North Carolina Supreme Court Holds the Term ‘ACV’ Unambiguously Includes Depreciation of Labor Costs

Key Takeaways:

  • The term ACV is not susceptible to more than one reasonable interpretation and unambiguously includes depreciation of both material and labor costs
  • Split decisions in other jurisdictions on whether ACV includes depreciation of both labor and materials does not result in the term being ambiguous under North Carolina law

The Supreme Court of North Carolina held that the term Actual Cash Value (ACV) in a homeowners policy is unambiguous and is calculated by depreciating both labor and material costs. The decision in Thomas

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Application Sinks Insured’s Claims Against Agent Over Hole-In-One Coverage

Key Takeaways:

  • Extends the “duty to read” principle typically applied to insurance policies to applications submitted by insureds for such policies
  • Reasonable expectations doctrine only applies when the terms of the policy itself are ambiguous

After losing an extended coverage battle with its insurer that ultimately resulted in a finding of no coverage by the Fourth Circuit, the insured in Old White Charities, Inc. v. Bankers Ins., LLC, No. 18-1914, 2020 WL 290664 (4th Cir. Jan. 21, 2020) took aim at its insurance agent, asserting claims of …

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Washington High Court Finds that Certificates of Insurance Can Create Coverage

Answering a certified question from the Ninth Circuit, the Washington Supreme Court issued a surprising decision, holding that certificates of insurance can create coverage despite express disclaimers that they do not “amend, extend or alter the coverage afforded by” the policy.[1] This decision is inconsistent with precedent from courts across the country that routinely hold certificates of insurance are informational documents only that cannot supplant the terms of an insurance policy.

In this Washington case, T-Mobile USA, made a demand for additional insured coverage in connection …

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Eleventh Circuit Holds that Referencing Sealed Documents is Not Proper Notice

The Eleventh Circuit upheld a win for the insurer under a claims-made-and-reported policy in Crowley Mar. Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, No. 18-10953, 2019 WL 3294003 (11th Cir. July 23, 2019), finding that the insured did not provide timely notice. In so holding, the court rejected the insured’s argument that it provided timely notice by sending a letter to the insurer referencing an affidavit which the insured claimed alleged wrongful conduct against the insured, but was sealed, preventing the insurer from confirming the insured’s claim for coverage.

At issue …

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Florida Appellate Court Narrows Exception to Four Corners Rule

The general rule for determining whether a duty to defend exists for a particular claim is easily stated. If the allegations against the insured fall within the scope of coverage afforded by a liability policy, then the insurer has a duty to defend its insured. This general rule is commonly referred to as the four corners rule.

However, insurers frequently face a dilemma in determining whether they have a duty to defend where the allegations in a tendered suit arguably fall within the scope of coverage under …

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Courts Continue to Limit Coverage for Data Breach Claims under CGL Policies

This past week, a Florida federal court dealt another blow to policyholders seeking coverage for data breach claims under traditional commercial general liability (CGL) policies, finding that coverage was not afforded under a CGL policy for a claim involving a data breach incident that exposed credit card information and resulted in more than $1.4 million in damages. St. Paul Fire & Marine Ins. Co. v. Rosen Millennium, Inc., No. 617CV540ORL41GJK, 2018 WL 4732718 (M.D. Fla. Sept. 28, 2018). Given the increasing frequency and magnitude …

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The ALI’s Recently Adopted “Restatement of the Law of Liability Insurance” Receives Mixed Reviews from Courts and Legislatures

The much-anticipated Restatement of the Law of Liability Insurance (RLLI) was recently approved by the American Law Institute (ALI) during its Annual Meeting in May 2018. Since its adoption, the RLLI has been met with mixed reviews from courts as well as at least one state legislatures.

As discussed in previous blogposts, the RLLI is the ALI’s first publication in the field of insurance law and touches upon nearly every legal issue frequently faced by insurance professionals. Prior to its adoption, the RLLI had been …

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The ALI Votes to Approve the “Restatement of the Law of Liability Insurance”

After nearly a decade of debate and controversy, the American Law Institute (ALI) voted to approve the much anticipated Restatement of the Law of Liability Insurance (RLLI) at its annual meeting on Tuesday, May 22, 2018.  The project that ultimately resulted in the RLLI was launched in 2010, under the direction of Reporter Tom Baker of the University of Pennsylvania School of Law and Associate Reporter Kyle D. Logue of Michigan Law School, and produced nearly 30 drafts through the lifecycle of the project, before …

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The ALI Set to Vote to Adopt the “Restatement of the Law of Liability Insurance”

The American Law Institute (ALI) is set to vote to approve its much anticipated “Restatement of the Law of Liability Insurance” Law at its annual meeting from May 21 to 23, 2018, in Washington, D.C. For almost 100 years, the ALI has published “Restatement of the Law” treatises on various legal topics which are meant to inform legal practitioners on general principles of common law, and courts will often look to these Restatements for guidance. In fact, according to ALI statistics, state and federal courts …

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