Insurers Should Prepare for Another Wild Winter

The 2014-15 winter season has already made its presence felt in much of the United States. The Eastern United States has recently been faced with temperatures 10 to 20 degrees below normal, while significant lake-effect snow has fallen in areas near the Great Lakes. Most notably, a week-long snow event dumped up to seven feet of snow in areas near Buffalo, New York. This is merely the beginning of what appears to be another active winter season. Portions of the Northeast and Mid-Atlantic are expected to see significant cold snaps over the course of the winter, although the cold is
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Pennsylvania Supreme Court Declines to Adopt Restatement (Third) of Torts in Product Liability Cases

In a landmark decision, the Pennsylvania Supreme Court declined to adopt the Restatement (Third) of Torts in product liability cases. Jurisdictions that adopted the Third Restatement allow defendants to introduce evidence regarding the foreseeability of a product’s risks and require plaintiffs to establish that a safer alternative design was viable when the product was manufactured. In a 4-2 decision in the matter of Tincher v. OmegaFlex, the Court continued to apply the Second Restatement, which focuses upon the characteristics of the product and does not permit consideration of a manufacturer’s conduct or the feasibility of an alternative design. In support
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Insurers Must Establish State of Mind for NJ Insurance Fraud Protection Act Claims

The New Jersey Superior Court, Appellate Division recently issued an opinion highlighting the challenges of establishing liability against a policyholder for violation of the Insurance Fraud Protection Act (“IFPA”). In Continental Cas. Co. v. Hochschild, the Court addressed alleged misrepresentations made by a recreational boat owner when applying for an insurance policy. These misrepresentations were discovered after the policyholder submitted a claim for fire damage to the boat. Accordingly, the insurer denied coverage and cancelled the policy. The insurer subsequently brought a declaratory judgment action against the policyholder, seeking to declare the policy void based upon the alternative causes of
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New Jersey Implements Complex Business Litigation Program on State-Wide Basis That May Impact Some Insurance Cases

On November 13, 2014, the New Jersey Supreme Court issued an Order implementing the Complex Business Litigation Program on a state-wide basis. The Program, which has been operating in Bergen and Essex counties since 1996, will now encompass all cases filed in New Jersey on or after January 1, 2015 satisfying the criteria summarized below. The language in the Order may be interpreted to exclude insurance coverage matters filed by individual policyholders, including bad faith claims. However, the Program is likely to encompass many commercial insurance lawsuits, as well as construction defect matters wherein insurers are defending contractors. Cases under
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Third Circuit Says No Coverage for Damage Caused By Decomposed Body

In Certain Underwriters at Lloyd’s, London Subscribing to Policy No. SMP3791 v. Creagh, 563 Fed. Appx. 2009 (3d Cir. 2014), a case of first impression, John M. Clark and Georgia S. Foerstner, convinced the United States Court of Appeals for the Third Circuit that coverage for property damage caused by a decomposed body was excluded per the policy’s Microorganism and “Seepage” exclusions. In August 2011, Underwriters’ insured, Williams Creagh, made a claim for property damage in the amount of $180,000 for damage caused by the decomposed body of a tenant. Fluids seeped from the body causing damage to several rooms
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New Jersey Court of Appeals Enforces Lloyd’s Suit Limitations Provision

In Rihanna Corp. v. Certain Underwriters At Lloyd’s of London, App. Div. (per curiam) (14 pp.), the New Jersey Court of Appeals found in favor of Certain Underwriters at Lloyd’s of London and against plaintiffs enforcing the applicable policy’s one year suit limitations provision and concluding that plaintiffs filed their complaint outside of the required one year. Specifically, plaintiffs appealed an order granting defendant Certain Underwriters at Lloyd’s of London summary judgment and an order denying plaintiffs’ motion to amend their complaint. Plaintiffs’ declaratory judgment action against defendant sought payment under a business owner’s insurance policy for an October 3,
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