If the insurer notifies the insured it intends to settle a claim, but will then seek reimbursement if the claim is not covered, can the insured avoid having to reimburse the insurer? The California Court of Appeal answered no in Am. Modern Home Ins. Co. v. Fahmian, 2011 Cal. App. LEXIS 420 (Cal.
Comprehensive General Liability
Insured’s Claim Against Agent Survives Statutue of Limitations Challenge
By Tred R. Eyerly on
After being sued for failure to secure a policy, the insurance agents sought dismissal of the insured's suit on statute of limitations ground. Kelly v. Lodwick, 2011 Fla. App. LEXIS 4810 (Fla. Ct. App. April 6, 2011).
A private school was notified its policy would not be renewed after it lapsed on…
Construction Defects Not Covered When Contractor Terminated Prior to Completion
By Tred R. Eyerly on
Whether a contractor who failed to complete construction of a home had coverage for alleged construction defects was at issue in Clarendon Am. Ins. Co. v. Gen. Sec. Indem. Co. of Arizona, 2011 Cal. App. LEXIS 377 (Cal. Ct. App. March 2, 2011).
Hilmor Development contracted with the homeowners to serve as general contractor…
Lack of Coverage for Named Insured Does Not Negate Coverage for Additional Insured
By Tred R. Eyerly on
Although the commercial auto policy excluded coverage for the named insured, coverage was still possible for the additional insured. Great West Casualty Co. v. Terminal Trucking Col., LLC, 2011 U.S. Dist. LEXIS 30356 (D. S.C. March 22, 2011).
Wellman, Inc. sold bales of polyester fiber to Milliken & Company. Wellman contracted with…
Policy During Which Property Damage Occurs Is Triggered
By Tred R. Eyerly on
Addressing which of the two insurers' policies were responsible for the loss, the Indiana Court of Appeals found both policies were triggered because property damage occurred within each insurer's policy period. Grange Mut. Cas. Co. v. West Bend Mut. Ins. Co., 2011 Ind. App. LEXIS 442 (Ind. Ct. App. March 15, 2011).
Cincinnati…
Georgia Court Finds Faulty Workmanship Can Arise From an Occurrence
By Tred R. Eyerly on
Georgia has joined the growing legion of high state courts to find that faulty workmanship can arise from an occurrence, invoking coverage for a contractor. See Am. Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co., Inc., 2011 Ga. LEXIS 177 (Ga. March 7, 2011).
Hathaway Development Co., a general contractor, sued…
No Coverage Where Contract’s Indemnity Provision Never Triggered
By Tred R. Eyerly on
Whether the insurer was obligated to indemnify its insured for potential liability under a contractual indemnity provision was at issue in Farmers Ins. Exchange v. RNK, Inc., 2011 U.S. App. LEXIS 1255 (1st Cir. Jan. 21, 2011).
RNK, a telephone company, and Ripple, a company providing conference services including chat lines, entered…
Similar to Hawaii, South Carolina Seeks to Legislate Coverage for Construction Defects
By Tred R. Eyerly on
This post from today's BusinessInsurance.com addresses legislation introduced in South Carolina seeking to extend coverage for construction defects under CGL policies. We posted on a similar effort underway in Hawaii to expand coverage for construction defects under SB1194.
Similar to Hawaii's effort through SB1194 to correct the Intermediate Court of Appeal's decision in…
Seventh Circuit Remands Construction Defect Case In Light of Sheehan
By Tred R. Eyerly on
In a prior post, we noted the Indiana Supreme Court held that the CGL policy covers damage to a home structure resulting from shoddy subcontractor work unless the subcontractor work was intentionally faulty. See Sheehan Constr. Co. v. Cont'l Cas. Co., 935 N.E. 2d 160 (Ind. 2010). In a subsequent construction defect…
Indiana Court Adopts Uniform, Not Site-Specific, Interpretation of Pollution Exclusion
By Tred R. Eyerly on
Where the insured faces environmental suits in several states, should the law governing the liability policy be "site-specific," meaning the law of each state in which allegations of injury or property damage arise governs the policy's interpretation, or "uniform," whereby a single state's law governs? In Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Standard Fusee Corp…