Articles Posted in General Liability

Published on:

by

Texas is not a place known for surrendering. (Remember the Alamo!). But like their compatriots in other states, Texas policyholders sometimes see the advantage of surrendering their liability iStock-522384399-alamo-300x200insurance policy rights to their litigation adversaries in order to retreat from the dispute. Whether they may have to stand and fight first is a question that the Texas Supreme Court may finally answer in Great American Ins. Co. v. Hamel. In that case, the Texas Supreme Court has agreed to review whether an insurer may be responsible for a judgment entered against its insured that is the result of a non-adversarial trial. This will be an important decision that will have significant repercussions for insureds and insurers alike.

Continue Reading ›

Published on:

by

We’ve come a long way since the days of Timothy Leary—both in terms of marijuana legalization, and in the diversity of business insurance products that have reached the market to insure marijuana-related risks. As of this blog post, more than 20 states have legalized marijuana for medical use, including eight states that have also legalized it recreationally. At the federal level, however, marijuana continues to be a Schedule I controlled substance, making it illegal for any purpose. Whether and to what extent the federal prohibition will be enforced by the Trump administration is not yet known. As the legal marijuana industry continues to grow apace, industry participants would do well to consider the insurance products available to them and potential pitfalls for the unwary.

Hand Holding Small Marijuana Leaf with Cannabis Plants in Background

Continue Reading ›

Published on:

by

Pennsylvania policyholders need to keep their eyes on the details when it comes to defending faulty workmanship claims. What you see—or think you see—is not always what you get. In Bealer v Nationwide Mutual Insurance Company, the U.S. District Court for the Eastern District of Pennsylvania held on November 16, 2016 that an insurance company did not have a duty to defend its policyholder after determining that the claims assertedMonochrome portrait of senior man peering through magnifying glass, grimacing in the underlying litigation were for faulty workmanship and did not constitute an “occurrence.” But other Pennsylvania decisions provide opportunities to find coverage for policyholders who might be in similar situations.

William Tierney entered into a contract with Robert Bealer for the purchase of a lot and construction of a residence. About six months after Tierney moved in, a rainstorm flooded the basement of his home—after which he noticed cracks on several foundation walls, and then brought suit against Bealer.

Continue Reading ›

Published on:

by

The failure to include and/or accurately describe property locations is among the most common points of tension we see in litigation over wide-area catastrophe loss issues (earthquakes, floods, hurricanes) between the insured and its property insurance carriers. However, many first-party property policies offer devices to ensure that the policyholder is properly protected. When coverage for a location becomes disputed, the policyholder can put pressure on the carrier by resorting to “gap-filler” endorsements that are widely available, if underutilized.

Mind the gap sign

The insurance company may have prospectively protected itself the day your policy went into effect by adding an “occurrence limit of liability” endorsement. This clever insurance carrier device, which has become common in the last decade, is intended to limit the carrier’s exposure at each particular location, placing the onus on the insured to put every “location” on a master list with correctly reported values for each category of exposure (e.g., business interruption, property damage, contents exposure, etc.).

Continue Reading ›

Published on:

by and

Global-ishInsurance is not only a risk transfer tool, but also a valuable asset. Certain coverages, however, are not purchased or pursued by multinational companies transacting business in the United States because there are nuanced differences between international and U.S. insurance programs and law. These companies, often with global offices, will be best served by having counsel experienced in such nuances conduct a diagnostic review of their insurance policies. Not only may potential coverage gaps be identified, but a company will be better able to plan ahead and negotiate more favorable coverage terms before a loss arises.

Continue Reading ›

Published on:

by

Since 1979, commercial general liability (CGL) insurers have relied on the New Jersey Supreme Court case of Weedo v. Stone-E-Brick, Inc. and its progeny to argue that a subcontractor’s defective work can never qualify as an “occurrence” under a standard form ISO CGL policy. This argument is contrary to both the language of standard CGL policies and the trend in recent case law, but courts in New Jersey and elsewhere have continued to cite Weedo for this proposition. With its new decision in Cypress Point Condominium Association, Inc. v. Adria Towers, LLC, the New Jersey Supreme Court has now finally relegated Weedo to its proper status as an historical footnote based on outdated policy language.

family business care toy insurance

Cypress Point involved claims for rain water damage to a condo building. When the condo association began noticing the damage, it brought claims against the developer/general contractor and several subcontractors. The association alleged that the subcontractors’ defective work on the exterior of the building allowed water leaks that damaged steel supports, sheathing and sheetrock, and insulation. When the developer’s CGL insurers refused to cover the claims, the association sued the insurers, seeking a declaration that the association’s claims against the developer were covered.

Continue Reading ›

Published on:

by

When an insurer pays a claim by its insured, it acquires a legal right to pursue a so-called “subrogation” claim against another party who may be responsible for the damage. But public policy dictates that an insurer, claiming subrogation for amounts paid to an insured under one policy, is barred from suing another on the same construction project whom it has also insured, even if under a separate insurance policy. Although this antisubrogation doctrine was first recognized some 25 years ago, it’s not often invoked. But this implied waiver of subrogation both prevents the insurer from passing the incidence of loss to its own insured, and protects against the potential for conflict of interest that may compromise the insurer’s incentive to properly defend its insureds. In other words, Pickpocketit prevents the insurer from “pass[ing] the incidence of loss, at least in part, from itself to its own insured and thus avoid[ing] the coverage which the insured purchased.”

Continue Reading ›

Published on:

by

Ever since the U.S. Court of Appeals for the Second Circuit decided Zeig v. Mass. Bonding & Insurance Co. in 1928, it has been well-settled that a policyholder can compromise a disputed claim with its insurer for less than the full limits of the policy without putting its rights to excess coverage at risk. In a seminal opinion by Judge Augustus Hand, the Zeig court said, “We can see no reason for a construction so burdensome to the Man pulling out his empty pocket for camerainsured,” to require collection of the full amount of primary polices in order to exhaust them. The Zeig court emphasized that a compromise payment by the primary insurer discharges the limits of the primary coverage, while the excess insurer is unharmed, since it must pay only the amount exceeding the attachment point of its policy.

Continue Reading ›

Published on:

by

Feeling wired about risks arising from the Telephone Consumer Protection Act? Maybe you should. The TCPA subjects businesses that use text messaging, auto-dialing, and bulk faxing for advertising and marketing to potential class action litigation. Financial institutions, various supermarket chains, and recently Caribou Coffee have all been targeted in TCPA class actions. But policyholders who get static over such claims are not without recourse: several lines of liability insurance may answer the call.

Cell Phone Continue Reading ›

Published on:

by

Insurance covers the unexpected. Courts sometimes struggle to assess what an insured did expect, didn’t expect, or sometimes, should have expected. Contractors, construction firms and others should bear this in mind in their daily operations and when seeking a defense from their insurance companies.

In Auto-Owners Insurance Co. v. Ryan Stevens Construction, Inc. the U.S. District Court for the District of Utah recently held that a contractor’s commercial general liability insurance carrier had no iStock_000088282803_Medium-track-hoeduty to defend a contractor who should have expected property damage resulting from its use of certain equipment on a construction project. The decision cautions contractors around the country to consider the expected consequences of their on-site actions to avoid arguments from insurers that any resulting damages are not accidental.

Continue Reading ›