By Dominica Anderson, Philip Matthews and Daniel Heidtke
We previously wrote about the growing number of lawsuits by insureds seeking business interruption insurance coverage for business losses in response to the novel coronavirus and ways that state and federal governments were beginning to consider ways that they might compel such coverage.
The potential cost of business continuity losses is enormous. The Congressional Research Service issued a report to Congress on the financial impact to insurers for the cost of covering business interruption claims. The report explains that some industry sources estimate that the cost of covering business interruption claims ranges from $110 billion to $290 billion per month. In a more recent letter, insurance industry leaders explained, “recent estimates show that business continuity losses just for small businesses of 100 or fewer employees could amount to between $220 billion to $383 billion per month. Meanwhile, the total surplus for all of the U.S. home, auto, and business insurers combined to pay all future losses is only $800 billion.” Continue reading Lawmakers Continue Efforts to Compel Coronavirus Business Interruption Insurance
On January 13, 2015, the Illinois Appellate Court issued its opinion in Illinois Tool Works, Inc. v. Travelers Casualty and Surety Co., 2015 IL App. (1st) 132350 (1st Dist. 2015), wherein the court held the insurer had a duty to defend its insured against numerous vaguely pleaded toxic tort complaints. The central issue in Illinois Tool Works was whether facts extrinsic to the underlying complaint, known to both the insurer and insured, can abrogate the duty to defend. The Illinois Appellate Court held that undisputed extrinsic facts not pleaded in the underlying complaint cannot relieve an insurer of its duty to defend unless and until proven in the underlying action. Continue reading The Illinois Duty to Defend: Litigation Insurance against Groundless Suits Even When Extrinsic Facts Known to Both Insurer and Insured Would Otherwise Abrogate Coverage
Duane Morris partner Max H. Stern will be moderating a panel at the American Conference Institute’s (ACI) National Forum on Insurance Allocation on October 29, 2014 at the Carlton Hotel on Madison Avenue in New York. Mr. Stern’s session is titled, “In-House Roundtable: Counsel and Claims Professional Insights on New and Emerging Issues in Insurance Coverage and Allocation,” and will take place at 9:35 a.m.
For more information or to register for this event, please visit the American Conference Institute’s website.
For a claims-made policy, the policy holder is to provide notice of a claim: (1) during the same policy period in which the policyholder received the claim and (2) “as soon as practicable.” Otherwise, the claim may be denied because of late notice. New Jersey has determined that six months or more is not “as soon as practicable.”
Holding: The Superior Court of New Jersey, Appellate Division, held in Templo Fuente de Vida Corp. v. National Union Fire Insurance Company of Pittsburgh, P.A., that: (1) notice of a claim was not provided “as soon as practicable” when sent six months after service on the insured of the underlying complaint and (2) an insurer on a claims-made policy does not have to show that it was prejudiced by the late notice.
Continue reading Six-Month Delay Bars Coverage in NJ Under Claims-Made Policy
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.
Continue reading Duane Morris Partner Cyndie Chang to Present at the ABA Tort Trial and Insurance Practice Section’s Spring Conference
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