Archives for General Insurance Liability

New York Insurer Can’t Avoid Defending Insured After Late Denial of BI Claim

The United States District Court of the Southern District of New York ruled that an insurer ran afoul of the timeliness requirements of New York Insurance Law § 3420(d)(2) when it disclaimed coverage 10 months after receiving notice of the claim. In Montpelier U.S. Insurance Co. v. 240 Mt. Hope Realty Co., the court held that the insurer’s late disclaimer failed to meet the law’s requirement that written notice of a denial for a bodily injury claim must be given as soon as is reasonably possible to the insured and the injured person. In addition, since the insurer had initially
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New Jersey Court Holds Language of Lease Controls in Landlord and Tenant’s Dispute Over Sidewalk Liability

In an unpublished opinion, the Appellate Division of the New Jersey Superior Court found in favor a commercial tenant and against the landlord in an action that focused on the interpretation of the lease between the two parties to determine which party was responsible for maintenance and insurance of the common area sidewalk. In Senatore v. Kmart Inc., plaintiff brought suit against Kmart after falling on an allegedly defective portion of the sidewalk. Kmart, the tenant, tendered its defense to Belmont, the landlord, as an additional insured under Belmont’s policy. When Belmont’s insurer rejected the tender because Belmont had neglected
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New Jersey Appellate Court Finds Lack of Specificity in Causation of Negligence Claim Does Not Bar Suit

A New Jersey Appellate Court ruled that a plaintiff’s lack of specificity as to what caused her bicycle accident did not support the trial court’s finding that the plaintiff presented no evidence of causation to support her negligence claim. In Walter v. California Avenue Ventures LLC, the Appellate Court reversed the trial court’s summary judgment in favor of the defendants and found that the record established a triable issue of fact on whether the condition of the sidewalk caused plaintiff’s fall and subsequent injuries. In Walter, plaintiff was injured while riding her bike when she hit an object on the
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NJ Supreme Court Clarifies Amount Owed to Innocent Third Party for Bodily Injury Payment Under Voided “Basic” Auto Policy

The NJ Supreme Court recently examined the amount an insurer issuing a “basic” insurance policy, which was subsequently voided for material misrepresentation in the application for insurance, must pay for a bodily injury claim of an innocent third party. In Citizens United Reciprocal Exchange v. Perez, the Court determined that under New Jersey’s compulsory system of auto insurance, the auto insurer is liable to the innocent third party only for the statutory minimum bodily injury payment in circumstances where the insured elects to add the “basic” policy’s $10,000.00 coverage for third-party bodily injury. Notably, the Court also held that the
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NJ Supreme Court Declines to Extend Residential Public-Sidewalk Immunity to Homewoners Association (HOA) Privately Owned Sidewalks

Under New Jersey law, commercial property owners have a duty to maintain the sidewalks abutting their properties and can be held liable for injuries occurring on those sidewalks. Residential landowners, on the other hand, do not have the same responsibilities and are immune from claims for personal injuries on residential sidewalks. In the 2011 case of Luchejko v. City of Hoboken, the New Jersey Supreme Court extended residential sidewalk immunity to Homeowners Associations (“HOAs”) for injuries occurring on public sidewalks adjoining residential condominium communities. Recently, the Court addressed the issue of whether this immunity also applies to claims for personal
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Pennsylvania Supreme Court Adopts New Fair and Reasonable Standard When Insured Settles Without Insurer’s Consent

In an issue of first impression, the Supreme Court of Pennsylvania recently addressed whether an insured forfeits the right to insurance coverage when it settles a lawsuit without the insurer’s consent, in a case where the insurer has defended the suit subject to a reservation of rights. In Babcock & Wilcox v. American Nuclear Insurers, the Court answered that question in the negative and adopted a fair and reasonable standard limited to those cases where an insured accepts a settlement offer after and insurer breaches its duty by refusing a fair and reasonable settlement while maintaining its reservation of rights,
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New York Appellate Court Extends Additional Insured Coverage to Real Estate Manager’s Parent Company

In GMM Realty, LLC v. St. Paul Fire and Marine Insurance Company, the New York Appellate Court addressed a situation where the parent company of a real estate manager of the insured brought a declaratory judgment action against the insurer seeking defense and indemnification as an additional insured for a personal injury suit. After examining the Complaint and the relevant policy language, the Court held that the allegations of the Complaint suggested a reasonable possibility of coverage that triggered the insurer’s duty to defend. The underlying personal injury suit arose after the plaintiff slipped and fell near the entrance of
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Third Circuit Federal Court of Appeals Rules That Punitive Damages Are Not Recoverable Against an Insurer

In an opinion predicting Pennsylvania state law, the Third Circuit Federal Court of Appeals ruled that punitive damages awarded against an insured in a personal injury suit are not recoverable in a later breach of contract or bad faith suit against the insurer. In Wolfe v. Allstate, the Court examined Pennsylvania’s long-standing public policy regarding the uninsurability of punitive damages and predicted that the Pennsylvania Supreme Court would conclude that, in a bad faith action against an insurer, an insured may not collect as compensatory damages the punitive damages awarded against the insured in the underlying suit. In this case,
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Pennsylvania Supreme Court Finds Coverage Under Employer’s Liability Exclusion of CGL Policy Due to Ambiguous Meaning of “The Insured”

The Pennsylvania Supreme Court recently addressed the interpretation of an employer’s liability exclusion in a commercial general liability policy to determine its scope in excluding coverage when the policy applies to more than one insured. In Mutual Benefit Insurance Company v. Politsopoulos, the Court determined that the term “the insured” does not signify “all insureds” in cases where a commercial general liability policy makes varied use of the definite term “the insured” and the indefinite term “any insured.” The Court concluded that the use of the definite and indefinite articles created an ambiguity, such that “the insured” may be reasonably
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New York Court Rejects Plaintiff’s Attempt to Circumvent Assault & Battery Exclusion of CGL Policy

Most commercial general liability policies issued to bars and restaurants specifically exclude coverage for bodily injury arising out of an assault and battery. In order to avoid this limitation, Plaintiffs often try to trigger coverage by alleging that the insured’s negligence was the cause of the injury—not the actual assault and battery. This strategy may work in some jurisdictions, but it won’t work in New York. Following precedent set by the New York Court of Appeals in 1995, the Supreme Court of New York County held in Hermitage Insurance Company v. Beer-Bros, Inc. that the insurer had no duty to
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