Matthew D. Stockwell recently published an article in the June 2016 edition of Claims magazine, a PropertyCasualty360 publication, titled “Is That Product Liability Claim Covered?” In the article, he discusses Commercial General Liability insurance policies and whether or not these policies cover claims of bodily injury and property damage.
Ever since the U.S. Court of Appeals for the Second Circuit decided Zeig v. Mass. Bonding & Insurance Co. in 1928, it has been well-settled that a policyholder can compromise a disputed claim with its insurer for less than the full limits of the policy without putting its rights to excess coverage at risk. In a seminal opinion by Judge Augustus Hand, the Zeig court said, “We can see no reason for a construction so burdensome to the 
insured,” to require collection of the full amount of primary polices in order to exhaust them. The Zeig court emphasized that a compromise payment by the primary insurer discharges the limits of the primary coverage, while the excess insurer is unharmed, since it must pay only the amount exceeding the attachment point of its policy.
Feeling wired about risks arising from the Telephone Consumer Protection Act? Maybe you should. The TCPA subjects businesses that use text messaging, auto-dialing, and bulk faxing for advertising and marketing to potential class action litigation. Financial institutions, various supermarket chains, and recently Caribou Coffee have all been targeted in TCPA class actions. But policyholders who get static over such claims are not without recourse: several lines of liability insurance may answer the call.
Insurance covers the unexpected. Courts sometimes struggle to assess what an insured did expect, didn’t expect, or sometimes, should have expected. Contractors, construction firms and others should bear this in mind in their daily operations and when seeking a defense from their insurance companies.
In Auto-Owners Insurance Co. v. Ryan Stevens Construction, Inc. the U.S. District Court for the District of Utah recently held that a contractor’s commercial general liability insurance carrier had no 
duty to defend a contractor who should have expected property damage resulting from its use of certain equipment on a construction project. The decision cautions contractors around the country to consider the expected consequences of their on-site actions to avoid arguments from insurers that any resulting damages are not accidental.
Many policyholders assume that if an insurer pays to defend a claim against them, the policyholder will never be asked to pay those costs back. And most often they’re right. But sometimes the insurer may demand that the policyholder pay back some or all of the defense costs. Such insurers treat the contractual duty to defend or to indemnify the insured for defense costs as little more than a lending facility.
Most of the time, such insurer demands are unjustified. But companies should understand when and under what circumstances insurers might seek reimbursement or recoupment of defense costs so they can avoid agreeing to do so unnecessarily or at least plan in advance financially.
Recently, we wrote about the breadth of the “duty to defend,” and its importance to policyholders. As if on cue, late last week the Ninth Circuit Court of Appeals confirmed in Ash Grove Cement Company v. Liberty Mutual Insurance Company that, under Oregon law, an insurer’s duty to defend begins with an information request from the Environmental Protection Agency, and continues for the duration of the regulatory process. 
The particular information request at issue in Ash Grove Cement is known as a “104(e) letter,” which is issued by the EPA under section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA). As companies that have owned or operated a contaminated site know from experience, a 104(e) letter or a similar request under state environmental law typically is the first step in a regulatory enforcement process under which they face strict and retroactive liability for the costs of investigating and cleaning up the site. The ruling in Ash Grove Cement means that defense cost coverage begins at this critical juncture and continues until site investigation and cleanup is completed.
What a difference a word makes! Today’s words are “the,” “an,” “any,” and especially “you.”
Most Commercial General Liability policies include a coverage enhancement known as a “separation of insureds” or “severability of interests” clause. This clause states that the policy’s coverage is to apply “separately” to each insured against whom a claim is made. When reviewing coverage for a CGL claim in which more than one insured is involved, it’s vital to consider the separation of insureds provision. This clause is too frequently overlooked. Continue Reading ›
They do some things differently in London. But just because they have different customs across the pond doesn’t mean they get to play by different rules—at least not in American courts. 
That was the message a federal magistrate judge in the Eastern District of New York delivered when she ruled that Certain Underwriters at Lloyd’s had waived attorney-client privilege by communicating with their counsel through a London broker.
In Texas and other states, the mineral owner can freely use the surface estate to the extent reasonably necessary for the exploration, development and production of oil and gas. That includes activities such as building roads, drilling wells and transporting equipment and personnel. But frustrated property owners are incr
easingly bringing nuisance claims based on bright lights, loud noises, traffic, dust, odors, wastewater and other effects of these activities. A question facing the oil and gas industry is whether the costs of such nuisance claims are covered by insurance.
Policyholder Pulse