure to include a law enforcement exclusion was a mutual mistake and the policy would be reformed to reflect the parties’ true intentions.

The insurer issued a commercial insurance policy to a property owners’ association, and both the insurer and the association intended for the policy to exclude coverage for law enforcement. …

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

Insurer’s Policy Exclusion Bars Its Own Claim for Damages

The Eastern District of Louisiana cited to an insurer’s own policy exclusion for “faulty workmanship, repair or construction” to prohibit the insurer from seeking damages. The damages being sought amounted to more than $2.8 million, including for damage caused by roofing repair work. The work was performed on a commercial building that was damaged by Hurricane Issac.

In making its decision, the court indicated that its policyholder was seeking coverage due to hurricane damage, not faulty repairs relative to the hurricane damage. Since the “faulty …

December 10, 2013 Policy Conditions, Considerations, Construction, and Formation

No Leaks in This Defense: Carrier Obtained Summary Judgment Regarding Coverage for Gasoline Pipe Leakage

In a dispute surrounding an installation contract between a policyholder and the thirty-party plaintiff, the insured was alleged to have negligently installed a gasoline pipe leading from a gasoline holding tank to a marina on the third-party plaintiff’s property where gasoline was sold. Specifically, it was alleged that the gas pipe was not buried deeply enough and that it used improperly large backfill material. The pipe leaked approximately 500 gallons of gasoline, causing property damage. The policyholder sought coverage from its insurers. One insurer moved …

December 9, 2013 Policy Conditions, Considerations, Construction, and Formation

In Motor Vehicle Accident, Insurer of Vehicle Owner Owes Primary Coverage Despite “Other Insurance” Provisions

In October 2008, Jayme Lynn Jones, an employee of Hook & Anchor (H&A) was involved in a collision with Alexander Kosaka while Jones was driving a truck owned by Chemical Weed Control, Inc. (Chemical Weed). American States Insurance Company (American) insured H&A. ACE American Insurance Company (ACE) insured Chemical Weed. American tendered the defense of H&A in the ensuing litigation to ACE, which ACE denied.

American defended H&A, and subsequently commenced this declaratory judgment action seeking defense costs and attorneys’ fees and a declaration that …

November 21, 2013 Policy Conditions, Considerations, Construction, and Formation

Written Construction Contract Clarifies Competing Additional Insured Endorsements

The plaintiff, Lamp Incorporated (Lamp), brought a declaratory judgment action against Navigators Insurance Company (Navigators), seeking a declaration that Navigators breached its duty to defend Lamp in an underlying personal injury lawsuit stemming from a construction site accident (underlying lawsuit). Navigators filed a third-party complaint against West Bend Mutual Insurance Company (West Bend) seeking a declaration that West Bend, and not Navigators, provided primary, non-contributory coverage to Lamp and owed the duty to defend Lamp in the underlying lawsuit. Navigators also sought a declaration that …

November 19, 2013 Policy Conditions, Considerations, Construction, and Formation

Employee Exclusion Applies to “Statutory Employees” Even if Not Technically Employed by Additional Insured

The Eleventh Circuit recently held that a standard employee exclusion in a liability policy bars coverage to an additional insured where the injured claimant is a “statutory employee” of the additional insured for purposes of workers’ compensation law, even if the injured claimant is not technically employed by the additional insured.

The estate of an employee of a third-tier subcontractor on a construction project sued the project’s general contractor after the employee fell at the construction site and died as a result. The general contractor …

November 6, 2013 Policy Conditions, Considerations, Construction, and Formation

Southern District Finds Coverage Despite Competing “Other Insurance” Clauses

United Parcel Service, Inc. (UPS) brought a declaratory judgment action against Lexington Insurance Company (Lexington) seeking a declaration that Lexington was obligated to defend and indemnify UPS in an underlying personal injury action.

UPS entered into a Guard Services Agreement (GSA) with Adelis for uniformed guards. The GSA required Adelis to carry commercial general liability insurance coverage, naming UPS as an additional insured, and requiring Adelis to defend and indemnify UPS against claims arising from any act or omission by any Adelis employee, or any …

October 30, 2013 Policy Conditions, Considerations, Construction, and Formation

District Ct. Finds Co-Primary Coverage For Settlement of Underlying Accident

This declaratory judgment action derives from an underlying boat accident where a pontoon boat driven by Matt Higgins, collided with Jeremy Wood’s boat, seriously injuring Wood. The owner of the boat was insured by Owners Insurance Company (OIC). The driver of the boat was insured, through his homeowners’ carrier, State Auto Property and Casualty Company (State Auto). The resulting civil suit settled for $300,000. OIC paid $259,000, while the rest of the co-defendants contributed $41,000 collectively. OIC now seeks reimbursement from State Auto for one-half …