New York’s Appellate Division, First Department, handed insurers a lump of coal this holiday season, unanimously holding that a contractor’s insurance company (Insurer) owed a property owner and manager (Building Defendants) primary coverage as additional insureds, even though its named insured had nothing to do with the allegedly negligent acts giving rise to the subject injury, and despite the named insured previously prevailing against the Building Defendants’ claims for common law and contractual indemnification. As the First Department panel concluded, because the additional insured clause …Continue Reading
Failure to Issue a Reservation of Rights, and to Address an Insured’s Affirmative Defenses in a Coverage Dispute, May Preclude Denial of an Otherwise Excluded Claim
A recent Florida state court opinion emphasizes the importance of an insurer’s obligations in the event of a liability claim against an insured and a subsequent coverage dispute with that insured.
In Hurchalla v. Homeowners Choice Property & Casualty Insurance Company, the insured was sued for tortious interference with business contracts. Although her liability policy did not insure against intentional acts, the insurer initially provided the insured with a defense. However, the insurer neglected to inform the insured that the defense was being provided …Continue Reading
Insurers Be Ready: New Jersey’s Two-Year Window Reviving Time-Barred Sex Abuse Suits is Open
On December 1, 2019, the two-year look-back period created by New Jersey Senate Measure S477 went into effect, reviving claims of sexual abuse that would otherwise be barred under the statute of limitations.
In March 2019, S477 passed in the New Jersey State Senate by a vote of 32 to 1, followed by passage in the New Jersey State Assembly by a vote of 71-0, with five abstentions. The bill was signed into law by New Jersey Gov. Phil Murphy on May 13, 2019.
One …Continue Reading
Florida Court Requires Plaintiff to Plead More Facts About a Cause of Loss
The U.S. District Court for the Middle District of Florida dismissed a property insurance case after holding that ambiguous, non-specific pleading of a cause of loss is not enough. Causation is often a focus in property insurance cases. The exact cause of a particular loss will determine if the loss is covered or excluded under the insurance policy—meaning whether a plaintiff-insured will recover from their insurer. However, in state and federal courts, plaintiffs often get by with pleading merely that “a covered loss occurred during …Continue Reading
Illinois: Latest State to Declare Malicious Prosecution Claims Only Trigger Coverage in Effect During Arrest
In this era of sophisticated DNA testing, exonerations of incarcerated individuals have become increasingly commonplace. The ensuing malicious prosecution lawsuits have justifiably resulted in high verdicts and settlements. The key issue for many municipalities is whether coverage is triggered for these malicious prosecution claims, and under which policies of insurance. On November 21, 2019, the Supreme Court of Illinois, in Sanders v. Illinois Union Insurance Company, 2019 IL 124565, definitively determined that claims of malicious prosecution trigger coverage only under policies of insurance in …Continue Reading
Florida Bridge Collapse Resolution Offers Workaround for Multiple Claimant Scenarios
A recent bankruptcy plan filed by Munilla Construction Management (MCM)–the general contractor for the failed pedestrian bridge at Florida International University (FIU)–paves the way for judicially recognized interpleader-type scenarios allowing insurers to resolve multiple-claimant incidents where there may be insufficient policy limits. On November 15, 2018, the Southern District of Florida Bankruptcy Court agreed to expedite a process that would allow victims of the pedestrian bridge collapse to start receiving compensation payouts following the creation of a victim’s fund.
By way of background, a pedestrian …Continue Reading
The Pollution Exclusion Can Bar Coverage for Alleged Carbon Monoxide Poisoning Claims
In Foremost Ins. Co. v. Rodriguez, a Pennsylvania federal district denied a motion to dismiss a declaratory judgment lawsuit filed by a liability insurer that sought to disclaim coverage for an underlying lawsuit alleging carbon monoxide exposure.
In the underlying state court lawsuit, tenants sued their landlords, alleging that the landlords refused to repair a heating system, which resulted, ultimately, in carbon monoxide poisoning. After the tenants’ hospitalization, the local gas company deemed the heater on the property unsafe, and instructed the …Continue Reading
Consent Judgments are not Excess Judgments: The Eleventh Circuit Emphasizes the Excess Judgment Rule in Context of Bad Faith
As a general rule, Florida law imposes a duty of good faith on insurers to defend claims against insureds and to settle those claims where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. An insured may, rightly or wrongly, claim an insurer’s conduct in handling a claim falls short of that standard of care. But a claim for bad faith will not accrue until the alleged claims handling results in liability that exceeds the limits of the …Continue Reading
New York Courts Continue to Differ on Interpretation of Primary and Noncontributory Clauses
Most insurance professionals encounter additional insured coverage issues on a daily basis, and priority of coverage is sometimes part of an additional insured analysis. Policies issued by insurance carriers contain primary and noncontributory language on an increasing basis, and that language is sometimes located within a separate endorsement or may be part of the additional insured endorsement. Generally speaking, a primary and noncontributory provision modifies the policy’s other insurance provision to specify that coverage provided under the policy to an additional insured will be excess …Continue Reading
Federal Court Crusades for Serial Comma, Holds No Coverage for Inflatable Beach Ball
When a festival-goer is injured by a flying beach ball, does a general liability insurer have to pay for any ensuing loss? Is the serial comma (sometimes referred to as the Oxford comma) dead? Both questions were addressed by a Florida federal court when deciding who was responsible to pay for a party foul.
In May 2018, Robert Hunt brought a lawsuit seeking compensation for injuries he sustained while attending a festival called Rum Fest 2017. During the event, while a crowd listened to …Continue Reading