January 2015 - The Insurance & Reinsurance Report

January 26, 2015 Policy Conditions, Considerations, Construction, and Formation

Indiana Supreme Court Addresses Monetary Threshold for Secondary Liability in Workers Compensation Case

In Young v. Hood’s Gardens, Inc. 2015 Ind. LEXIS 46 (Jan. 22, 2015), the Indiana Supreme Court reversed a lower court ruling granting summary judgment to a business owner who had sought a declaration that it was not required to pay workers compensation benefits to the employee of a contractor it had hired for certain tree removal services.

Hood’s Gardens, Inc., contracted with Discount Tree Extraction to remove a tree at Hood’s place of business. Discount orally quoted a price of $600 for the work, …

January 26, 2015 Occurrence

PA Supreme Court Clarifies Trigger of Coverage for Injury to Livestock

The Supreme Court of Pennsylvania recently interpreted the trigger of coverage applicable to property damage, including the first manifestation and multiple trigger approaches. The Supreme Court held in Pennsylvania National Mutual Casualty Insurance Co. v. St. John, 2014 WL 7088712 (Pa. Dec. 15, 2014), that, under the “first manifestation” theory, an injury triggers coverage under the policy in effect when the injury or damage is discovered, regardless of the insureds’ knowledge to its cause. Additionally, the court refused to extend the “multiple trigger” theory beyond …

January 21, 2015 Policy Conditions, Considerations, Construction, and Formation

Compulsory Insurance Doctrine Negates Insurer’s Late Notice and Cooperation Defenses, 8th Circuit Says

In Northwest Airlines, Inc. v. Professional Aircraft Line Service, No. 13-1754, 2015 U.S. App. LEXIS 546 (8th Cir. Jan. 14, 2015), the Eighth Circuit rejected an insurer’s attempt to deny coverage based on late notice and failure to cooperate defenses because the insured was required by county ordinance to maintain insurance.

Westchester Fire Insurance Company insured Professional Aircraft Line Service (PALS) under a hangarkeepers liability insurance policy. PALS entered into a contract with Northwest Airlines to service and maintain Northwest’s aircraft at McCarran International Airport …

January 21, 2015 Professional Liability

Demand for Refund Constitutes a Claim under Professional Liability Policy Says Eighth Circuit

In Philadelphia Consolidated Holding Corp. v. LSI-Lowery Systems Inc., 2015 U.S. App. LEXIS 349 (8th Cir. Jan. 9, 2015), the Eighth Circuit affirmed the district court’s grant of summary judgment in favor of Philadelphia Consolidated Holding Corporation, d/b/a/ Philadelphia Insurance Companies (PIC). The Eighth Circuit found that PIC was not required to defend and indemnify its insured, LSI-Lowery Systems, Inc. (LSi) because LSi failed to satisfy the policies’ claims made and reported requirement.

In the underlying suit, LSi sold business software to the claimant, …

January 20, 2015 Other Insurance

Failure To Plead That Excess Liability Policies Were Implicated Leads To Dismissal Of Third Party DJ Complaint

In this declaratory judgment action, the court held that defendants Travelers Indemnity Company and Travelers Casualty and Surety Company (Travelers) had a duty to defend its insured Chicago Pneumatic Tool Company (Chicago Tool) for silica- and asbestos-related claims, prompting Traveler to file a second amended third party complaint against Chicago Tool’s other insurers, AIU Insurance Company (AIU), Century Indemnity Company (Century Indemnity), Liberty Mutual Fire Insurance Company (Liberty Fire), Trygg-Hansa Insurance Company, Ltd. (Trygg-Hansa), and Industria Insurance Company (Industria). In response to the complaint Industria …

January 15, 2015 Policy Conditions, Considerations, Construction, and Formation

The Importance of Aesthetics: Minnesota Supreme Court Weighs in on Matching Colors

In Cedar Bluff Townhome Condo. Ass’n v. American Family Mutual Insurance Company, 2014 Minn. LEXIS 661 (Minn. Dec. 17, 2014), the Minnesota Supreme Court held that a property insurer was on the hook for replacing all the siding of certain apartment buildings, whether damaged or undamaged, when matching replacement siding for the damaged portions could not be found due to the faded coloration of the existing siding.

American Family Mutual Insurance Company (AFMIC) insured 20 multi-unit residential buildings owned by Cedar Bluff Townhome Condominium …

January 15, 2015 Emerging Issues

MetLife Files First Challenge to SIFI Designation

MetLife is challenging its designation as a nonbank systemically important financial institution (SIFI). Dodd-Frank created the Financial Stability Oversight Council (FSOC) which comprises the heads of federal financial regulators and a voting insurance specialist and is chaired by the Treasury Secretary. So far, three insurance companies, Prudential, AIG and MetLife, have received the nonbank SIFI designation. However, MetLife is the first to take advantage of the judicial review provision in Dodd-Frank.

Dodd-Frank provides that within 30 days of a final determination by the FSOC. A …

January 15, 2015 Environmental

Wisconsin High Court Gets Its Hands Dirty by Ringing in the New Year with Two Decisions about Coverage for Feces Contamination

The Wisconsin Supreme Court recently addressed the pollution exclusion in two similar decisions involving contaminated well water.

First, in Preisler v. General Casualty Insurance Co. et al., 2014 WI 135, the Supreme Court affirmed an order of summary judgment in favor of Rural Mutual Insurance Company, Regent Insurance Company, and General Casualty Company, finding that the pollution exclusion barred coverage.

The underlying suit arose out of tainted well water that caused Fred and Tina Preisler’s cattle to die at an unexpected rate. The contamination …

January 14, 2015 Bad Faith and Extra-Contractual Liability / Excess Insurance

Missouri High Court Allows Excess Insurer To Proceed with Bad Faith Refusal to Settle Claim Against Primary Insurer

In Scottsdale Insurance Co. v. Addison Insurance Co., No. SC93792, 2014 Mo. LEXIS 335 (Mo. Dec. 9, 2014), the Supreme Court of Missouri reversed the trial court’s grant of summary judgment in favor of United Fire & Casualty Company (United Fire) with regard to the bad faith refusal to settle claim asserted by Wells Trucking, Inc. (Wells Trucking) and Scottsdale Insurance Company (Scottsdale).

The underlying dispute arose from an automobile collision involving a truck driver employed by Wells Trucking that resulted in the death …

January 13, 2015 Uncategorized

GAO and MITRE Sponsor Discussion on Information Sharing During a Crisis

During a crisis, good information is critical to ensure a proper and prompt response. One big challenge is how to ensure good information sharing both between different levels of government and even between agencies at the same level of government.

On January 26, 2015, the Government Accountability Office (GAO) and The MITRE Corporation (a not-for-profit organization that operates several federally funded research and development centers) will sponsor a discussion on how governmental entities share data in the event of a crisis and subsequent recovery. Specifically, …