Insurance Fundamentals

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The Eleventh Circuit recently confirmed the rule that “other insurance” clauses should not be used to disadvantage policyholders. Nat’l Cas. Co. v. Georgia Sch. Bd. Ass’n – Risk Mgmt. Fund, No. 22-13779, 2023 WL 5977299, at *1 (11th Cir. Sept. 14, 2023). In a dispute between an insurance company and a public risk management fund, both insurance policies included “other insurance” clauses stating that each insurer would only provide excess insurance coverage where the policyholder is covered by other insurance. The district court found that the clauses were irreconcilable because both insurance policies could not provide only excess insurance coverage—at least one policy would need to provide primary coverage. Because of the conflict, the Georgia federal district court applied Georgia’s irreconcilable-clauses rule and held that each policy must provide coverage to the policyholder on a pro rata basis. The Eleventh Circuit affirmed the district court’s application of Georgia’s irreconcilable-clauses rule.…

Continue Reading Insurance Fundamentals: “Other Insurance” Clauses

On March 20, 2023, the Southern District of New York denied a policyholder’s claim for coverage and granted the insurer’s motion for judgment on the pleadings in Pine Management, Inc. v. Colony Insurance Company. The parties disputed whether a real estate liability insurance policy provided defense and indemnification for Pine Management, Inc. in an underlying lawsuit brought by numerous companies that Pine managed. A simple question proved pivotal in the outcome: whether Pine had timely sought coverage for its claim.
Continue Reading When Does a Claim Become a “Claim”? A Lesson on Timely Notice

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