NY Insurance Law Reverts to Its Pre-2013 Ways
The New York Court of Appeals Decides That Servidone Is Good Law, or at Least Good Enough Law, Declines to Change Rule That Insurers May Assert Indemnification Coverage Defenses Even if It Breached Duty to Defend
The New York Court of Appeals has issued its opinion on re-argument in the case that sent shock waves through the New York coverage bar last year, K2 Investment Group, LLC v. American Guarantee and Liability Ins. Co. K2 appeared to overrule the well-established rule that a breach of the duty to defend does not bar an insurer from contesting coverage for indemnification. Continue reading
A recent Connecticut case gives companies yet another reason to purchase cyber liability coverage. On January 14, 2014, the Connecticut Appellate Court issued a decision in Recall Total Information Management, Inc., et al. v Federal Insurance Company, et al. addressing coverage under a general liability policy for data privacy breach response costs. Continue reading
Who contributes to the pot?
Despite a recent case to the contrary, the answer in future will likely be “yes.”
Graphics Arts Mutual Ins. Co. v. D.N. Lukens, Inc. – which Harvey Nosowitz discussed here, focusing on how it conflicts with another federal District Court case on the question of allocation of defense costs – ruled that insureds did not have to contribute to a settlement over which the insurer had full control and to which the insureds did not give written consent. Continue reading
What rights remain to a breacher of the duty to defend?
At the K2 Re-Argument, the Court Asks: Which Rule Is Better Public Policy?
K2 Investment Group, LLC v. American Guarantee and Liability Ins. Co. shocked the coverage bar last year. On January 7, 2014, the New York Court of Appeals heard re-arguments in the case. At the rehearing, the Court implicitly acknowledged that its 2013 decision in K2 would change New York from a jurisdiction where an insurer’s breach of the duty to defend does not bar the insurer from raising coverage defenses to the duty to indemnify (the rule in the majority of jurisdictions), to one where the insurer is barred from contesting coverage. The Court’s questions to the attorneys on both sides focused to a great extent on which rule was preferable as a matter of public policy. Continue reading
Putting Product Liability into the Right Category
Product liability law lies at the intersection of tort and contract law. In some jurisdictions (my home state of Massachusetts is one) a product liability claim is pled as a breach of warranty. This can lead to disputes concerning the duty to defend under a liability insurance policy, because the general rule is that negligence claims are covered, but claims for breach of contract are not.
In recent years, courts have frequently revisited the issue of whether allegations of breach of warranty defeat a duty to defend, in an effort to reconcile commercial general liability policy language with the many variants of pleadings in both product liability and construction defect claims. Continue reading
You have managed to find employment as a soldier, but does that mean you have any expertise?
Forty Years as an Adjuster Does Not an Admissible Opinion Make
Experience may make you qualified to testify as an expert. But only laying a proper foundation by translating that experience into knowledge of accepted industry practices will get your opinion into evidence.
The District of Massachusetts recently allowed an insurer’s motion to strike a policyholder’s claims handling expert because he did not adequately link his opinion to industry standards. Continue reading
Is the end nigh? Or will its settlement offer
be deemed reasonable?
Insurer Misses the Boat and Court Denies Summary Judgment in Claimant’s Unfair Settlement Practices Suit
A recent Massachusetts Superior Court ruling tells of a journey fraught with peril for a liability insurer trying to reach the safe harbor of Massachusetts General Laws Chapter 93A. This statute permits a judge to award double or treble damages if an insurer sued for unfair claims settlement practices refuses to settle when liability is reasonably clear. However, the statute shields a defendant from the threat of multiple damages if he or she makes a reasonable settlement offer in response to the plaintiff’s pre-suit demand letter.
In Boyle v. Zurich American Insurance Company, the insurer’s seemingly reasonable settlement offer fell short of the mark needed to win summary judgment. This case has important warnings for insurers seeking to rely on the safe harbor, as well as pitfalls to avoid when learning of a default against an insured. Continue reading
Clam lovers, Beware!
Businesses are also going to feel
the pain of NFIP’s redrawn flood maps
The National Flood Insurance Program’s redrawing of flood maps and roll-back of flood insurance subsidies for some properties have caused an uproar from homeowners in coastal and other areas where flood insurance is required by mortgage lenders. It may be less commonly known that NFIP is also phasing out subsidies for business properties. So if you notice the price of a clam roll starting to climb, your favorite seaside eatery may be passing along its rising insurance costs. If it’s your premiums that are rising, grants may be available for implementing flood mitigation measures (picture your clam shack on stilts), and implementing those measures may lower your flood insurance premiums. Continue reading
This guy’s D&O policy has him covered
D&O Policy May Cover Judgment Against Company for Intentional Misrepresentations During Negotiations Leading To Asset Purchase Agreement
Rhode Island District Court Denies Insurer’s Motion to Dismiss
After a jury found that Versyss was liable to TranSched for breach of contract and intentional misrepresentation, TranSched sued Versyss’ directors and officers liability insurer, Federal, to collect on the judgment. Federal moved to dismiss in reliance on the D&O policy’s contract and fraud exclusions. It may sound like those policy exclusions would bar coverage, but, as often happens, a closer reading of the policy led to a different conclusion. Continue reading