Daniel Heidtke – Page 2 – Duane Morris Insurance Law

April 14, 2020 by Duane Morris

Lawmakers Continue Efforts to Compel Coronavirus Business Interruption Insurance

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”

March 24, 2020 by Daniel B. Heidtke

Statutes Compelling Coronavirus Business Interruption Insurance Should Face Constitutional Constraints

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”

February 13, 2020 by Duane Morris

California Court of Appeal: Third Party, Additional Insured Bound by Policy’s Arbitration Clause

By Daniel B. Heidtke

In an opinion filed on the last day of 2019, the California Court of Appeal, Third District, reversed a trial court’s holding that an additional insured was not bound by an arbitration agreement in an insurance policy. In Philadelphia Indemnity Insurance Company v. SMG Holdings, Inc., Case No. C082841 (certified for publication on January 28, 2020), the court held that an arbitration agreement in a commercial general liability policy (“CGL”) issued by Philadelphia Indemnity Insurance Company (“Philadelphia”) bound SMG Holdings, Inc. (“SMG”), a “third party beneficiary” under the policy that was also “equitably estopped” from avoiding the arbitration clause. The court reversed the trial court, vacated its order denying Philadelphia’s petition to compel arbitration, and directed the trial court to order arbitration of the coverage dispute. Continue reading “California Court of Appeal: Third Party, Additional Insured Bound by Policy’s Arbitration Clause”

October 5, 2015 by Duane Morris

Nevada Supreme Court Holds That California Cumis Rule Applies In Nevada, But An Actual Conflict Is A Prerequisite For Independent Counsel

By Dominica C. Anderson and Daniel B. Heidtke

In a 6-0 decision issued on September 24, 2015, the Nevada Supreme Court held that the California rule first announced in San Diego Fed. Credit Union v. Cumis Ins. Soc’y, 162 Cal. App. 3d 358 (1984), and the analysis of the California Court of Appeal’s decision in Fed. Ins. Co. v. MBL, Inc., 160 Cal. Rptr. 3d 910, 920 (Ct. App. 2013), a case in which Duane Morris LLP represented the insurer, also applies in Nevada. With its decision in State Farm Mutual Automobile Ins. Co. v. Hansen, 131 Nev. Adv. Op. 74, Case No. 64484 (2015), the Nevada Supreme Court held Nevada law requires an insurer to provide independent counsel for its insured when an actual conflict of interest arises between the insurer and the insured. Consistent with California law on the matter, the Court also held that a reservation of rights does not create a per se conflict of interest between insurer and insured. Continue reading “Nevada Supreme Court Holds That California Cumis Rule Applies In Nevada, But An Actual Conflict Is A Prerequisite For Independent Counsel”