Published on:

What happens when you have a claim arising from circumstances that unfolded over many policy years—like environmental property damage or asbestos bodily injury claims? Which policies are triggered? How much coverage does each policy provide? Unsurprisingly, insurers and policyholders disagree on the answers. And courts across the country have been grappling with the issue for decades.iStock-529679660-all-sums-allocation-300x225

Some courts apply the “all sums” approach, which allows a policyholder to recover in full—subject to policy limits—from any insurer whose policy has been “triggered.” Other courts apply the “pro rata” approach, under which each triggered insurer must pay only a portion of the loss allocated to its policy periods. This is a closely watched issue among the insurance bar as it can dramatically impact the amount of a recovery depending on the contours of the policyholder’s insurance program.

Continue reading →

Published on:

In the aftermath of events like 2017’s hurricanes, especially for companies that were impacted multiple times, there are usually more things in need of attention than there is attention to go around.iStock-151562870-300x225 Reviewing insurance policies is one—but still only one—of those things. In the initial stages of dealing with these kinds of events, it is natural to focus on big-picture policy items like limits, deductibles, coverages and exclusions. Only in the second pass do companies usually focus more closely on the substantive wording of various provisions. In undertaking this second (or third or fourth) pass, it is important to zero in on the exact words of the policy to avoid overlooking details that may make all the difference as to whether coverage exists or not.

Here are some examples that are likely to come up in the wake of storms like Harvey, Irma, Maria and Nate.

Continue reading →

Published on:

construction-insurance-tailoredIn the world of construction, whether you’re a lender, owner, contractor or subcontractor, your success hinges largely on risk management. While there’s no substitute for sound business and construction practices (such as proper preconstruction planning, proven construction means and methods, use of experienced personnel, and stringent safety programs), among the most important project risk allocation tools are the contracts governing the various parties’ rights and obligations. Within those contracts, risk is primarily allocated through indemnity and insurance requirement provisions. When preparing insurance requirements for construction-related contracts, it is crucial to ensure these pieces are well-fitted and comfortable, like a good piece of tailoring. This requires the indemnity and risk obligations associated with each project discipline to be clearly identified and addressed.

Continue reading →

Published on:

potholes policiesAs summer comes to a close, road repair crews across the country are identifying the street repairs and potholes that must be filled before the cold weather approaches. Now is also a good time for policyholders to identify some of the “potholes” that may accompany their claims-made insurance policies and get them filled before it is too late.

Continue reading →

Published on:

In the wake of Hurricanes Harvey and Irma, policyholders can expect insurers to put forward strong objections to some of the most consequential claims asserted by insureds. In a recent client alert, our colleagues Joe Jean, Geoffrey Greeves and Vince Morgan provided insight into business interruption insurance and dealing with the aftermath of wide-impact catastrophes.

Published on:

iStock-511353393-referee-300x225California law has long held that an insurer may not use declaratory relief or other tactics to prejudice the defense of its policyholder in an underlying lawsuit. But in their zeal to avoid coverage, and despite California Supreme Court precedent, insurers sometimes employ tactics that actually increase their policyholder’s risk of liability in the underlying action, contrary to the very purpose of liability insurance. That was the case in the coverage action between football helmet manufacturer Riddell and its liability insurers, which is pending in California state court, where certain London Market Insurers tried to require the production of extensive discovery before that substantially identical production took place in the underlying product liability action.

Continue reading →

Published on:

An unexpected or catastrophic loss can force any company out of business, even if it is insured.  You must understand your company’s risks and how your insurance policies cover those risks in order to manage them and maintain stability.

Having the correct insurance in place is only the first step. Property and business interruption insurance policies are often complex, and your suppliers, customers and other business partners’ insurance situation may have a direct impact on you as well.  Even if your business doesn’t suffer any direct physical damage to its facilities following a natural disaster or other loss, your customers or suppliers may have, and that could result in what is known as a “supply chain” or “contingent business interruption” loss of revenue and sales.  If you are unprepared when a disaster strikes, you may miss out on substantial amounts of insurance coverage to which you may be entitled.  The time to prepare is before a disaster occurs.  Take the time now to understand your insurance coverage and other risk transfer methods and opportunities.  Know your rights.  And put a plan in place to protect yourself, your employees, and your property before the loss occurs.  Then, if disaster strikes, you’ll be in a better position to make it through and to access your insurance coverage to help restore operations.

Continue reading →

Published on:

91509892-b-coverage-e1504651099803-199x300Coverage B under traditional Commercial General Liability (CGL) policies may be the least understood coverage that nearly every company carries. Coverage B provides liability protection for claims of Personal and Advertising Injury, such as false arrest, libel or slander, and violation of a person’s right to privacy, among others. Yet with so much recent focus on cyber liability insurance and the protection that these policies can provide for the inadvertent exposure of personal information stored electronically, Coverage B gets little attention. This is mostly deserved, as many CGL policies expressly exclude coverage for the loss or exposure of electronic data, and Coverage B applies in mostly non-traditional circumstances. Nonetheless, it is important to remember that for many claims, particularly those involving non-traditional facts, Coverage B will apply.

Recent events highlight the importance and continued relevance of Coverage B. For example, a recent case in the news involves a health insurer being sued by its insureds for mailing them information regarding HIV medication in transparent envelopes, thereby exposing their identity and the medication they were seeking. The suit alleges that the insurer negligently revealed confidential information and, given the reported facts, should trigger Coverage B (as well as other coverages).

Coverage B also applies in circumstances beyond improper disclosure of confidential information. In another recent case, a developer was sued by one of its occupying tenants because construction equipment necessary to expand the development blocked the ingress and egress to the tenant’s property. The CGL insurer initially denied the developer’s request for defense, contending that there were no allegations of “personal injury” or “property damage” necessary to trigger Coverage A. The insured correctly responded that the claims brought against it included “invasion of the right to private occupancy,” thereby triggering the duty to defend under Coverage B. Upon further consideration, the CGL insurer agreed and provided the insured with a defense. The duty to defend one claim is the duty to defend all.

In another case, a general contractor working in a war zone was sued by one of its subcontractors for unpaid contract balance. In addition to seeking payment of the alleged outstanding balance, the subcontractor claimed that it was held against its will for a period of an hour by a group of armed mercenaries working on behalf of the general contractor. This allegation, although wholly unrelated to the underlying dispute of unpaid fees, was sufficient to trigger Coverage B under the general contractor’s CGL policy, providing the general contractor with defense and indemnity.

In short, Coverage B applies in many non-traditional circumstances (as well as more traditional ones), and should always be considered by companies when facing liability for claims other than “personal injury” or “property damage.”

Published on:

As the powerful storm that is Hurricane Harvey looms in the Gulf of Mexico, Houston attorneys Vince Morgan and Tamara Bruno discuss what businesses and other organizations in the affected area should do immediately in order to maximize insurance recovery.

Key Takeaways:

  • Category 3 Hurricane Harvey is projected to have sustained winds of 120 m.p.h. and disastrous amounts of rain, with a possible storm surge.
  • Business interruptions are already happening in advance of Harvey’s landfall.
  • Policyholders should take key steps to maintain and maximize insurance coverage for Harvey-related losses.
Published on:

In two posts earlier this year—South Carolina May No Longer Hold Insurers’ Reservations and The Insurer’s Mixed-Coverage Burden—we told you about an important decision issued by the South Carolina Supreme Court in Harleysville Group Insurance v. Heritage Communities, Inc. Those posts were written shortly after the court issued its original opinion on January 11, 2017. But on July 26, 2017, the court issued a new opinion replacing the original. So what has changed? Not much … and that’s a good thing for policyholders.iStock-817281638-update-300x232

Continue reading →