Fifth Circuit: False Imprisonment Caused “Bodily Injury” During Subsequent Policy Periods Sufficient to Trigger Coverage

In a notable deviation from decisions across the country, the Fifth Circuit recently ruled that injuries from false imprisonment could be sustained after the actual false imprisonment itself ended, triggering two insurers’ duty to defend. Travelers Indem. Co. v. Mitchell, No. 17-60291, 2019 WL 2276694 (5th Cir. May 29, 2019). The insurers, whose policies did not come into existence until after the false imprisonment ended, were found obligated to defend a Mississippi County in a civil rights lawsuit stemming from
Continue reading...

Can You Depreciate Labor? Tennessee Supreme Court Says No.

When calculating the actual cash value (ACV) amount of property damage, the labor component cannot be depreciated according to the Tennessee Supreme Court in a unanimous decision answering a certified question.  Lammert, et. al v. Auto-Owners (Mutual) Ins. Co., 2019 WL 1592687 (Tenn. April 15, 2019). At issue were two homeowner policies, one policy which contained a definition of ACV and the other which did not, but neither policy explicitly stated whether labor costs were included within the scope of
Continue reading...

ALI’s Restatement of Liability Insurance Advocates a “Split-the-Baby” Approach to Allocation of Long-Tail Claims

“All sums” or “pro rata” – which one is the majority view for allocation of long-trail claims? Well, after eight years of iterative revision, the proposed final draft no. 2 of ALI’s Restatement of the Law, Liability Insurance was approved in May 2018. The restatement has received very critical feedback from both sides, chiefly that the ALI has abandoned its mission to “restate” common law in favor of advocating what the law should be. One of the more hotly contested sections
Continue reading...

South Carolina High Court Allows Malpractice Claim by Insurer Against its Assigned Defense Counsel

Early March, in a narrow, carefully worded opinion, a divided Supreme Court of South Carolina ruled that a liability insurer may sue an attorney it retained to defend its insured where the attorney’s breach of its duty to the insured proximately causes the insurer damage. The decision adds South Carolina to the growing list of states that recognize a malpractice cause of action by an insurer against its assigned defense counsel. See Sentry Insurance Co. v. Maybank Law Firm, LLC, — S.E.2d
Continue reading...

Injured Employee Triggers Additional Insured Coverage

While awaiting the Appellate Division’s decision in M & M Realty of New York LLC v. Burlington Ins. Co., No. 153949/16, 2019 WL 1028971 (1st Dept. Mar. 5, 2019), we discussed the New York Supreme Court decision in a post in January. Last week the first department finally weighed in. Recall that the coverage dispute arises out of an underlying bodily injury case to an employee of L&M, which was hired by owner M&M to work on a project. M&M sought
Continue reading...

Fourth Circuit Holds that Insured Must Strictly Comply with Notice Conditions

The U.S. Court of Appeals for the Fourth Circuit, applying South Carolina law, recently held that an insurer had no duty to indemnify its insured for a default judgment on late notice grounds because the court found that the insured’s forwarding to the insurer’s agent of a notice of representation letter by the claimant did not constitute notice to the insurer of a lawsuit later filed by the claimant. Founders Ins. Co. v. Richard Ruth’s Bar & Grill LLC, No.
Continue reading...

Courts Continue to Raise the Bar for ROR Letters

Recently, it seems like courts are finding reservation of rights (ROR) letters to be ineffective, more often than not. Such was the case when the District Court for the Northern District of Georgia, applying Georgia law, held that an insurer that defends its insureds before reserving rights is estopped from later denying coverage. While this may seem obvious, the facts giving rise to the court’s decision are so common that this case should give us pause.  Recently, it seems like
Continue reading...

10th Circuit Holds that the Phrase “That Particular Part” in a CGL Policy’s “Damage To Property” Exclusion is Ambiguous

Noting the inconsistent treatment given to the “Damage To Property” exclusions commonly found in standard commercial general liability coverage forms, the United States Court of Appeals, Tenth Circuit, applying Oklahoma law, has held that the phrase “that particular part” in the exclusion is ambiguous. In MTI, Inc. v. Employers Insurance Company of Wausau, No. 17-6206, — F.3d —, 2019 WL 321423 (10 Cir. 2019), an insured contractor, MTI, Inc. (MTI) was retained by Western Farmers Electrical Cooperative (WFEC) to remove
Continue reading...

FEMA Rescinds Prior Ruling that Halted National Flood Insurance Program during Government Shutdown after Wave of Backlash from Insurance Industry

In the midst of the partial federal government shutdown, on Wednesday, December 26th, the Federal Emergency Management Agency (FEMA) announced that the National Flood Insurance Program (NFIP), the main source for flood insurance in the U.S., would have limited ability to issue new or renewal policies, or issue increased coverage on existing policies, although claims would be paid on policies that were in force before midnight on December 21, 2018.  A wave of backlash from the insurance, banking, and housing
Continue reading...

The Insurance and Reinsurance Report Named Best Niche and Specialty Blog of 2018!

We are pleased to announce that the Insurance and Reinsurance Report blog has been named the best legal news blog in the country and earned 5th place overall in The Expert Institute’s Best Legal Blog Contest for 2018! The Expert Institute — a leading legal service provider for identifying, verifying, and retaining expert witnesses — holds this annual contest to vet and recognize the best legal blogs out of the thousands that are on the web. In the 2018 Best Legal Blogs
Continue reading...