Commercial umbrella policies typically provide two types of liability coverage. Like excess policies, umbrella policies provide additional coverage in the event that the limits of the underlying primary policy are exhausted. What makes such policies unique, however, is that they also provide coverage for claims or suits that are not covered by primary insurance but are covered under the terms of the umbrella policies. In those instances, an umbrella insurer is supposed to “drop down” to provide primary coverage to the insured. Continue Reading…
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Tagged as:
Broad Defense Obligation,
insurance coverage,
Legacy Vulcan Corp. v. Superior Court
In dealing a blow to the insurance industry, the California Supreme Court, in Minkler v. Safeco Ins. Co., recently held that the existence of a “separate insurance” clause in a homeowners’ policy precluded the insurer from asserting the policy’s intentional acts exclusion to deny coverage for the mother (the named insured) based on the alleged intentional conduct of the son (also deemed “an insured” because he was a relative resident of the named insured’s household). Specifically, the Supreme Court answered “no” to the certified question asked by the United States Ninth Circuit Court of Appeal: “Where a contract of liability insurance covering multiple insureds contains a severability clause, does an exclusion barring coverage for injuries arising out of the intentional acts of ‘an insured’ bar coverage for claims that one insured negligently failed to prevent the intentional acts of another insured?” Continue Reading…
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Tagged as:
insurance coverage,
Minkler v. Safeco Ins. Co.,
policy interpretation
In a recent New Jersey appellate decision entitled Somerset Med. Ctr. v. Exec. Risk Indem., Inc., 2010 N.J. Super. Unpub. LEXIS 605, A-6214-08T2 (App.Div. Mar. 22, 2010), the court was faced with the question of whether a bodily injury exclusion in Somerset Medical Center’s directors and officers liability insurance policy excluded coverage for the negligent hiring and supervision of a nurse who pled guilty to committing numerous murders while in the employ of Somerset. More specifically, nurse Charles Cullen pled guilty to approximately twenty-nine murders (and six attempted murders) of patients at various health care facilities, including the Somerset facility. Lawsuits against Somerset and its officers then followed, alleging “negligent hiring, negligent supervision and entrustment, negligent reporting, and negligent continuation of employment.” Id. at *2. Continue Reading…
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Tagged as:
D&O insurance,
insurance coverage,
insurance recovery,
negligent hiring,
new jersey,
Somerset Med. Ctr. v. Exec. Risk
Although beer pong has made a number of curious contributions to American jurisprudence (see, e.g., University of Kansas v. Sinks, 644 F.Supp. 2d 1287 (D.Kan. 2008), involving trademark issues over the sale of Kansas Co-Ed Naked Beer Pong t shirts; Crusselle v. State, 2010 Ga. App. 375 (Ga. Ct. App. 2010), in which beer pong resulted in defendant “driving like a fool”), beer pong has now also, at least indirectly, provided a favorable decision for policyholders. Continue Reading…
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Tagged as:
Copp v. Nationwide Insurance Company,
Crusselle v. State,
Duty to defend,
general liability,
insurance coverage,
insurance recovery,
policy interpretation,
University of Kansas v. Sinks,
Virginia Supreme Court
In Lagstein v. Certain Underwriters at Lloyd’s, London, __ F.3d __ (9th Cir. June 10, 2010), the Ninth Circuit ruled that a district court had erred when it vacated a $6 million arbitration award against Lloyd’s under a disability policy. In doing so, the Ninth Circuit reaffirmed the extreme deference to be shown arbitration awards and the difficulties that parties face in seeking to vacate such awards. In light of the lack of viable judicial review, insureds must be careful to take all the steps necessary to protect their interests throughout the actual arbitration process. This is especially true given the prevalence of arbitration provisions in insurance policies today. Insureds must be aggressive in defending their interests in such policy disputes because there likely will be little recourse once an arbitration award is handed down by an arbitration panel. Continue Reading…
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Tagged as:
Arbitration,
Disability,
FAA,
Federal Arbitration Act,
Lloyd's
Product and food recalls, such as the well-publicized car recalls earlier this year and the recent recall of 15 million pounds of SpaghettiOs, continue to plague large and small businesses across industries. For the month of May 2010 alone, the Consumer Products Safety Commission (“CPSC”) and the Food and Drug Administration (“FDA”) listed nearly 50 product and food recalls, including the recall of 1.8 million toy dart guns and 1.2 million water bottle spouts. The May 2010 recalls involved a broad range of products and industries, including electronics, machinery, pharmaceuticals, sporting goods, house wares, clothing, baby food and various types of produce. Because recalls and corresponding liabilities can be hugely expensive, insurance procurement and coverage issues should be considered in connection with any recall risk assessment or plan. Continue Reading…
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Tagged as:
food recall,
product recall,
sistership exclusion
The court in Fulton Boiler Works, Inc. v. American Motorists Ins. Co., 5:06-CV-1117, 2010 U.S. Dist. LEXIS 28756 (N.D.N.Y March 25, 2010), held that two CGL insurers were obligated to pay for the entire cost of defending thousands of underlying asbestos bodily injury claims, without any contribution from their mutual insured, because they could not prove that the underlying claims involved “‘occurrences’ solely during self-insured periods, and that there is thus no possible factual or legal basis for finding liability covered by the policy.” Id. at **22-23. Continue Reading…
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Tagged as:
allocation,
asbestos,
duty to advance defense costs,
Duty to defend,
long-tail,
New York Insurance Law,
potential for coverage,
potentiality standard,
pro rata
When policyholders are faced with litigation and discovery requests in that litigation, it is common for disputes as to the privileged nature of various communications to arise. Often, those disputes focus on an underlying plaintiff’s efforts to discover communications between the policyholder or its insurer(s) on matters of interest to the plaintiff and the development of its case.. On occasion, however, these disputes can also implicate other third parties with whom the policyholder has had communications, such as consultants, agents, or the policyholder’s brokers. Are communications involving policyholders and their brokers privileged? No single, clear cut answer to this question can be provided, with the outcome often depending upon the specific circumstances in which the communications arose, and the purpose for which the communications were made. Continue Reading…
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Tagged as:
In Re Tetra Technologies Inc.,
insurance coverage,
insurance recovery,
policyholder communications
