Fire Safety and Restoration Essentials in Commercial Construction

April 17, 2019
Tami Casey - Construction Executive

Although commercial contractors are usually aware of the dangers of fires at jobsites, that doesn’t mean they are prepared for one. For many, a big part of the problem is putting too much faith in their builder’s risk insurance policy without understanding the minutiae. For others an “it won’t happen to me” attitude is the culprit. Whatever the case, inadequate fire preparedness can lead to significant delays and exponential cost increases when the worst happens. When it comes to preparing for fire risk, having the right insurance is only the beginning of what’s important.

Establishing a Comprehensive Builder’s Risk Policy
Given a lack of functional fire protection systems, new construction and renovation projects are more susceptible to fires. Builder’s risk insurance provides vital protection during this vulnerable time; however, builders commonly make errors and oversights that cost them when putting together policies and fulfilling reporting requirements. For instance, builders who fail to properly report the actual percent complete in their evaluation could be underinsured if peril strikes.

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


Fifth Circuit Addresses When A Law Firm Should Reasonably Expect A Future Claim In Analyzing Policy Rescission

April 10, 2019
Brian C. Bassett - TLSS Insurance Law Blog

In Imperium Ins. Co. v. Shelton & Assocs., 2019 WL 1096336 (5th Cir. March 6, 2019), the U.S. Court of Appeals for the Fifth Circuit addressed when a lawyer’s professional liability policy may be rescinded based on material misrepresentations in an application concerning potential claims against the firm.

Shelton & Associates, P.A., (“Shelton”) was issued a professional liability insurance policy from Imperium Insurance Company (“Imperium”), on January 24, 2013. Shelton was designated as the “Named Insured” on the policy and the policy’s coverage period extended from February 1, 2013 until February 1, 2014.

Mr. Bassett may be contacted at bbassett@tlsslaw.com


Michigan Court Addresses Claim Reporting Obligations Under E&O Policy

April 3, 2019
Brian Bassett - TLSS Insurance Law Blog

In Illinois National Ins. Co. v. AlixPartners, LLP, 2019 WL 939018 (Mich. App. Ct. Feb. 26, 2019), a Michigan appellate court addressed an insured’s obligation to report a claim under a professional liability policy in order to satisfy the policy’s claims made and reported requirements.

Illinois National Insurance Company (“Illinois National”) sued to recoup the payment of an arbitration award on AlixPartners LLP’s (“AlixPartners”) behalf in February 2013. After making the payment, Illinois National asserted that it should not have paid because the claim was not covered under any of the professional liability policies it issued to AlixPartners.

Mr. Bassett may be contacted at bbassett@tlsslaw.com


Property Insurer Invoking Appraisal under Property Insurance

March 27, 2019
David Adelstein - Florida Construction Legal Updates

Property insurance policies routinely contain an appraisal provision. The provision may read something to the effect:

If you and we fail to agree on the amount of loss, either may request an appraisal of the loss. However, both parties must agree to the appraisal. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. . . . If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of the loss.

Mr. Adelstein may be contacted at dma@kirwinnorris.com


The United States Court of Appeals, Fourth Circuit, Finds Wrap-Up Exclusion Does Not Bar Coverage of Additional Insureds

March 18, 2019
Callie E. Waers, Esq. - Florida Construction Law News

The United States Court of Appeals, Fourth Circuit, recently took a close look at the application of a “controlled insurance program exclusion” (wrap-up exclusion) to additional insureds on a commercial general liability policy. In Cont’l Cas. Co. v. Amerisure Ins. Co., 886 F.3d 366 (4th Cir. 2018), the Fourth Circuit examined the interplay of an enrolled party’s additional insured status on an unenrolled party’s commercial general liability (“CGL”) policy with a wrap-up exclusion. The court applied North Carolina law and found that pursuant to the policy’s own language, the exclusion only applied to the original named insured, not the additional insureds.

Ms. Waers may be contacted at Callie.Waers@csklegal.com


Maximizing Mandated Mediation in D&O Coverage Disputes

March 4, 2019
John McCarrick & Giulio Zanolla - White and Williams LLP

Many D&O insurance policies include a contractual requirement that the D&O insurer and policyholder attempt a negotiated resolution, typically through mediation, of any coverage-related dispute between the parties before the parties can resort to litigation or arbitration. However, too often such requirements lead to an unproductive mediation session – not because the process is flawed, but because the parties can have unrealistic expectations about what can be achieved through a mandatory mediation process.

Mr. McCarrick may be contacted at mccarrickj@whiteandwilliams.com


DFS Wins New York State Appeal Reinstating Portions of Regulation Aimed at Controlling Title Insurance “Marketing” Expenses

February 27, 2019
Steven Ostrow, Steven Coury & Patrick Haggerty - White and Williams LLP

On January 15, 2019, a New York appellate court reinstated portions of Insurance Regulation 208, which was promulgated by the Department of Financial Services (DFS) in December 2017. The regulation prohibited title insurers from “wining and dining” attorneys and other agents in the real estate market in exchange for business referrals, while passing those costs through to the consumers. The appellate court decision overturned a 2018 New York lower court ruling that annulled Insurance Regulation 208 in its entirety on the grounds that its provisions were arbitrary and capricious and that the regulation exceeded DFS’ regulatory authority in violation of separation of powers.

Reprinted courtesy of White and Williams LLP attorneys Steven Ostrow, Steven Coury and Patrick Haggerty
Mr. Ostrow may be contacted at ostrows@whiteandwilliams.com
Mr. Coury may be contacted at courys@whiteandwilliams.com
Mr. Haggerty may be contacted at haggertyp@whiteandwilliams.com


Year in Review: Top Insurance Cases of 2018

February 19, 2019
Michael S. Levine & Latosha M. Ellis - Hunton Andrews Kurth

2018 was a busy year for courts deciding insurance coverage disputes. Many of those decisions will shape the coverage landscape for years to come. Policyholders enjoyed their fair share of the wins, including substantial victories in areas involving social engineering to disgorgement of corporate gain. We take this opportunity to reflect on some of the year’s most notable coverage decisions.

Social Engineering
2018 was a banner year for decisions addressing losses resulting from social engineering phishing, spoofing and other schemes of trickery and deception.

Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Latosha M. Ellis, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Ms. Ellis may be contacted at lellis@HuntonAK.com


Texas Supreme Court Holds Anadarko May Be Able to Recover Substantial Deepwater Horizon Defense Costs from Insurers

February 11, 2019
Anthony B. Cavender - Gravel2Gavel

On January 25, the Texas Supreme Court issued a unanimous ruling in the case of Anadarko Petroleum Corp. and Anadarko E&P Co. v. Houston Cas. Co., et al., characterized as an “interlocutory permissive appeal,” reversing the decision of the U.S. Court of Appeals for the Ninth Circuit, sitting in Beaumont, TX, regarding Anadarko’s insurers’ obligation to pay a significant amount of Anadarko’s legal defense costs that resulted from its liability in the Deepwater Horizon oil spill.

Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com


Insured May Recover Consequential Damages From Insurer’s Breach of Duty to Defend

February 6, 2019
Tred R. Eyerly - Insurance Law Hawaii

Answering a certified question, the Nevada Supreme Court determined that an insurer breaching its duty to defend may be liable for consequential damages caused to the insured. Century Sur. Co. c. Andrew, 2018 Nev. LEXIS 112 (Nev. Dec. 13, 2018).

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


Insured Proves Collapse, but Fails to Establish Any Value for Loss

January 28, 2019
Tred R. Eyerly - Insurance Law Hawaii

While the insured was able to carry his burden to show the collapse of a roof, he failed to establish damages under the policy. Iannucci v. Allstate Ins. Co., 2018 U.S. Dist. LEXIS 203687 (N.D. N.Y. Dec. 3, 2018).

In 2005, the insured purchased a parcel of land together with a three-story building constructed in 1870. No one resided in the building at the time of purchase or afterward. The building was not well maintained and all utilities were shut off. No work was done on the building between 2005 and 2014. Between 2011 and 2014, the Fire Department issued multiple zoning/ordinance violation notices ordering the insured to make various improvements to the building and property. A notice issued in October 2013 stated that "the roof on your house needs to be replaced." Before any work was done on the roof, however, it collapsed during a snowstorm on February 21, 2014.

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


Labor Costs Not Excluded From Depreciation When Determining Actual Cash Value

January 21, 2019
Tred R. Eyerly - Insurance Law Hawaii

The court dismissed a class action suit against State Farm which sought to establish that a calculation of actual cash value (ACV) in a homeowners policy could not depreciate the cost of labor. Cranfield v. State Farm Fire & Cas. Co., 2018 U.S. Dist. LEXIS 199618 (N.D. Ohio Nov. 26, 2018)

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


Forest Fire Constitutes One Occurrence

January 15, 2019
Tred R. Eyerly - Insurance Law Hawaii

The Wisconsin Supreme Court determined that a fire damaging several properties arose from one occurrence. Secura Ins. v. Lyme St. Croix Forest Company, LLC., 2018 Wis. LEXIS 579 Oct. 30, 2018).

A fire broke out on forest land owned by Lyme St. Croix Forest Company. Known as the "Germann Road Fire," it burned 7, 442 acres over three days. Real and personal property belonging to many individuals and businesses were damaged. The fire allegedly began while equipment owned by Ray Duerr Logging, LLC was being repaired. Flames quickly spread from dry grass to a pile of recently felled trees and spread to the surrounding forest.

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


Top 10 Insurance Cases of 2018

January 9, 2019
Jeffrey J. Vita & Grace V. Hebbel - Saxe Doernberger & Vita, P.C.

2018 was a year of landmark decisions regarding insurance coverage for a variety of emerging claims, including cyber fraud, the "Me Too" movement, and wildfires. Read on to learn more as well as to find out what cases you should keep your eye on as 2019 unfolds.

1. Black & Veatch Corp. v. Aspen Ins. (Uk) Ltd
882 F.3d 952 (10th Cir. 2018)
United States Court of Appeals, Tenth Circuit
February 13, 2018
Will New York join the majority in finding that faulty work by a subcontractor is a covered occurrence?

Reprinted courtesy of Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and Grace V. Hebbel, Saxe Doernberger & Vita, P.C.
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. Hebbel may be contacted at gvh@sdvlaw.com


Serious Dump and Ready-Mix Delivery Truck Accidents Edge Higher

January 2, 2019
Scott Van Voorhis – Engineering News-Record

Serious accidents involving dump trucks and ready-mix concrete delivery trucks continue to edge up, part of a persistent, multi-industry problem with poor driving habits that has not yet responded to increased fleet and vehicle insurance premiums. Federal regulators and industry safety experts have sought to cut the accidents by limiting driver fatigue and using technology to keep a closer tab on what happens on the road.

ENR may be contacted at ENR.com@bnpmedia.com


Insurer's Knowing Violation of Texas Insurance Code May Entitle Insured to Treble Damages

December 19, 2018
Bethany L. Barrese - Saxe Doernberger & Vita, P.C.

The Fifth Circuit’s recent opinion in Lyda Swinerton Builders, Inc. v. Oklahoma Sur. Co.1 includes policyholder-friendly holdings on Texas law concerning the duty to defend and the potential to recover treble damages for an insurer’s knowing violation of Texas Insurance Code.

Ms. Barrese may be contacted at blb@sdvlaw.com


A Guide to Homeowners' Insurance for California Wildfire Losses

December 11, 2018
William S. Bennett - Saxe Doernberger & Vita, P.C.

In 2017 and 2018 alone, California experienced the two largest and the first and fourth deadliest fires in its history.

Sadly, a University of California report predicts that the frequency and potency of these fires will only continue to increase in the coming years and decades, increasing the importance of knowing about insurance.

Mr. Bennett may be contacted at wsb@sdvlaw.com


Top 10 List of Scariest Insurance Policy Terms

December 4, 2018
Theresa A. Guertin - Saxe Doernberger & Vita, P.C.

SDV attorneys spend a lot of time reviewing insurance policies for our construction industry clients. From analyzing policies that are meant to provide additional insured coverage to our general contractor clients, to parsing through OCIP and CCIP placements sent to us by our broker colleagues, we’ve seen it all. Sometimes coverage can be a scary thing, so in honor of Halloween, here is our “Top 10 List of Scariest Insurance Policy Terms” we’ve seen over the past year.

1. Complete bodily injury exclusions. Especially in markets where subcontractor insurance costs are high and profit margins are low, subcontractor policies contain bodily injury exclusions for employees at an alarming rate. Exclusions this broad can mean no coverage when an injured employee brings a claim against an additional insured, thereby exposing the additional insured’s corporate program to a loss which otherwise should be transferred downstream.

Ms. Guertin may be contacted at tag@sdvlaw.com


Parametric Insurance: Mitigating Risk From Weather-related Events

November 28, 2018
Paul Ramiz & Michael DeLio - Construction Executive

In the last three years there have been record-breaking extreme weather events, changing seasonality, increases in temperature and rainfall and overall greater volatility globally. This specifically has created a challenge for the U.S. construction industry, which after a slight decline in construction spending in 2017 is expected to have six percent growth in 2018 and will to continue to grow through 2021. The recent increase in construction spending and expected projects to come has allowed the insurance and wider financial services sector to offer increasingly tailored solutions that allow both owners and operators of construction projects to manage the financial impact of adverse weather on revenues and costs.

Reprinted courtesy of Paul Ramiz & Michael DeLio, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.


How To Make Sure Your Subs Can Finish The Work

November 21, 2018
Kenneth Rubinstein - Engineering-News Record

Earlier this month, a subcontractor default insurance company filed suit against an electrical subcontractor in New York state court. The claim: a $12.8 million loss caused by the subcontractor’s admitted failure to complete electrical work under a subcontract at the Whitney Museum of American Art in Manhattan.

Mr. Rubenstein may be contacted at KRubinstein@Preti.com


Requiring Approval of All Insureds and Mortgagees To Assign Policy Upheld by Florida Court

November 14, 2018
Tred R. Eyerly - Insurance Law Hawaii

The Florida Court of Appeal upheld an assignment of benefits provision that required signatures of all insureds and mortgagees. Restoration 1 of Port St. Lucie v. Ark Royal Ins. Co., 2018 Fla. App. LEXIS 12633 (Fla. Ct. App. Sept. 5, 2018).

Ark Royal issued a homeowner's policy to the insureds. The policy stated that "[n]o assignment of claim benefits, regardless of whether made before a loss or after a loss, shall be valid without the written consent of the insureds, and all mortgagee(s) named in this policy."

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


Insurance Bad Faith And Consumer Protection Act Claims Against Individual Insurance Adjusters Deemed Valid

November 6, 2018
Ceslie Blass - Ahlers Cressman & Sleight PLLC Blog

The Washington State Court of Appeals has further tipped the scales in favor of insureds in insurance bad faith and Consumer Protection Act (CPA) litigation. The Court of Appeals held in Keodalah v. Allstate Ins. Co.[1], that (1) RCW 48.01.030 imposes a duty of good faith on “all persons” engaged in the business of insurance, and (2) the CPA does not require a contractual relationship to exist between the parties in order for a claim to be valid. In other words, bad faith and CPA claims against an individual insurance adjuster will be viable.

Ms. Blass may be contacted at ceslie.blass@acslawyers.com


“Crypto-Property:” Ohio Court Says Crypto-Currency is Personal Property Under Homeowners’ Policy

October 30, 2018
Michael S. Levine - Hunton Insurance Recovery Blog

In what appears to be a case of first impression, an Ohio trial court ruled in Kimmelman v. Wayne Insurance Group, that the crypto-currency, Bitcoin, constitutes personal property in the context of a first-party homeowners’ insurance policy and, therefore, its theft would not be subject to the policy’s $200 sublimit for loss of “money.”

Mr. Levine may be contacted at mlevine@HuntonAK.com


Denial of Coverage for Late Notice Upheld

October 23, 2018
Tred R. Eyerly - Insurance Law Hawaii

The insurer's denial of coverage for receipt of late notice of a claim was upheld by the federal district court. Evanston Ins. Co. v. Yeager Painting, LLC, 2018 U.S. Dist. LEXIS 130316 (N.D. Ala. Aug. 3, 2018).

Yeager Painting was in the business of sandblasting and painting. Yeager Painting was hired as a subcontractor to sandblast water tanks in the city of Pelham, Alabama. Yeager Painting subcontracted the work to Delgado Painting. An employee of Delgado Painting was seriously injued when he fell 25 to 30 feet to the ground from a man-lift basket.

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



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