A Guide to Homeowners' Insurance for California Wildfire Losses

April 12, 2021
William S. Bennett & Ryan G. Nelson - Saxe Doernberger & Vita, P.C.

After suffering historically destructive fires in 2018, California endured five of the six largest fires in state history in 2020. Nearly 10,000 fires burned over 4.2 million acres making 2020 the most significant California wildfire season on record. Sadly, a recent study from Stanford University2 predicts that the frequency and potency of these fires will only continue to increase in the coming years and decades, so it is important that homeowners understand what insurance coverage is available for wildfire-related losses.

Reprinted courtesy of William S. Bennett, Saxe Doernberger & Vita, P.C. and Ryan G. Nelson, Saxe Doernberger & Vita, P.C.
Mr. Bennett may be contacted at WBennett@sdvlaw.com
Mr. Nelson may be contacted at RNelson@sdvlaw.com

Event Cancellation Dispute "Scheduled" for Federal Court Ruling

April 5, 2021
Jeffrey J. Vita & Stephanie A. Giagnorio - Saxe Doernberger & Vita, P.C.

Emerald Holding, Inc. v. W.R. Berkley Syndicate Limited and Great Lakes Insurance SE US District Court – Central District of CA; Case No. 8:21-CV-00340

Emerald Holding Inc. (“Emerald”), a leading operator of business-to-business trade show events across the United States, has suffered millions of dollars in losses from canceled or postponed in-person events in order to comply with health and safety government mandates due to the Coronavirus pandemic.

Reprinted courtesy of Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and Stephanie A. Giagnorio, Saxe Doernberger & Vita, P.C.

Mr. Vita may be contacted at jvita@sdvlaw.com
Ms. Giagnorio may be contacted at SGiagnorio@sdvlaw.com

Unclear Sublimits Inapplicable to Superstorm Sandy Damage

March 29, 2021
Tred R. Eyerly - Insurance Law Hawaii

The Supreme Court of New Jersey found the policies' sublimits were not applicable to reduce coverage for property damage caused by Superstorm Sandy. N.J. Transit Corp. v. Certain Underwriters at Lloyd's London, 2021 N.J. LEXIS 4 (Jan. 27, 2021).

At the time Superstorm Sandy struck New Jersey, the New Jersey Transit Corporation (NJ Transit) had a $400 million multi-layered property policy program through eleven insurers. When NJ Transit sought coverage for water damage to its property caused by the storm, some of the insurers invoked the $100 million flood sublimit and declined to provide coverage up to the policy limit. NJ Transit filed suit for a declaratory judgment. The trial court found that the $100 million flood sublimit did not apply to NJ Transit's claims. Summary judgment was entered for NJ Transit.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Restaurant Group's Multi-Litigation Business Interruption Claims Survive Motion to Dismiss

March 22, 2021
Tred R. Eyerly - Insurance Law Hawaii

Society Insurance Company unsuccessfully sought to dismiss plaintiff restaurant group's claims for business interruption after shut-down orders followed the onset of COVID-19. In re Soc'y Ins. Co. COVID-19 Business Interruption Protection Insurance Litigation, 2021 U.S. Dist. LEXIS 32351 (N.D. Ill Feb. 22, 2021).

The multi-district litigation addressed Society Insurance's denial of business- interruption coverage for several restaurants based in several states whose operations were impacted by the COVID-19 pandemic Society sought dismissal of three cases.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Warming Up Winter Preparedness Plans

March 15, 2021
Ken Alderden - Construction Executive

Construction projects are ramping up with the start of the new year, and with snow falling throughout many parts of the country, those same projects are being met with more risk. Heavy snow, ice and sub-zero temperatures all create extra obstacles, including increased injury risk, damage to equipment and costly interruptions.

Reduce the unpredictability of winter weather and keep projects moving forward with the following idea starters.

Reprinted courtesy of Ken Alderden, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Alderden may be contacted at Ken.Alderden@sentry.com

Good Result for Goodwill on Its Bid for COVID-19 Business-Interruption Claim

March 8, 2021
Lorelie S. Masters & Rachel E. Hudgins - Hunton Insurance Recovery Blog

A California state court denied an insurer’s motion to dismiss Goodwill Industries of Orange County’s COVID-19 business-interruption claim after an apparent reassessment of how California’s federal courts have applied (or, rather, misapplied) California precedent to COVID-19 cases. The case is Goodwill Industries of Orange County, California v. Philadelphia Indemnity Insurance Co., No. 30-2020-01169032-CU-IC-CXC (Cal. Super. Ct. Jan. 28, 2021).

Reprinted courtesy of Lorelie S. Masters, Hunton Andrews Kurth and Rachel E. Hudgins, Hunton Andrews Kurth

Ms. Masters may be contacted at lmasters@HuntonAK.com
Ms. Hudgins may be contacted at rhudgins@HuntonAK.com

McLaughlin v. Travelers

March 1, 2021
Sally Kim & Kyle Silk-Eglit - Gordon & Rees Insurance Coverage Law Blog

The Washington State Supreme Court recently issued a decision that clarified whether a bicyclist is a “pedestrian” for purposes of personal injury protection (“PIP”) coverage. McLaughlin v. Travelers Commercial Ins. Co., 476 P.3d 1032 (2020).

Reprinted courtesy of Sally S. Kim, Gordon & Rees and Kyle J. Silk-Eglit, Gordon & Rees
Ms. Kim may be contacted at sallykim@grsm.com
Mr. Silk-Eglit may be contacted at ksilkeglit@grsm.com

Oklahoma Court Issues Reasoned Opinion, Adopts Policyholder View on “Physical Loss or Damage” as Only Reasonable One, in Cherokee Nation COVID-19 Coverage Win

February 22, 2021
Sergio F. Oehninger, Geoffrey B. Fehling & Matt Revis - Hunton Insurance Recovery Blog

As previously reported, an Oklahoma state court recently granted summary judgment to the Cherokee Nation for its COVID-19 business interruption claim. The court has now issued a more substantive opinion, establishing the merits of the Cherokee Nation’s claim and providing yet another blueprintfor policyholders seeking to recover COVID-19-related losses under “all risk” commercial property insurance policies.

Reprinted courtesy of Sergio F. Oehninger, Hunton Andrews Kurth and Geoffrey B. Fehling, Hunton Andrews Kurth
Mr. Oehninger may be contacted at soehninger@HuntonAK.com
Mr. Fehling may be contacted at gfehling@HuntonAK.com

Ninth Circuit Finds Excess Carrier Can Challenge Primary Insurer's Settlement Payment and Erosion of Limits

February 15, 2021
Tred R. Eyerly - Insurance Law Hawaii

The court found that the excess carrier had grounds to challenge the primary carrier's allocation of a settlement payment. Scottsdale Ins. Co. v. Certain Underwriters at Lloyds, London, 2020 U.S. App. LEXIS 39771 (9th Cir Dec. 18, 2020).

In the underlying case, Underwriters settled on behalf of the insured law firm under a professional liability policy. Scottsdale sued Underwriters for a declaratory judgment that the settlement did not erode the limits. Underwriters counterclaimed seeking equitable contribution. On cross motions for summary judgment, the district court concluded that: (1) Scottsdale could not challenge Underwriters' settlement payment and the corresponding erosion of policy limits, and (2) Underwriters was not entitled to equitable contribution from Scottsdale.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Addressing These Key Issues Can Help Improve Safety on the Jobsite

February 8, 2021
Amerisure - Construction Executive

Risk management strategies allow for improved situational awareness, clear directions in the event of an accident and have the capacity to help reduce insurance claims.

However, effective plans require several key steps, and forgetting a single element can potentially throw the entire plan off track. In order to prevent this from happening, all companies—especially those in high-risk industries like construction—should focus on a comprehensive approach to risk management.

Reprinted courtesy of Amerisure, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Will Insurance Cover Risks Revealed By The Pandemic?

February 1, 2021
Richard Korman & Scott Van Voorhis - Engineering News-Record

COVID-19 has exposed long-overlooked frailties in existing insurance and contract terms on costs and delays, provoking a needed conversation. The vulnerabilities came into view within the first months of the pandemic.

Reprinted courtesy of Richard Korman, Engineering News-Record and Scott Van Voorhis, Engineering News-Record

Mr. Korman may be contacted at kormanr@enr.com

Sharing Company Culture to Strengthen Surety Relationships

January 25, 2021
Joshua Loftis, Bob Bowman & Colby White - Construction Executive

Established as an essential business in the early days of the COVID-19 pandemic, the construction industry quickly adapted to a new way of doing business. The construction industry’s response to this unprecedented adversity is an inspiration. A deeper dive reveals a collection of organizations with extraordinary resilience, and in many cases, a renewed focus on organizational culture and wellbeing.

Surety companies have unique visibility into a construction organization. This visibility provides insight into the remarkable response construction organizations had to the events of 2020. Surety conversations typically begin and end (appropriately) with a discussion around financial standing and performance. While many construction leaders will point to prudent financial management and performance as a reason for survival and success, the real passion is revealed when leaders note the strength of the organization’s culture.

Reprinted courtesy of Joshua Loftis, Bob Bowman & Colby White, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Loftis may be contacted at jloftis@csdz.com
Mr. White may be contacted at cwhite@csds.com
Mr. Bowman may be contacted at bbowman@csdz.com

How Are Insurers And Policyholders Faring in COVID-19 Business Interruption Coverage Litigation?

January 18, 2021
Edward M. Koch & Elizabeth C. Dolce - White and Williams LLP

This article is based on a presentation by the authors (along with Marc L. Penchansky and Felix S. Yelin) at White and Williams LLP’s Virtual Coverage College® on October 22, 2020. Every year, hundreds of insurance professionals come to Philadelphia—this year via our online platform—to participate in a full day of lectures and interactive presentations by White and Williams lawyers and guest panelists about the latest issues and challenges involved in claims handling and insurance litigation. Visit coveragecollege.com for more information and stay tuned for Coverage College® 2021.

With the COVID-19 pandemic and government stay-at-home orders came an unprecedented number of claims for business interruption coverage under first-party property policies—and the inevitable coverage litigation over those claims followed closely behind. As of this writing, we are aware of at least 70 court decisions on motions by insurers to dismiss policyholder lawsuits seeking business interruption coverage for COVID-19 related losses.

Reprinted courtesy of Edward M. Koch, White and Williams LLP and Elizabeth C. Dolce, White and Williams LLP
Mr. Koch may be contacted at koche@whiteandwilliams.com
Ms. Dolce may be contacted at dolcee@whiteandwilliams.com

Federal Court Provides Soothing Comfort for Spa’s COVID-19 Business Income Claim

January 11, 2021
Michael S. Levine & Meagan R. Cyrus - Hunton Insurance Recovery Blog

On December 9, 2020, in Elegant Massage, LLC v. State Farm Mut. Auto. Ins. Co., No 2:20-cv-00265-RAJ-LRL (E.D.V.A. Dec. 9, 2020) , a Virginia federal court refused to dismiss a majority of the policyholder’s breach of contract claim and its request for bad faith damages, declaratory judgment and class certification, all stemming from the insurers’ denial of coverage for COVID-19 related business income losses. The policyholder, a spa, purchased an all-risk property insurance policy with coverage for, among other things, loss of business income and extra expense. The spa, a non-essential business, closed on March 16, 2020 as a result of state orders requiring all non-essential businesses to close due to the COVID-19 pandemic. It did not reopen until May 15. Once re-opened, however, the policyholder was required to implement operational controls and precautions to ensure the safety of the public and its employees. Following its closure, the policyholder sought coverage under its all-risk insurance policy. The insurer denied coverage for the claim, contending first that losses due to the COVID-19 pandemic and subsequent closure orders did not constitute “property damage” within the meaning of the policy and, second, even if the losses were because of “property damage,” the claim implicated various exclusions to coverage. The policyholder then initiated suit against its insurers.

Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Meagan R. Cyrus, Hunton Andrews Kurth

Mr. Levine may be contacted at mlevine@HuntonAK.com
Ms. Cyrus may be contacted at mcyrus@HuntonAK.com

Federal Court Remands COVID-19 Case Presenting Novel and Important Issues of State Insurance Law

January 4, 2021
Tred R. Eyerly - Insurance Law Hawaii

The federal district court exercised its discretion under the Declaratory Judgment Act, declining jurisdiction over a case presenting claims arising from COVID-19. Marc Daniel Hospitality, LLC v. AmGuard Ins. Co., 2020 U.S. Dist. LEXIS 191956 (D. N.J. Oct 16, 2020).

Plaintiff operated an upscale sit-down restaurant and whiskey bar offering a full menu. In March 2020, state and local orders limited the scope and hours of operations of all restaurants in the state due to the COVID-19 pandemic. Subsequent orders mandated that New Jersey residents remain at home except under certain exceptions. Plaintiff had to temporarily close its restaurant.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Engineering Coverage for Social Engineering Schemes in Light of New Jersey Federal Court Opinion Finding No Errors and Omissions Coverage for Email Scam

December 29, 2020
Andrea DeField & Michael L. Huggins - Hunton Andrews Kurth

It’s a cautionary tale of cyber fraud. A title agent in a real estate transaction receives an email ostensibly from the mortgage lender providing instructions for transferring the loan proceeds into a settlement bank account. After transferring the funds ($520,000), it becomes apparent that the transfer instructions came from an email address that was one letter off from the mortgage lender’s actual email address – it was a scam. But it’s too late, the scammer has already withdrawn the funds from the settlement account and cannot be traced.

Reprinted courtesy of Andrea DeField, Hunton Andrews Kurth and Michael L. Huggins, Hunton Andrews Kurth
Ms. DeField may be contacted at adefield@HuntonAK.com
Mr. Huggins may be contacted at mhuggins@HuntonAK.com

How COVID-19 Has Affected Risk in the Construction Industry

December 21, 2020
Gary Clevenger - Construction Executive

More eyes are on the growth and response of the construction industry than ever before. A McKinsey report distinguished construction as one of the industries that has the potential to help both communities and economies recover following COVID-19. The steps construction companies take in the coming months could lead to the industry coming back stronger and more innovative. However, with any rapid transition, comes new risk.

The onset of COVID-19 introduced many new challenges to construction professionals. On top of a shortage of trained construction professionals that has been prevalent in the industry, companies are now facing restrictions on how many workers can be on a jobsite—all leading to a sudden increase in fatigue among workers. There is an increased focus on job safety training and physical fitness, as time off from the job during quarantine likely depleted some workers’ skills. Additionally, from mental distractions due to the stress of the pandemic to additional PPE requirements—there are many new obstacles workers in the construction industry are now facing.

Reprinted courtesy of Gary Clevenger, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Clevenger may be contacted at gary.clevenger@cna.com

Wildfires Are Close to Torching the Insurance Industry in California

December 14, 2020
Leslie Kaufman & Eric Roston - Bloomberg

Dave Sapsis went to bed on Sunday, Aug. 16, with a sense of foreboding. As the head of risk mapping at the California Department of Forestry and Fire Protection, he’d seen the readouts from the agency’s high-precision weather forecasting system showing broad bands of clouds that could produce lightning without rain. After a wet spring, the state had spent the summer months baking under record-high temperatures, turning all those spring shoots into dry tinder.

Insurance Companies Drop Appeal Against the London High Court’s Ruling in the FCA’s “Test-Case”

December 7, 2020
Lorelie S. Masters & Jorge R. Aviles - Hunton Insurance Recovery Blog

As we explained in our earlier post, in a decision that could influence how policyholders and insurers around the world address business-interruption coverage for COVID-19 losses, the London High Court recently handed down its much-anticipated judgment in the Financial Conduct Authority’s “Test Case,” The Financial Conduct Authority (FCA) v. Arch et al. Because the judgment provided that coverage was available for COVID-19 business-interruption losses under most of the policy wordings at issue, it was highly anticipated that the insurance companies at issue would challenge the judgment in a fast-tracked “leapfrog” appeal to the Supreme Court of the U.K., expected to be heard by the end of the year. Yesterday, however, six of the insurance companies subject to the judgment decided not to pursue an appeal in connection with some of the policies, and one of the insurers stated that it would instead begin to make payments where appropriate.

Reprinted courtesy of Lorelie S. Masters, Hunton Andrews Kurth and Jorge R. Aviles, Hunton Andrews Kurth
Ms. Masters may be contacted at lmasters@HuntonAK.com
Mr. Aviles may be contacted at javiles@HuntonAK.com

MDL Panel Denies Consolidation for COVID-19 Insurance Cases for All Insurers (with One Exception)

November 30, 2020
Scott P. DeVries & Rachel E. Hudgins - Hunton Insurance Recovery Blog

As we reported in a prior blog, on August 14, the Judicial Panel on Multidistrict Litigation rejected plaintiffs’ request for a consolidation of all COVID-19 insurance coverage federal litigation, agreeing to consider mini-MDLs as respects five specific insurers, which accounted for roughly one-third of the federal cases. On October 2, the Panel rejected the concept of mini-MDLs as respects four of these five insurers and accepted an MDL for the fifth insurer.

Reprinted courtesy of Scott P. DeVries, Hunton Andrews Kurth and Rachel E. Hudgins, Hunton Andrews Kurth
Mr. DeVries may be contacted at sdevries@HuntonAK.com
Ms. Hudgins may be contacted at rhudgins@HuntonAK.com

Beyond General Liability Insurance: Other Liability Exposures to Be Aware Of

November 23, 2020
Jeffrey Cavignac - Construction Executive

Every contractor of any size likely carries commercial general liability insurance. Not only is it prudent to carry, nearly all contracts require it. Auto liability and employers liability (part of a workers' compensation policy) are also mandatory in most agreements. There are, however, a number of other liability exposures that exist for a construction company and should be evaluated and considered.

Reprinted courtesy of Jeffrey Cavignac, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Failure to Plead Physical Loss or Damage Leads to Dismissal of COVID-19 Claim

November 16, 2020
Tred R. Eyerly - Insurance Law Hawaii

The insured's claim for business interruption losses due to COVID-19 was dismissed for failure to plead direct physical loss of or damage to property. Malaube LLC v. Greenwich Ins. Co., 2020 U.S. Dist. LEXIS 156027 (S.D. Fla. Aug 26, 2020).

The insured restaurant had to suspend operations when local and state orders closed all onsite dining due to COVID-19. The insured submitted a claim for business interruption losses to its carrier. Greenwich denied the claim because the insured did not experience any physical loss or damage to the insured property. The insured sued.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Court Denies Remand of COVID-19 Case

November 9, 2020
Tred R. Eyerly - Insurance Law Hawaii

The federal district court rejected a challenge to its diversity jurisdiction and rejected the insured's attempt to remand the COVID-19 claims back to state court. Vandelay Hospitality Group LP v. Cincinnati Ins. Co., 2020 U.S. Dist. LEXIS 149196 (N.D. Tex. Aug. 18, 2020).

Vandelay purchased a commercial property policy from Cincinnati through Swingle Collins, its registered broker, and its employee, Baron Cass. The policy was "all risk" and purported to insure three of Vandelay's restaurants for, amoung other things, direct physical loss and loss incurred due to business interruptions.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Insuring Against Climate Change: How Traditional Insurers and Start-Up Companies are Implementing Innovative Technologies to Address Climate Risks

November 2, 2020
Adam M. Berardi & Marianne Bradley - Complex Insurance Coverage Reporter

Over the last decade, there has been a global increase in the focus on climate change and the risks and dangers associated with it. And for good reason. Damage from climate-related disasters was in the billions of dollars in 2019 alone. California wildfires caused $25 billion in property damage, while Typhoon Hagibis in Japan cost an estimated $15 billion. Other extreme weather events, including rampant brush fires in Australia, widespread droughts in East Africa and severe flooding in South Asia, have had devastating consequences.

Insurers seeking to underwrite weather-related risks face growing challenges. While the availability of insurance can help mitigate some of the impacts of climatic shifts, insurers stand to lose billions of dollars from catastrophic weather events. As a result, some insurers have had to significantly increase premiums in particularly risk-prone areas, while others have found it difficult — if not impossible — to economically write or renew coverage.

Reprinted courtesy of Adam M. Berardi, White and Williams LLP and Marianne Bradley, White and Williams LLP
Mr. Berardi may be contacted at berardia@whiteandwilliams.com
Ms. Bradley may be contacted at bradleym@whiteandwilliams.com


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