Florida’s Statutory Sovereign Immunity Language Inserted Into Any Government Liability Policy Takes Precedence Over the Policy’s Definition of “Occurrence”

In Florida, as in most jurisdictions, government agencies may be subject to liability for tortious acts, with the recovery limit capped by law. A recent decision, State of Florida v. Barnett, explores the recent conflict regarding the limit of recovery against a state agency for an “occurrence” involving multiple claimants. Section 768.28(5), Florida Statutes (2010), states in relevant part as follows: Neither the state nor its agencies or subdivisions shall be liable to pay a claim or a judgment by
Continue reading...

Years Later, Hurricane Sandy Claims Still Present Unique Coverage Questions

The Second Circuit’s recent reversal of summary judgment involving a coverage dispute over a $50M Hurricane Sandy storm surge claim is an important reminder to always closely read the policy. At first blush, the policy in question was a seemingly standard all-risk commercial property policy that featured a flood exclusion and a separate windstorm or hail deductible endorsement. The coverage analysis in this case should have been straightforward – storm surge falls within the scope of the flood exclusion vitiating
Continue reading...

What on Earth? Court Finds Ambiguous Property Appraisal Award for Earthquake Damage

The U.S. District Court for the Southern District of Illinois recently held that outstanding coverage issues and an ambiguous notation in an appraisal award precluded a finding that an insurer satisfied its coverage obligations. Windsor Oaks, LLC v. Cincinnati Ins. Co., No. 17-CV-689-SMY-SCW, 2018 WL 4303141 (S.D. Ill. Sept. 10, 2018). The insured, a hotel owner, submitted to its insurer a property claim for earthquake damage. The insurer retained an engineering expert, who determined the hotel did not sustain earthquake damage.
Continue reading...

Pennsylvania Courts Continue To Bar To Coverage For Defective Workmanship Claims

Insurance coverage disputes regarding faulty workmanship construction defects are common throughout the United States. In Pennsylvania, under the Supreme Court’s 2006 decision in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., property damage claims arising out of poor workmanship are not covered under typical CGL policies. Recently, the court of Appeals for the 3rd Circuit followed Kvaerner, and ruled that a subcontractor’s defective workmanship claim was not covered. In Lenick Constr., Inc. v. Selective Way Ins.
Continue reading...

A Subpoena May Be a Claim if the Insured says It Is

Whether or not there is coverage under a D&O Policy to pay for expenses incurred responding to a governmental subpoena is a recurring question that nets an inconsistent answer from courts around the country. While the question is often fact specific, an Illinois Federal Court held that a D&O policy provided coverage for expenses incurred responding to a subpoena, and in fact, looked outside of the subpoena itself to make that finding. In Astellas US Holding, Inc. v. Starr Indem.
Continue reading...

A Window Opens? Are Defective Product Construction Defect Claims Covered Under Pennsylvania Law?

A recent decision from a Pennsylvania court highlights tension in Pennsylvania law regarding whether a construction defect claim involving consequential damages caused by a defective product involves a covered “occurrence.” Sapa Extrusions, Inc. v. Liberty Mut. Ins. Co., 2018 WL 2045496 (M.D. Pa. May 1, 2018). In this coverage action, the insured, a window frame manufacturer, sought a declaratory judgment that it was owed coverage for an underlying action brought by a customer that used the window frames to manufacture
Continue reading...

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
Continue reading...

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,
Continue reading...

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
Continue reading...

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
Continue reading...