Wasn't it the under-apple-tree-sitting Sir Isaac Newton who first said that what goes down must come up? (Physics wasn't my thing in high school.) In addition to being a mathematician, physicist, astronomer, theologian, author and pome fruit lover, I ...

Here is your weekly Coverage Counsel update for you. Click here to start your FREE subscription

If you are unable to open any of the 'Read the whole entry' links below, please go directly to the Coverage Counsel blog by clicking its banner above. 

Thank you for subscribing.  If you are receiving this email to confirm your subscription, please click the 'Click here to activate your service' link below.  If you know others who may benefit from subscribing to this blog, please forward this email to them and have them click here

Roy Mura


Coverage Counsel - 5 new articles

The Polar Vortex and Reasonable Care to Maintain Heat


Wasn't it the under-apple-tree-sitting Sir Isaac Newton who first said that what goes down must come up? (Physics wasn't my thing in high school.) In addition to being a mathematician, physicist, astronomer, theologian, author and pome fruit lover, I understand that Sir Isaac provided expert cause of loss evaluation services to insurance companies1 in the late 17th and early 18th centuries.

Had I opened my law office in, let's say, Florida, I wouldn't be getting calls like the one I got yesterday. With air temperatures having risen back into the guess-I-no-longer-have-an-excuse-not-to-shovel-my-walkway-and-sidewalk range, water that had gone from liquid to solid state in enclosed hollow metal cylinders (aka pipes) is moving back into its liquid state. And hence, the resulting freezing/water losses. And associated coverage questions.

Homes that are vacant, unoccupied or under construction are generally not covered for freezing losses unless their owners have used reasonable care to either maintain heat or shut off the home's water supply and drain the pipes. A typical homeowners policy provision provides:

SECTION I – PERILS INSURED AGAINST
...

Read the whole entry »

      
 


Not "Dependent Property" -- Denial of Business Income Loss Claim Upheld

COMMERCIAL PROPERTY – BUSINESS INCOME LOSS CLAIM – "DEPENDENT PROPERTY"
Cohen & Slamowitz, LLP v. Zurich Am. Ins. Co.
(2nd Dept., 1/23/2019)

Commercial property policy for the plaintiff, a former debt collections law firm, provided coverage for actual loss of "business income" sustained by the plaintiff "due to the necessary suspension of operations' caused by direct physical loss or damage by a Covered Cause of Loss to dependent property'" at a premises not owned, leased, or operated by the plaintiff. The policy further defined "dependent property" as premises operated by others on whom the plaintiff depended to "[d]eliver materials or services to you, or to others for your account (not including water, communication or power supply services)." (Underlining added.)

Plaintiff claimed loss of business income from a disruption of its telephone service as a result of severe flooding at it telephone service provider's lower Manhattan switch center during Hurricane Sandy. (Ironic that a debt collection firm that primarily used the telephone as its method of communicating with alleged debtors would not recognize that the switch center, which provided communication...

Read the whole entry »

      
 


Cause of Action for Consequential Damages Found Allegationally Sufficient and Reinstated

COMMERCIAL PROPERTY – CONSEQUENTIAL DAMAGES – IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING – BAD FAITH – ALLEGATIONAL SUFFICIENCY
DK Prop., Inc. v. National Union Fire Ins. Co. of Pittsburgh
(1st Dept., 1/17/2019)

Question:
Must, at the pleading stage, a claim for consequential damages arising from the insurer's processing of the insured's insurance claim requires a detailed, factual description or explanation for why such damages, which do not directly flow from the breach, are also recoverable?

Answer of the First Department:
No. A cause of action for consequential damages is sufficiently pled by specifying the types of consequential damages claimed and alleging that such damages were reasonably contemplated by the parties prior to contracting.

The complaint in this case alleged that rather than pay the claim, defendant made unreasonable and increasingly burdensome information demands throughout the three-year period since the property damage occurred. Plaintiff contended that this was a tactic by defendant to make the claim so expensive to pursue that plaintiff would abandon it altogether. Plaintiff contended defendant's investigatory process has...

Read the whole entry »

      
 


Copy Compiled from Underwriting Records Ruled Not Best Evidence of the Policy. Judgment for Insurer Reversed and New Trial Ordered.

COMMERCIAL GENERAL LIABILITY – DESIGNATED ONGOING OPERATIONS EXCLUSION ENDORSEMENT – DUTY TO DEFEND & INDEMNIFY – BEST EVIDENCE RULE
Pennsylvania Lumbermens Mut. Ins. Co. v. B&F Land Dev. Corp.
(2nd Dept., 1/16/2019)

Fatal accident involving a worker on defendant's property formed the basis of the estate's underlying action for personal injuries and wrongful death.

At the time of the accident, defendant B&F had a CGL policy in force with plaintiff, PLM. PLM received notice of the death on April 15, 2009, issued a reservation of rights on May 4, 2009, and denied coverage under the policy on June 22, 2009. PLM's coverage declination was based on: (1) the location of the loss not being a location listed on the policy; (2) the policy's exclusion for bodily injury arising out of B&F's ongoing operations; and (3) late notice.

Two months later, PLM commenced this action against B&F and the executor of the decedent's estate for a judgment declaring that PLM was not obligated to defend or indemnify B&F in the underlying action. B&F defaulted, but the executor answered.

In May 2016, PLM proceeded to a non-jury trial against the...

Read the whole entry »

      
 


When 5 + 3 = 1

COMMERCIAL PACKAGE POLICY – EMPLOYEE DISHONESTY COVERAGE – NUMBER OF OCCURRENCES – ANTI-STACKING PROVISION
Dan Tait, Inc. v. Farm Family Cas. Ins. Co.
(Sup. Ct., Albany Co., 7/2/2018)

Over a five-year period, plaintiff's former bookkeeper stole approximately $500,000 from his employer by: (1) making unauthorized purchases with company credit cards; (2) making unauthorized withdrawals from the company's line of credit; and (3) taking company inventory for personal use. Plaintiff made a claim for employee dishonesty coverage to its commercial package insurer, Farm Family.

Deeming the former bookkeeper's course of dishonest acts committed over multiple policy periods to constitute one "occurrence" under the language of the policy, Farm Family paid $15,000, representing the limit of the employee dishonesty coverage for one policy period. Plaintiff sued.

Under the subject policy, Farm Family agreed to pay for the direct loss of business property or cash "resulting from dishonest acts committed by [the named insured's] employees acting alone or in collusion with other persons[.]" The policy further provided that "[t]he most [Farm...

Read the whole entry »

      
 


More Recent Articles



Safely Unsubscribe ArchivesPreferencesContactSubscribePrivacy