Insurance Archives - Page 4 of 6 - The Insurance & Reinsurance Report

June 1, 2014 Emerging Issues

11th Circuit Upholds Adequacy of Insurer’s Reservation of Rights and Rejects Estoppel Defense

In Wellons, Inc. v. Lexington Insurance Co. (May 16, 2014), the Eleventh Circuit rejected the insured’s argument that Lexington assumed and conducted its defense of the underlying lawsuit without adequately reserving its rights to disclaim coverage, affirming the district court’s finding that Lexington was not estopped from asserting its coverage defenses under the subject policies.

The Eleventh Circuit focused on interpreting the requirements for reservation of rights letters set forth by the Georgia Supreme Court in World Harvest Church, Inc. v. GuideOne Mutual Insurance Co.…

May 30, 2014 Emerging Issues

Mo’ Conflict, More Problems: Illinois Choice-of-Law Analysis Now Less Favorable for Insurers

Choice-of-law analyses are extremely significant when it comes to coverage disputes, especially those involving underlying blast fax suits brought under the Telephone Consumer Protection Act (47 U.S.C. §227, et. seq.), as the question of which state’s law applies will often be determinative of whether there is insurance coverage for the TCPA claim. The classic example involves a class representative strategically filing suit in Illinois, an historically coverage-friendly jurisdiction for TCPA lawsuits, with an eye on obtaining insurance coverage. This strategy just got easier for …

May 21, 2014 Emerging Issues

Florida Court Finds Underlying Tort Claimants Are Not Necessary Parties to DJ Action In Priority of Coverage Dispute

The plaintiff, Northern Assurance Company of America, sought a declaration as to the priority of coverage between its policy and that of the defendant, Auto-Owners, with respect to the underlying action. In the underlying action, Ray Lequerique alleged that he was injured while visiting David Giannone, Inc. (Giannone), a property owned by the Anthony Family Limited Partnership (Anthony) and leased to the Aqua Toy Store, Inc. (Aqua). Aqua Toy Store was insured by the plaintiff Northern Assurance. Giannone was insured by the defendant Auto-Owners under …

May 14, 2014 Emerging Issues

Preemptive Power Shutdown From Hurricane Sandy Was Not A Covered Business Interruption Claim

This coverage action arises from the widespread power outages that occurred in and around New York City during and after Hurricane Sandy. On October 29, 2012, in anticipation of storm-related flooding, utility provider Consolidated Edison Co. of New York, Inc. preemptively shut off power to certain of its service networks to preserve the integrity of the utility system. As a result, the plaintiff, a law firm, was without power at its lower Manhattan office for several days. The firm filed a claim under its property …

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 …

March 7, 2014 Environmental

Insurer Prevails On Applicability Of Pollution Exclusion – Release Not Sudden or Accidental

This environmental coverage action arises out of the historic contamination of a parcel with various solvents and toxic waste disposed in unlined pits at the property. Specifically, Northrop acknowledges using the property, which later became known as Bethpage Community Park (BCP), for the disposal of sludge from an on-site industrial wastewater treatment plant and from waste oils that contained residual amounts of TCE, other solvents and PCB’s since 1948.

Later, in the 1960’s, the company donated the property to the Town of Oyster Bay and …

February 27, 2014 Emerging Issues

NYDFS Announces New Extension to Sandy Mediation Program

The New York Department of Financial Services (NYDFS) has extended the emergency regulation (15^th Amendment to Regulation 64, 11 NYCRR 216) surrounding mediations relating to Hurricane Sandy. The current version was filed with the Secretary of State on February 14,2014 and will expire on or about May 15, 2014 under the 90 day rule.

Originally promulgated in the aftermath of Superstorm Sandy, the amendment applies to any claim for loss or damage, other than claims made under flood policies issued under the national flood …

February 26, 2014 Environmental

Et Tu, Neighbor?: Multiple Carbon Monoxide Injuries in Apartment Complex Deemed A Single Occurrence

This environmental coverage action arises out of a carbon monoxide exposure and poisoning of multiple tenants in an apartment complex serviced by a gas boiler furnace located in the basement of the unit.

A declaratory suit was initiated against the complex owner and the insurer seeking a declaration that claimants are entitled to a separate occurrence limit and that the damages sustained by each group of tenant plaintiffs constituted separate occurrences under the policy. Here, the subject policy defined “occurrence” as “an accident, including continuous …

February 18, 2014 Emerging Issues

Insurers Reach the Summit: N.Y. Court of Appeals Reverses K2, Says Exclusions Not Lost in Breach of Duty to Defend

After granting reargument, the New York State Court of Appeals reversed its previous decision finding that the rule of stare decisis must govern and that the court erred by failing to take account of controlling precedent in Servidone Const. Corp. v. Sec. Ins. Co. of Hartford. In that previous decision, K2-I, the court arguably rewrote New York law by adopting a minority position that recognized the doctrine of coverage by estoppel ruling that where an insurer breaches its duty to defend, it has …