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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Archives for Insurance Law
Pennsylvania Federal Court Finds That Illegal Passing Does Not Trigger the Criminal Act Exclusion of an Accidental Death Policy
In Locklear v. Sun Life Assurance Company of Canada, the United States District Court for the Middle District of Pennsylvania held that an insurer could not use alleged vehicle code violations to trigger the “criminal act” exclusion of an accidental death policy. The insurer denied benefits to the widow of a man who was killed in a car accident when the motorcycle he was riding collided with a truck while he was attempting to pass a construction vehicle in a no-passing zone. Plaintiff brought suit under ERISA after the insurer denied her claim and she exhausted all her administrative appeals.
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Federal Court In Kentucky Refuses to Allow Insurer to Assert Reverse Bad Faith Claim
This week the United States Sixth Circuit Court of Appeals declined to allow State Auto Property & Casualty Co. to assert a reverse bad faith claim against a policyholder who admitted to submitting a fraudulent insurance claim after conspiring to burn her own house down. The federal appellate court concluded that Kentucky law does not recognize an action by an insurer against an insured for reverse bad faith. Fortunetly for insurers, many other states and jurisdiction (such as Pennsylvania for example) do recognize a reverse bad faith cause of action action, which allow insurers to recover their costs and expenses,
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New York Court Finds No Duty to Defend or Indemnify Under Additional Insurance Endorsement Where Injury Did Not Arise From Leased Premises
Slip and falls on sidewalks in front of leased premises often raise questions of who’s responsible, landlord or tenant, and whose carrier should respond in damages. In Leading Ins. Group Ins. Co., Ltd. v. Argonaut Great Cent. Ins. Co., 2015 NY Slip Op 50574 (April 22, 2015), the Supreme Court of New York for Westchester County said the answer lies in the lease and whether the sidewalk is part of the leased premises. In Leading, Hartsdale, the owner of a building leased to tenants for use as a dry cleaner, was sued by a woman, Kellner, who slipped and fell
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New York Appellate Court Enforces Insured’s Duty to Submit to Examination Under Oath
Metro Psychological Servs., P.C. v. 21st Century N. Am. Ins. Co., 2015 NY Slip Op 50470, decided April 7, 2015, involved an action by a provider to recover assigned first-party no-fault benefits. The defendant insurer moved for summary judgment on the grounds that it timely denied plaintiff’s claim based on its failure to appear at a scheduled examination under oath (EUO). The insurer presented evidence that it mailed the EUO scheduling letters, the date, place and time of the EUOs were not unreasonable and that plaintiff failed to appear. Plaintiff opposed the motion on the grounds that there was no
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New Jersey Trial Court Rejects Application of “Continuous Trigger” Theory to Construction Defect Claim That Manifested Before Policy Period
The Superior Court, Law Division, of Hudson County, New Jersey has held that a claimant is not entitled to seek coverage under a liability insurance policy pursuant to a “continuous trigger” theory for damage that occurred prior to the policy period. Cypress Point Condominium Ass’n v. Selective Way Ins. Co. concerns a lawsuit filed against numerous contractors involved in the construction of a condominium complex. The lawsuit contended that water infiltration occurred at the windows of condominium units. One of the contractors procured insurance with the defendant insurer in between the time the contractor had been named in an amended
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Pennsylvania Superior Court Upholds $2 Million Insurance Bad Faith Verdict
The Pennsylvania Superior Court has upheld a verdict of over $2 million against a title insurer for bad faith claims handling. Davis v. Fidelity Nat. Title Ins. Co. concerned the purchase of property for construction of a housing development. After another individual claimed to be the owner of the property, the purchaser filed a claim under his title insurance policy. Nearly two years later, the insurer acknowledged a problem with the title and promised resolution of the matter. Over three years later (and nearly five years after the claim was filed), the insurer resolved the claim by purchasing the property
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New Jersey State Court Holds That Flood Sublimits Do Not Apply to Sandy Storm Surge Claims
The Superior Court, Law Division, of Essex County, New Jersey has held that a flood coverage sublimit does not apply to damage arising from Superstorm Sandy. In Public Service Enterprise Group v. Ace Insurance, the utility Public Service Enterprise Group (“PSEG”) was insured under policies with total coverage limits of $1 billion. The policies did not contain a sublimit for named windstorms, but did have a $250 million sublimit for flood damage, as well as a $50 million sublimit for damage within two designated flood zones. In its motion for summary judgment, PSEG contended that the flood sublimits should not
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Eastern District of Pennsylvania Holds That Alleged Delay Does Not Preclude Insurer From Seeking Declaratory Judgment After Timely Reservation of Rights
The United States District Court for the Eastern District of Pennsylvania has held that absent prejudice to the policyholder, an insurer that timely reserves its right to deny liability coverage is not precluded from seeking a declaratory judgment, even if the declaratory judgment is filed well after the insurer began providing a defense. Nationwide Prop. and Cas. Co. v. Shearer concerned a lawsuit alleging that several policyholders and other property owners discharged sewage and wastewater onto the underlying plaintiff’s neighboring property. The defendant insurer advised all of the policyholders that it would be defending the matter under a reservation of
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Clark & Fox Obtains Dismissal of Coverage Action Pursuant to Suit Limitation Clause
The Supreme Court of Nassau County, New York has granted a Motion to Dismiss filed by Clark & Fox in an insurance coverage action filed in contravention of the subject policy’s suit limitation clause. John Clark, Georgia Foerstner, and Patrick Reilly litigated this matter on behalf of Certain Underwriters at Lloyd’s, London. Bachir v. Lloyd’s of London concerned a claim regarding a fire loss to a restaurant that was denied due to the late payment of a policy premium. The policy in question contained a suit limitation clause requiring any actions to be brought within two years of the loss.
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