Emotions Set Aside: Widow Denied Husband’s Life Insurance Benefits For Failure to Report Change in Health After Application

The case of Yafei Huang v. Life Insurance Co. of North America, in the U.S. Court of Appeals for the Eighth Circuit dealt with the denial of life insurance benefits — and is a strong reminder to consumers to read the fine print.

On November 12, 2009, Ping Liu elected basic life insurance coverage from Life Insurance Company of North America (LINA) through his employers ERISA plan in the amount of his yearly salary. Liu also elected to get supplemental coverage in the amount …

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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, …

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Excess Insurer May Recoup Settlement Payments from the Primary Insurer

In RSUI Indemnity Co. v. American States Insurance Co., No. 14-30033, 2014 U.S. App. LEXIS 18407 (5th Cir. Sept. 25, 2014), the Fifth Circuit Court of Appeals held no adjudicated excess judgment is required for an excess insurer to recoup settlement payments from the primary insurer whose alleged bad faith failure to defend the common insured caused the excess settlement.

In the underlying action arising from an automobile collision, counsel retained by the primary carrier, American States Insurance Co. (ASIC), for the insureds allegedly …

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Court Rejects Policyholder’s Products-Completed Operations Hazard Arguments In Attempt To Obtain Coverage For Environmental Claims

This environmental coverage action arises from soil and groundwater contamination at Visteon’s Indiana plant that migrated to the properties of neighboring landowners. Specifically, Visteon manufactured automotive climate control system parts at the facility continuously until 2007 and operated 13 degreasers, which primarily used Trichloroethylene (TCE) as a degreasing solvent.  Multiple historical releases of TCE from the 1960s to 2000 and beyond resulted in a TCE groundwater plume that emanated from the site and volatile organic compounds, including TCE, were detected in the soil. Visteon was …

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New York Court Reaffirms Limitations on Policy Claims Arising Out of Superstorm Sandy

In Sikarevich Family L.P. v. Nationwide Mutual Insurance Co., No. 13-cv-05564, 2014 U.S. Dist. LEXIS 92254 (E.D.N.Y. July 3, 2014), the United States District Court for the Eastern District of New York addressed a policyholder’s claims for:  (1) breach of the covenant of good faith and fair dealing, (2) unjust enrichment, (3) consequential damages, and (4) punitive damages.  Notably, the policyholder alleged a breach of contract cause of action. The policyholder’s claims arose out of Nationwide’s denial of coverage for the policyholder’s first party …

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Preemptive Power Shutdown From Hurricane Sandy Was Not A Covered Business Interruption Claim

This coverage action arises from the widespread power outages that occurred in and around New York City during and after Hurricane Sandy. On October 29, 2012, in anticipation of storm-related flooding, utility provider Consolidated Edison Co. of New York, Inc.  preemptively shut off power to certain of its service networks to preserve the integrity of the utility system.  As a result, the plaintiff, a law firm, was without power at its lower Manhattan office for several days. The firm filed a claim under its property …

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NYDFS Announces New Extension to Sandy Mediation Program

The New York Department of Financial Services (NYDFS) has extended the emergency regulation (15th Amendment to Regulation 64, 11 NYCRR 216) surrounding mediations relating to Hurricane Sandy.  The current version was filed with the Secretary of State on February 14,2014 and will expire on or about May 15, 2014 under the 90 day rule.

Originally promulgated in the aftermath of Superstorm Sandy, the amendment applies to any claim for loss or damage, other than claims made under flood policies issued under the national flood …

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Insurers Reach the Summit: N.Y. Court of Appeals Reverses K2, Says Exclusions Not Lost in Breach of Duty to Defend

After granting reargument, the New York State Court of Appeals reversed its previous decision finding that the rule of stare decisis must govern and that the court erred by failing to take account of controlling precedent in Servidone Const. Corp. v. Sec. Ins. Co. of Hartford. In that previous decision, K2-I, the court arguably rewrote New York law by adopting a minority position that recognized the doctrine of coverage by estoppel ruling that where an insurer breaches its duty to defend, it has …

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Eleventh Circuit Blows Away $4M Verdict in Hurricane Wilma Case

The Eleventh Circuit recently reduced a $4 million jury verdict to $1,600 after finding that the policyholder, a property management company, lacked an insurable interest in the ownership of the property to justify any higher award.

The plaintiff, Banta Properties (Banta), served as the property management company for three apartment complexes in Broward County, Florida. The three complexes were all separate legal entities that were not owned by Banta. In exchange for managing the complexes, the owners paid Banta 4 percent of gross income.

Banta …

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Florida and Alabama Governors Join Fight Against Flood Insurance Rate Hikes

The Governors of Florida and Alabama filed an Amicus brief in a lawsuit brought by Mississippi against the federal government over flood insurance rate hikes. Mississippi filed suit just before rate hikes took effect in accordance with the Federal Emergency Management Agency’s Biggert-Waters Flood Insurance Reform Act. 

In 2012, President Barack Obama signed the Biggert-Waters Flood Insurance Reform Act into law. This act was adopted to fund the federal government’s flood insurance program which is heavily in debt. It requires yearly rate hikes for those …

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