A Michigan federal court in Wolverine World Wide Inc. v. The American Insurance Co. et al., No. 1:19-cv-00010 (W.D. Mich.), recently confirmed what should go without saying – a claim handler is a claim handler, even if they may also be a lawyer. Recognizing that it’s the nature of the work that drives the analysis, the court ordered an in-house Travelers’ attorney to sit for a deposition in a PFAS coverage suit because the attorney was performing ordinary claim-handling activity. In rejecting the insurer’s arguments, the court reiterated that “an insurer cannot create a ‘shroud of secrecy’ by simply designating an attorney to conduct an otherwise ordinary claim investigation.”Continue Reading “The Lines Are Not Blurred”: Attorney Claim Handlers Are Not Protected by Attorney-Client Privilege
Commercial general liability insurance policies are often written on an “occurrence” basis. An “occurrence” is typically defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Coverage, therefore, requires generally that the “bodily injury” or “property damage” (or “advertising injury” or “personal injury”) happen fortuitously during the effective policy period. Central to this inquiry is knowing when the injury or damage took place. Continue Reading Policyholders Score Win as Another State’s High Court Adopts the “Continuous-Trigger” Theory for General Liability Policies
Most modern liability insurance policies have provisions addressing whether different claims are “related” (or “interrelated”) for assessing potential coverage. Because the answer of whether two claims are “related” depends heavily on the facts giving rise to the underlying claims, the policy language, and applicable law, questions about relatedness can lead to significant insurance coverage disputes.Continue Reading Tenth Circuit: Remain Thoughtful About Whether Your Insurance Claims Are Related
A New York federal judge recently ruled that an insurer waived its late notice defense because a generic reservation of rights was insufficient to preserve it. As a result, the policyholder’s claim was preserved despite being submitted more than three months after the loss—a delay which would ordinarily be fatal under New York law. The decision underscores the importance both of timely submission of claims and careful attention to reservation of rights letters.
Continue Reading It’s Too Late, Lloyd’s: New York Federal Court Finds Insurer Waived Late Notice Defense
The Fourth Circuit recently affirmed insurance coverage for a South Carolina policyholder based on the “axiomatic principle” that an insurer which fails to fully and fairly articulate its potential coverage defenses in a reservation of rights letter loses the right to contest coverage on those grounds. Stoneledge at Lake Keowee Owner’s Assoc. v. Cincinnati Ins. Co., No. 19-2009, 2022 WL 17592121 (4th Cir. 2022) (quoting Harleysville Group Insurance v. Heritage Communities, Inc., 803 S.E.2d 288 (S.C. 2017)). More particularly, in Stoneledge, the Fourth Circuit affirmed per curiam a South Carolina District Court’s grant of summary judgment in favor of a homeowners association that had successfully sued its general contractors for construction defects and was seeking to recover the damages owed from the contractors’ insurers. The Fourth Circuit agreed that the insurers’ vague reservation of rights letters failed to reserve the defenses on which the insurers purported to deny coverage. …
Continue Reading Without Reservations: Fourth Circuit Affirms That Vague Reservation of Rights Waived Insurers’ Coverage Arguments
A review of insurance policies at renewal should be on every business’s annual task list—and it should be checked twice! Just as your business grows and evolves every year, so should your insurance program. Together with staying proactive and preparing for renewal months before the policy expiration, there are a number of best practices to put your business in the best position to maximize insurance recovery, including shopping around, evaluating changes to your business, engaging the appropriate stakeholders, and performing a policy audit with a coverage attorney.Continue Reading Policy Renewals: Has Your Insurer Been Naughty or Nice?
If your company has an emergency response plan—and it likely does—filing an insurance claim needs to be included in that plan. But what if your insurer stretches out the consideration process by making continuous, costly information requests without making a coverage determination? Or decides to deny coverage under one clause of the policy, but accept coverage under another? Or outright denies coverage? Policyholders should be prepared to comply with policy obligations (which may vary depending on the controlling state law), such as the sharing of relevant information and documentation or participating in arbitration or a mediation prior to suing the insurer, but also understand the responsibilities insurers have to policyholders when a claim is tendered. …
Continue Reading It’s Not You, It’s Them: Dealing With Insurance Coverage Denials
Like other policyholders, hard insurance market trends, aggravated by cybersecurity risks, climate change, and COVID-19, have hit higher education policyholders, yielding reduced or limited coverages for increased premiums. These conditions – reduced coverages and higher premiums – are symptoms of a “hard” insurance market. (A hard market is caused by a mismatch between policyholders’ waxing demand for coverage and insurers’ waning risk appetite.) But higher education policyholders face unique risks that exacerbate existing market conditions, including:Continue Reading Back to School Blues: Risk Exposures Affecting Higher Education