Articles Posted in Property Damage

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Insurance coverage disputes often turn on the meaning of the specific words used in a policy. Norwegian Hull Club v. North Star Fishing Co., currently pending in the U.S. District Court for the Northern District of Florida, presents a twist—it turns on the meaning of a blank space.

Last month, U.S. District Judge Robert L. Hinkle ruled that neither the policyholder nor the insurer was entitled to summary judgment regarding the interpretation of a critical policy provision, reasoning that an empty field rendered the clause ambiguous. But as the case now proceeds to trial, the most interesting part of the district court’s opinion might be its own blank space: contra proferentem, the argument it doesn’t address.

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GettyImages-1352455992-300x200Earlier in 2022, CBRE forecasted a 14.1% year-over-year increase in construction costs by year-end 2022, as labor and material costs continue to rise, despite the expectation that overall cost inflation for materials would begin to cool by the end of the year. Commercial construction costs have indeed increased, as Turner Construction Company’s Third Quarter 2022 Building Cost Index reported an 8.62% yearly increase from the third quarter of 2021, a 2.18% quarterly increase from the second quarter of 2022. In addition to supply chain issues for building materials, skilled labor shortages and construction wage growth persists.

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GettyImages-184320883-300x200As the number and severity of cyberattacks rise, the importance of insurance coverage to offset resultant loss becomes increasingly important. An opinion issued by the Ohio Court of Appeals is a happy reminder that there may be coverage for cyber-related loss even if you did not buy cyber-specific insurance and that policyholders should review their entire insurance portfolio when confronted by a cyber loss.

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GettyImages-1359747893-coal-ash-plant-300x200Early in 2021, we wrote about potential insurance implications that could arise from the then-new Biden Administration’s expected regulatory priorities. Among other things, we noted that heightened scrutiny on coal ash was expected. On January 11, 2022, the U.S. Environmental Protection Agency (EPA) confirmed that prediction, issuing a press release announcing “key steps” it is taking to “protect groundwater from coal ash contamination.” As companies with coal ash liabilities consider EPA’s new guidance and next steps, they should be aware that they may have insurance that could cover some of their coal ash cleanup costs.

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Hurricane-ida-98184957-e1633109271415-284x300After hitting the shores of Louisiana with winds of up to 172mph in late August, Hurricane Ida’s remnants barreled up to the northeastern United States, leaving waves of destruction in its wake. The deluge of rain—more than half-a-foot fell in just a few hours—turned streets and subway platforms into rivers. The catastrophic flooding caused by the record-breaking rainfall killed several dozen people, left thousands without power, and damaged countless homes and businesses. All told, Ida is said to have caused more than $50 billion in damage. And scientists predict that, because of climate change, heavy rainfall-producing storms like Ida will only become more and more frequent.

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Silhouette of black truck with white marijuana leaf on itThe legal cannabis industry in the U.S. is growing at an unprecedented rate and is projected to reach $73.6 billion by 2027. While federal law still classifies marijuana as a Schedule I drug, many states have legalized both medical and recreational marijuana. As state restrictions ease, new business opportunities continue to emerge.

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COVID-19-limitations-1289785555-300x200The United States declared a national emergency in response to COVID-19 on March 13, 2020, and states quickly followed with stay-at-home orders that impacted businesses and institutions nationwide. It has now been nine full months since the pandemic emerged in the United States and businesses began to shut down in the face of contamination and civil authority orders effecting restrictions on access to and use of their premises.

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GettyImages-1190580076-wildfire-300x200One word that aptly describes the devastation that is 2020 is “relentless.” The COVID-19 pandemic has caused both personal and economic suffering throughout the world for over six months. Against the backdrop of the already devastating effects of COVID-19, several regions in the United States have recently experienced powerful storms and historically large wildfires. The wildfires in the western United States and Canada have been especially catastrophic this year—burning millions of acres, forcing evacuations, damaging air quality, and creating blankets of smoke extending over much of the country. The fires have destroyed homes and businesses and will lead to hundreds or thousands of insurance claims under homeowners, commercial property, and business interruption policies.

What happens under First Party Property/Business Interruption insurance when more than one arguably covered cause of loss impacts a business at the same time?

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Back-to-office-costs-300x200As businesses around the world continue to assess when and how to reopen their offices, the marketplace has become saturated with innovative “back to office” products and services. Whether a business chooses to invest in the latest body temperature scanner (such as Kogniz, a thermal security platform that uses AI to track fevers from a distance), room occupancy monitor (such as Density, which measures the depth and body patterns of people walking through doors to ensure social distancing is enforced), or UV light sanitizing stations and self-sanitizing keyboards (such as the Cubby and Defender), the decision may be influenced, in part, by the availability of insurance coverage for the additional investment. At a more basic level, businesses may provide workers with personal protective equipment (PPE), such as masks, gloves and hand sanitizer, or make changes to their workspaces such as social distancing signage.

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GettyImages-470318916-liu-disgorgement-300x200Late in June, the U.S. Supreme Court issued a decision in Liu v. SEC, a closely watched case in which the Court in an 8-1 opinion curtailed the authority of the Securities and Exchange Commission (SEC) to seek disgorgement of profits from private parties in judicial enforcement proceedings. The Court articulated restrictions on the SEC’s disgorgement power, including (1) limiting disgorgement amounts to the net profits from wrongdoing, (2) limiting the SEC’s ability to seek disgorgement of profits on a joint and several basis, and (3) directing the SEC to return disgorged monies to aggrieved investors rather than depositing them in the U.S. Treasury. Although it does not address insurance issues directly, the Court’s analysis of the disgorgement remedy is bound to revive discussion of the issue of insurability of losses suffered as a result of settlements or judgments characterized as disgorgement.

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