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
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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
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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
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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
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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.
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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
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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
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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
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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
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The Insurance & Reinsurance Report: Year in Review — Why We Think It’s the Best Legal News Blog of 2018

Goldberg Segalla’s Insurance and Reinsurance Report is in the running for The Expert Institute’s Best Legal News Blog of 2018. Fans and readers of the Report and others who stay abreast of developments in the legal blogosphere are invited to vote for the best legal news blog through the following link: The Insurance & Reinsurance Report Honored to be in the running and by the support we’ve seen thus far, we took this opportunity to reflect on some of the
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