Viking Pump’s Legacy: Virginia Court Holds “All Sums” Approach Applies to Excess “Quota Share” Layer Where Underlying Coverage was Exhausted

A federal judge in Virginia held the New York Court of Appeals decision in In re Viking Pump, Inc., 27 N.Y.3d 244 (N.Y. 2016) allowed for an insurer to apply an “all sums” allocation and seek the full limits of excess insurance policies — that formed part of a multi-year “quota share” layer — in a single year, without first establishing that the claims constituted a single loss or occurrence that is covered in whole or in part under another
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Insurer Obligated to Provide Coverage for DWI Accident Resulting from Fundraising Event

In Philadelphia Indemnity Insurance Company v. Central Terminal Restoration Corp., 2018 WL 992312 (2d Cir. 2018), the Second Circuit found coverage existed for a car accident which resulted from the overserving of alcohol to a patron at an event because it held that the ensuing consequences were unintentional. On April 1, 2013, Central Terminal Restoration Corp. (CTRC) held a fundraising event in association with Dyngus Day, a traditional post-Easter festival that attracts tens of thousands of Polish Americans to Buffalo,
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A Divided Court Finds Additional Insured Coverage is Enforceable Across New York

On March 27, 2018, the New York Court of Appeals, in a matter of first impression for the state’s highest court, held that a direct contract was required to confer automatic additional insured status under common policy language. Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire & Marine Ins. Co., 143 A.D.3d 146 (1st Dep’t 2016), aff’d, __N.Y.3d__, 2018 WL 1473553 (Mar. 27, 2018). Many standard blanket additional endorsements often confer additional insured status on entities “with whom” the
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Insurer Accused of Having Ace Up its Sleeve: Insurer Estopped from Relying on Sublimit Due to Defense Counsel’s Failure to Supplement Discovery Responses in Tort Lawsuit

In Harwell v. Fireman’s Fund Insurance Co. of Ohio, 2016 IL App (1st) 152036, the Illinois Appellate Court refused to allow Fireman’s Fund Insurance Company to assert a policy sublimit because defense counsel retained by Fireman’s Fund to represent its insured in the underlying tort lawsuit failed to inform the tort claimant that the sublimit, and not the full limit, applied. As background, Brian Harwell was injured while working at a construction project supervised by Kipling Development Corporation as a
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Must an Additional Insured Have a Written Contract With the Named Insured to Get Coverage? It Depends Which Court You Ask

There is a growing list of trial court decisions in New York where the courts disagree of whether an additional insured endorsement to an insurance policy requires a written contract between the additional insured and the policy’s named insured for additional insured status to apply. The U.S. District Court for the Southern District of New York recently held in Liberty Mutual Fire Insurance Company v. Zurich American Insurance Company that contractual privity with the named insured was not required. In
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No Prejudice Needed When an Insured Settles Without the Insurer’s Consent

In Travelers Prop. Cas. Co. of Am. v. Stresscon Corp., 2016 Colo. LEXIS 419 (Colo. April 25, 2016), Colorado was faced with a choice: enforce the plain and unambiguous terms of an insurance policy or extend the requirement that an insurer prove it was prejudiced by its insured’s breach of the policy’s conditions before denying coverage. The Colorado Supreme Court choose the former and held that an insurer seeking to deny coverage for a breach of the no-voluntary-payments provision does
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Not Better Late Than Never: Illinois Appellate Court Finds in Favor of Insurer on Late Notice Defense

The Illinois Appellate Court, in AMCO Insurance Co. v. Erie Insurance Co., ruled in favor of a CGL insurer based on an additional insured’s violation of the policy’s notice condition. This case represents a significant victory for insurers, which are constantly searching for the enforcement of conditions precedent to coverage. The Appellate Court held in favor of Erie Insurance Co. based on a late notice defense. As background, on March 15, 2007, Smith filed a negligence action against Hartz Construction
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You’re Barred. Again: Negligent Acts, Conditional Language, and the Assault/Battery Exclusion

A fatal shooting took place at a bar. The bar purchased an insurance policy, which contained an assault and battery exclusion, barring coverage for bodily injury or property damage arising out of “any actual, threatened or alleged assault or battery” and the “failure to any insured or anyone else for whom any insured is or could be held legally liable to prevent or suppress any assault or battery.” The bar and additional insured premises owner were sued for negligent security
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No Smoking! Pollution Exclusion Bars Coverage For Claims Arising Out of “Smoky” Beverage

While Florida courts have typically refused to limit pollution exclusions within insurance policies to traditional environmental claims, a District Court in Florida has extended the application of such exclusions even further by finding that a pollution exclusion applies to claims against a bar for injuries allegedly caused by an “exotic” cocktail served by the bar. In Evanston Insurance Company v. Haven South Beach, LLC, et al., Case No. 15-20573 (S.D. Fla. Dec. 28, 2015), the insured, a bar, served an
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Failure to Answer Question on Application for Insurance Truthfully Held to be Grounds for Rescission

Policyholders have an affirmative duty to read the questions asked on an insurance application carefully and will be bound by the answers provided. So stated the United States District Court of the District of Connecticut when it held that a policyholder’s answer of “no” to a question asking whether any of its officers was the subject of a governmental investigation was knowingly false and material to the insurer’s decisions to issue the liability insurance policy. Zurich Am. Ins. Co. v.
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