First Circuit: Statute Of Limitations Does Not Apply Separately For Each LTD Benefit Payment

In a recent ERISA disability benefits case, the First Circuit answered the following questions involving a claim for the underpayment of monthly benefits: 1) when does the underpayment claim accrue?; and 2) does each new monthly underpayment give rise to a new claim?

In this case, the LTD claim was approved, but the insurer denied the claimant’s assertion that the benefits amount was inaccurate. Ordinarily, a cause of action for ERISA benefits accrues when a fiduciary denies a participant benefits. In this case, benefits were …

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FEMA Sends Warning about Time to Sue Over Coverage Disputes

On October 1, 2013, FEMA announced that it was extending the proof of loss deadline by six months for flood insurance policy claims due to Superstorm Sandy. Normally, policyholders have sixty days from the date of loss in which to provide proof of loss. However, given the extensive damage caused by Sandy, FEMA extended the deadline. On November 9, 2012, FEMA extended the deadline for 1 year. FEMA extended it again October 1, 2013 creating a new deadline of April 28, 2014.

Given these extensions, …

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IRS Deals Another Blow to Businesses, Says Wellness Programs Won’t Qualify under ACA

The IRS released proposed new rules which will curb most employer initiated wellness programs from qualifying towards the minimum value for the coverage employers are expected to offer every full-time employee. The wellness programs were said to be discriminatory, due to incentives that not all employees could qualify for which would mean charging more for those who did not qualify under the wellness program for added benefits. Labor unions and employee advocacy groups resisted the wellness programs on this account, urging for the all pay …

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No Coverage for Sandusky under Not-For-Profit D&O Policy

Federal Ins. Co. v. Sandusky, United States District Court for the Middle District of Pennsylvania, March 1, 2013

Federal Insurance Company brought an action seeking a declaration that it had no obligation to provide coverage to Gerald Sandusky for civil and criminal claims brought against him for the sexual abuse and molestation of children. The court granted Federal summary judgment, finding that Sandusky did not commit those crimes in his insured capacity.

Federal insured The Second Mile, which was a nonprofit organization for at-risk youths, …

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Second Circuit Finds Coverage For Environmental Claims Based on Continuing Damage Provision in Excess Policies

Olin Corporation v. American Home Assurance Co.
(2nd Cir, December 19, 2012)

This environmental coverage dispute arises out of ground water contamination claims involving Olin’s Morgan Hill, California site, which had used the chemical potassium perchlorate in the manufacturing of signal flares beginning in 1956.  Olin appealed from the district court granting summary judgment to the insurers on the ground that the attachment point for the excess insurance policies could not be reached by the alleged environmental damage at the site.  Specifically at issue …

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Announcing the Formation of the American College of Coverage and Extracontractual Counsel

The American College of Coverage and Extracontractual Counsel has been formed by leading lawyers in the United States and Canada to improve the quality of the practice of insurance law.

The College focuses on the creative, ethical, and efficient adjudication of disputes between policyholders and insurers over insurance coverage as well as extracontractual damages, which are a form of punitive damages awarded against an insurer in claims alleging bad faith or unfair claims-handling practices. Its members represent the interests of both insurers and policyholders.

The …

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Sixth Circuit Upholds Kentucky’s Exacting Bad Faith Standards

Nat’l Sur. Corp. v. Hartford Cas. Ins. Co.
U.S. Ct. Apps., 6th Cir., October 9, 2012

An excess insurer sought reversal of the district court’s grant of summary judgment in favor of the underlying insurer on its bad faith claims. The underlying action involved a weed trimmer head made by the insured that allegedly shattered during use and severely lacerated the leg of the underlying plaintiff. The insurer refused to settle the claim for its policy limit, $1 million. When negotiations fell through, the insurer

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Fifth Circuit Finds Prejudice, Upholds Excess Insurer’s Rights to Notice


Berkley Reg. Ins. Co. v. Phil. Indem. Ins. Co.
U.S. Ct. Apps. 5th Cir. (Tex.) Aug. 2, 2012

The underlying lawsuit involved a slip and fall with $1 million of primary coverage and excess/umbrella coverage of $20 million. The case went to trial and the jury awarded $1,654,663.50. Thereafter, the primary insurer demanded the excess insurer to pay the amount of the judgment in excess of the primary coverage amount. The excess insurer refused and contested coverage based on policy defenses including late notice, claimant …

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Insurer to Pay for Museum’s Oil Cleanup

Peabody Essex Museum, Inc. v. U.S. Fire Insurance Company
(D. Mass. July 18, 2012)

On July 18, 2012 the U.S. District Court for the District of Massachusetts affirmed a lower court finding that U.S. Fire Insurance Company should have to pay 43% of the $1.5 million clean up costs for an oil spill on the property of the Peabody Essex Museum.  U.S. Fire had filed a motion to reconsider following the determination of U.S. District Court Judge Nathaniel M. Gertner last August.  Calling the matter …

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Connecticut Federal Court: No A.I. Coverage Simply Because Named Insured Employed Injured Plaintiffs

Northeast Utilities Serv. Co. v. St. Paul Fire & Marine Ins. Co.
(D. Conn. July 12, 2012)
A Connecticut federal judge recently ruled that a liability insurer was not obligated to provide additional insured coverage to a utility company absent allegations or evidence that the named insured subcontractor’s acts or omissions led to a fatal electrical explosion killing one of its employees.

Northeast Utilities (NU) entered into a Master Services Agreement with American Electrical Testing Co. (AET), under which AET agreed to furnish supervision, labor, …

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