Insurers often rely upon coverage counsel to advise them of their duties and obligations with respect to claims for coverage by their insureds and then take that advice and communicate it in whole or in part to their insureds. The expectation is that the advice of counsel is privileged even if it is thereafter embraced by the insurer and communicated to the insured. But is it? No, said a trial court in West Virginia, where an insured sought from coverage counsel for the insurer opinion letters the counsel had written to the insurer on similar claims (i.e., claims not involved in the litigation between the insured and the insurer). Continue reading “What I Tell You is Privileged and Protected From Discovery (Even if You Embrace It and Reiterate It to Your Insured)”
Duane Morris Partner Cyndie Chang to Present at the ABA Tort Trial and Insurance Practice Section’s Spring Conference
Duane Morris’ Cyndie M. Chang, a partner in the firm’s Los Angeles office, will be speaking at the American Bar Association (ABA) Tort Trial and Insurance Practice Section’s spring conference, “Resolution of Property Insurance Claims in the Modern Age-Appraisal, Mediation and Arbitration,” which will be held on April 24-26, 2014, at the Park Hyatt Aviara in Carlsbad, California. Ms. Chang will participate in a panel discussion on “Mock Mediation of a Property Insurance Claim: Focusing on Preparation as the Key to Success” on Thursday, April 24, from 2:00 p.m. to 4:00 p.m.
New York Appeals Court Reverses Itself in K2 Investment Group Decision; Reaffirms Earlier Ruling in Servidone
In a decision notable for several reasons, the New York State Court of Appeals—the state’s highest court—reversed itself in K2 Investment Group, LLC v. American Guarantee & Liability Insurance Co. [21 NY3d 384 (2014)] and reaffirmed its earlier ruling in Servidone Construction Corp. v. Security Insurance Company of Hartford [64 NY2d 419 (1985)].
In doing so, the court reestablished the rule it pronounced in Servidone when it held that a liability insurer who determines not to provide a defense to its insured may still contest its duty to indemnify on the basis of an exclusion to coverage.
Click here to read the full Duane Morris Alert.
Claims Made & Reported Policies: Continuous Coverage Does Not Trump the Requirement that Claims Be Made and Reported in the Same Policy Period
In a ruling upholding the concept that “words have meaning”, a United States District Court interpreting South Carolina law denied coverage to an insured which had a claim made against it in one policy period but did not report the claim to its insurer until the next policy period even though the insured was continually insured by the same insurer. Rather, the Court held in essence that a requirement that claims be “made-and-reported in the policy period” actually means that claims that claims must be made and reported in the same policy period and coverage will not be extended merely because the insured renews its policy.
The Devil Is in the Details: Director Minutes and Liability
What should director minutes say and how detailed should they be? It likely depends on the maturity of the company, the personality of its management and the input of its lawyers. Partner Stephen Honig reviews the considerations in conjunction with the ground rules set forth in the NACD “Directors’ Guide” in this column for Carrier Management.
7th Circuit Upholds Prior Knowledge Provision in Claims-Made Policy
The Seventh Circuit Court of Appeals decided on April 2, 2013 that an Indiana law firm was not entitled to coverage for a claim made and reported in a second policy period where the insured reasonably had knowledge that a claim might be made during the first policy period. Koransky, Bouwer & Poracky v. The Bar Plan Mutual Insurance Co., No. 12-1579, 2013 U.S. App. LEXIS 6558 (7th Cir. Apr. 2, 2013). As the Court noted (in affirming a District Court decision to the same effect), “a reasonable attorney would have recognized that his failure [to deliver a contract during the first policy period] . . .was an omission that could reasonably be expected to be the basis of a malpractice claim.” Continue reading “7th Circuit Upholds Prior Knowledge Provision in Claims-Made Policy”
Exhausting Policy Limits When Settling Less than All Lawsuits
In his latest article, Thomas R. Newman explains his thoughts on handling multiple claims with insufficient limits to cover an insured’s total potential exposure, when not all of the claims are settled.
Mr. Newman practices in the areas of insurance and reinsurance law, including coverage, claims handling, contract drafting and arbitration and litigation. He has served as lead counsel in more than 55 reinsurance arbitrations, representing both cedents and reinsurers. He is often called upon to act as an expert witness in insurance cases in the United States and in London.
To read this article, please click here.
London Market Insurers Prevail Against BP in Insurance Buyback Dispute
The California Court of Appeal has affirmed a judgment that certain Underwriters at Lloyd’s, London and certain London market insurance companies (London Market Insurers) were entitled to consider all subsidiaries as part of an insurance buyback agreement they had with one of the world’s largest oil companies. On September 13, 2012, a three-judge panel of the First District Court of Appeal issued an opinion in Certain Underwriters at Lloyd’s, London v. BP America, Inc., et al., Case No. A132298. At issue was more than $1 billion in liability insurance placed by the Atlantic Richfield Company (ARCO) in the London insurance market.
Continue reading “London Market Insurers Prevail Against BP in Insurance Buyback Dispute”
State of California v. Continental Insurance
The California Supreme Court issued its decision in the State of California v. Continental Insurance case on August 9. In a unanimous opinion, written by Justice Ming Chin, the Court held that the policy language at issue provides for “all sums” allocation and permits stacking of policy limits.
The Court’s opinion reflects a focus on the particular insurance policy wording at issue. In its first holding, the opinion states: “Under the CGL policies here, the plain ‘all sums’ language of the agreement compels the insurers to pay ‘all sums which the insured shall become obligated to pay. . . for damages . . . because of injury to or destruction of property ….” The Court went on to hold that the policy language before it “does not limit the policies’ promise to pay ‘all sums’ of the policyholder’s liability solely to sums or damage ‘during the policy period.’”
Continue reading “State of California v. Continental Insurance”
“Every Breath” of Asbestos Is Not a Substantial Factor in Pennsylvania
The Pennsylvania Supreme Court unanimously found that plaintiffs cannot rely on the theory that “every breath” is a substantial contributing factor in causing an asbestos-related disease in an asbestos case involving friction exposures, i.e., brakes and clutches. The May 23, 2012, ruling in Diana K. Betz v. Pneumo Abex LLC (“Simikian”) overturns the en banc decision of the state Superior Court, which the Pennsylvania Supreme Court found to be based on an “unduly cramped perspective.” This decision changes the face of asbestos litigation in Pennsylvania and may have farther-reaching impact. Plaintiffs can no longer lump together exposures and say all exposures contributed to disease. This brings asbestos litigation in line with the mainstream causation requirements for other substances—plaintiffs must be able to prove that each product was a substantial factor in their disease. (Note: Duane Morris represented defendant Ford in this case.)
To read the rest of this alert, please visit the Duane Morris website.