Monthly Archives April 2016

Colorado Supreme Court Holds That Violation of “No Voluntary Payments” Clause Precludes Coverage Regardless of Prejudice to Insurer

The Colorado Supreme Court held that a liability insurer has no obligation to indemnify a policyholder for a settlement made without the insurer’s consent and in violation of the policy’s “no voluntary payments” clause. In so doing, the Court rejected the argument that this clause is only enforceable if its violation resulted in prejudice to the insurer. In Travelers Prop. & Cas. Ins. Co. of Am. v. Stresscon, an insured subcontractor sought indemnification from its insurer for a claim made by a general contractor regarding a construction accident allegedly caused by a subcontractor of the insured. The subcontractor settled with
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New York Trial Court Applies Flood Exclusion to Superstorm Sandy Business Interruption/Food Spoilage Claim

In Northern Spy Food Co., LLC v. Tower Nat’l Ins. Co., an insured restaurant challenged its insured’s denial of a business interruption/food spoilage claim with regard to a power outage occurring during Superstorm Sandy. In denying the claims, the insurer contended that the policy’s flood exclusion applied, as the power outage was caused by extensive flooding at a power station. In analyzing coverage, the Supreme Court of New York County noted that the business interruption policy language provided coverage for a suspension in operations resulting from a “direct physical loss” that is “caused by or result[ed] from a Covered Cause
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