Reaching into the weeds to analyze a business interruption claim, the Massachusetts Court of Appeals determined the cost of ordinary payroll could be included in the calculation of net profit or loss in determining business loss income when business is resumed quickly after a fire. Verrill Farms, LLC v. Farm Family Cas. Ins. Co.
Coverage for Additional Insured Not Limited to Vicarious Liability of Named Insured
By Tred R. Eyerly on
The insurer unsuccessfully moved for reconsideration of the court's holding that additional insured coverage was not limited to vicarious liability of the named insured. First Mercury Ins. Co. v. Shawmut Wood-Working & Supply, Inc., 2014 U.S. Dist. LEXIS 155095 (D. Conn. Oct. 31, 2014)
The additional insured endorsement provided coverage for liability for…
On Rehearing, Fifth Circuit Finds Contractual-Liability Exclusion Does Not Apply
By Tred R. Eyerly on
On rehearing, the Fifth Circuit determined that the contractual-liability exclusion did not apply to bar coverage for damage caused by the insured contractor to the home it constructed. Crownover v. Mid-Continent Cas. Co., 2014 U.S. App. LEXIS 20727 (5th Cir. Oct. 29, 2014).The court withdrew its prior opinion, summarized here.
Arrow…
Pollution Created by Business Does Not Deprive Insured of Coverage
By Tred R. Eyerly on
The federal district court determined that coverage was properly denied under the pollution exclusion of the policies. Headwaters Resources, Inc. v. Illinois Union Ins. Co., 2014 U.S. App. LEXIS 20060 (10th Cir. Oct. 20, 2014).
Over 400 residents of Chesapeake, Virginia, filed two lawsuits against the insured, Headwaters, alleged property damage…
Denial of Coverage for Bulge in Wall Upheld
By Tred R. Eyerly on
The insurer properly denied coverage for a bulge in a warehouse wall that the insured claimed was caused by Hurricane Ike. Russell v. Scottsdale Ins. Co., 2014 U.S. Dist. LEXIS 143882 (S.D. Tex. Sept. 30, 2014).
Hurricane Ike displaced metal roof coverings on the insured's warehouse, causing interior water damage to several…
Flood Coverage Denied Based on Failure to Submit Proof of Loss
By Tred R. Eyerly on
The court granted summary judgment to the insurer because the insureds submitted only documentation of damage by flood, not proof of loss forms required by the policy. Alexander v. Allstate Ins. Co., 2014 U.S. Dist. LEXIS 143284 (E.D. La. Oct. 8, 2014).
Hurricane Isaac caused flood damaged to the insureds' home. A…
Wildfire Is Efficient Proximate Cause of Moisture Reaching Expansive Soils Under Residence
By Tred R. Eyerly on
The court considered whether a wildfire (covered risk) or moisture in the soils (excluded risk) was the cause of damage to the insureds' home. Encompass Ins. Co. v. Berger, 2014 U.S. Dist. LEXIS 142870 (C.D. Cal. Oct. 7, 2014).
In May 2009, the Jesusita Fire caused damage to the insureds' home and…
No Indemnity Coverage Where Insured Suffers No Loss
By Tred R. Eyerly on
The insured subcontractor sought coverage under its Builder's Risk policy for loss despite already being paid under contract the amount sought under the policy. MKB Constr. v. Am Zurich Ins. Co., 2014 U.S. Dist. LEXIS 136096 (W.D. Wash. Sept. 24, 2014).
MKB contracted with the Lower Yukon School District (LYSD) to place…
Motion to Dismiss Denied Regarding Insureds’ Claim For Collapse
By Tred R. Eyerly on
The federal district court denied the insurer's motion to dismiss claims for loss due to the imminent collapse of the insureds' basement walls. Belz v. Peerless Ins. Co., 2014 WL 4364914 (D. Conn. Sept. 2, 2014).
The insureds noticed cracks throughout their basement walls. It was discovered that the condition was the…
Court Agrees to Stay Coverage Matter While Underlying State Action is Pending
By Tred R. Eyerly on
The federal district court granted the insured's motion to stay the coverage action while the construction defect case was pending in state court. Auto Owners Ins. Co. v. Essex Homes Southeast, Inc., 2014 U.S. Dist. LEXIS 133120 (D. S.C., Sept. 23, 2014).
The homeowners sued Essex Homes in state court…