We previously wrote about the growing likelihood that insurance companies would face claims for business interruption and contingent business interruption insurance claims as their insureds looked to cope with the broad effects of the novel coronavirus outbreak and response. Heating Up: New Orleans-Based Oceana Grill Seeks Insurance Coverage for Coronavirus-Caused Business Interruption. Now, state and federal governments are beginning to consider ways that they might compel such coverage.
Last week, members of the federal government wrote to insurance industry leaders urging them to expand commercial business interruption coverage for COVID-19 losses. In response, the insurance industry leaders replied, “Standard commercial insurance policies offer coverage and protection against a wide range of risks and threats and are vetted and approved by state regulators. Business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19.” Continue reading Statutes Compelling Coronavirus Business Interruption Insurance Should Face Constitutional Constraints
By Sheila Raftery Wiggins
The Supreme Court of New Jersey – the highest court in New Jersey – held that the failure to comply with the notice provisions of the claims-made policy constitutes a breach of the policy, permitting the insurer to decline coverage to a sophisticated insured without demonstrating prejudice to the insurer caused by the delay.
We previously reported on where the Appellate Division ruled, in Templo Fuente de Vida Corp. and Fuente Properties, Inc., that 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. The New Jersey Appellate Division determined that six months or more is not “as soon as practicable.” Continue reading No Prejudice in New Jersey Needed to Bar Coverage to Sophisticated Insured for Delay in Notice Under Claims-Made Policy
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.
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)
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.
A California federal court recently issued a summary judgment ruling after interpreting two “other insurance” clauses in California State Automobile Inter-Insurance Bureau v. Progressive Casualty Insurance Company, 2012 U.S. Dist. LEXIS 57996 (N.D. Cal, April 25, 2012). One insurer argued that the “other insurance” clauses conflicted with each other, but the Court disagreed and found no conflict where one other insurance clause specifically provided for excess coverage in certain circumstances.
The policyholder had a homeowner’s insurance policy with California State Automobile Inter-Insurance Bureau (“AAA”) and a watercraft policy with Progressive Casualty Insurance Company (“Progressive”). Both issued liability limits of $500,000.
Continue reading California Federal Court Finds No Conflict with Allegedly Competing Other Insurance Clauses
Not all policies state aggregate limits only for the Products and Completed Operations hazards. Some provide a total limit of liability. For example, many umbrella policies use the following Limits of Liability wording:
The limit of the company’s liability shall not exceed the amount stated in Item 2(a) of the declarations as a result of any one occurrence. The company’s liability shall be further limited to the amount stated in item 2(b) of the declarations in the aggregate for each annual period during the currency of this policy separately in respect of (1) the products hazard; (2) the completed operations hazard; and (3) personal injury by occupational disease sustained by any employees of the insured;
Continue reading Do All CGL Policies State Aggregate Limits Only For Products and Completed Operations Hazards?