Claims that COVID-19 Present on Property Survive Motion to Dismiss

July 19, 2021
Tred R. Eyerly - Insurance Law Hawaii

Plaintiffs successfully argued against a motion to dismiss by alleging COVID-19 was present on their premises and required repairs and alterations to their properties. Legacy Sports Barbershop LLC v. Cont'l Cas. Co., 2021 U.S. Dist. LEXIS 102545 (N. D. Ill. June 1, 2021).

Mr. Eyerly may be contacted at

Claim for Business Interruption Based on Government Orders Precluding Use of Property Survives Motion to Dismiss

July 11, 2021
Tred R. Eyerly - Insurance Law Hawaii

The court found that the insured hair salon and barbershop plausibly alleged an entitlement to coverage for lost business income when the government orders restricted use of the property as intended. Seifert v. IMT Ins. Co., 2021 U.S. Dist. LEXIS 103420 (D. Minn. June 2, 2021).

Plaintiff's business was ordered to close by two executive orders issued in response to the growing number of COVID-19 cases in Minnesota. The policy covered the loss of business income due to a "suspension of your 'operations' . . . caused by direct physical loss of or damage to property . . ." Plaintiff sought coverage for his business losses. IMT Insurance Company denied the claim. Plaintiff sued and IMT moved to dismiss. The motion was initially granted without prejudice and plaintiff filed an amended complaint.

Mr. Eyerly may be contacted at

New Jersey Law Requires Insurers to State Whether Business Interruption Policies Cover Global Virus Transmission, Pandemic Coverage

July 5, 2021
Edward M. Koch & Felix S. Yelin - White and Williams LLP

On May 12, 2021, New Jersey Governor Phil Murphy signed into law a bill requiring insurers to go on record as to whether their policies, which provide coverage for the loss of use and occupancy and business interruption, cover global virus transmission or pandemics. The law first requires an insurer to disclose to new and renewing insureds whether the policy provides such coverage. The Commissioner of Banking and Insurance prescribes the form and manner of providing this notice for this first provision. The law also requires any insurer who has in force such a policy to so inform its insured in writing (via mail or electronic means) within 30 days of the date of enactment.

Reprinted courtesy of Edward M. Koch, White and Williams LLP and Felix S. Yelin, White and Williams LLP
Mr. Koch may be contacted at
Mr. Yelin may be contacted at

How COVID Impacts Insurance in Unforeseen Ways

June 28, 2021
Gregory S. Capps & Daryn E. Rush - White and Williams LLP

Having recently marked the one-year anniversary of the COVID-19 pandemic, it seems like an opportune time to consider how the pandemic has impacted the insurance industry. While business interruption (BI) lawsuits (totaling more than 1,500 as of March 31, 2021) have dominated the headlines, the pandemic’s effects stretch far beyond BI claims. Indeed, the pandemic has impacted virtually all aspects of the industry and those impacts will likely alter the insurance landscape for years to come.

Reprinted courtesy of Gregory S. Capps, White and Williams LLP and Daryn E. Rush, White and Williams LLP

Mr. Capps may be contacted at
Mr. Rush may be contacted at

Hawaii Legislature Sends Three Insurance-Related Bills to the Governor

June 21, 2021
Tred R. Eyerly - Insurance Law Hawaii

The 2021 legislative session has adjourned with three insurance-related bills passed and sent to the governor. The bills are as follows:

SB1096 - The bill makes several additions to the Insurance Code, Chapter 431. It includes various consumer protections with regard to public adjusters. The bill requires contractual terms and disclosures, as well as granting a right to rescind. A standard of conduct is imposed on various entities, including limited line licensees. The bill also touches on motor vehicle rental companies, self-service storage, limited line licenses, and surplus line coverage.

Mr. Eyerly may be contacted at

Construction Site Injuries: Avoiding and Limiting Liability

June 14, 2021
Steven Gonzalez & Aaron Cohn - Construction Executive

Workplace injuries on construction sites are common occurrences. For large projects that span multiple years with deca-million dollar budgets, even contractors with the best safety practices can expect dozens of injuries and related incidents to be reported in a given year. Many more incidents will go unreported, either because the incident is not deemed significant enough, or for other reasons, including the immigration status of the injured.

Reprinted courtesy of Steven Gonzalez & Aaron Cohn, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Gonzalez may be contacted at
Mr. Cohn may be contacted at

Reinsurance Litigants May Need to Avoid Putting Their Faith in the Tort of Bad Faith

June 7, 2021
Justin K. Fortescue & Andrew L. Blacker - White and Williams LLP

In a recent Alabama federal court decision, aptly captioned Alabama Municipal Insurance Corporation v. Munich Reinsurance American, Inc.,[1] the plaintiff reinsured brought three counts of bad faith against the defendant reinsurer for failing to pay several claims totaling $1.9 million. The court granted the reinsurer’s motion to dismiss the bad faith counts concluding that Alabama does not recognize the tort of bad faith in the reinsurance context.

Reprinted courtesy of Justin K. Fortescue, White and Williams LLP and Andrew L. Blacker, White and Williams LLP

Mr. Fortescue may be contacted at
Mr. Blacker may be contacted at

California Federal District Court Denies, in Part, Insurer's Motion to Dismiss COVID-19 Business Interruption Claim

May 31, 2021
Tred R. Eyerly - Insurance Law Hawaii

In another victory for policy holders on business interruption claims arising from COVID-19, the federal district court denied the insurer's motion to dismiss on one of two claims. Kingray Inc. v. Farmers Group Inc., et al., 2021 U.S. Dist. LEXIS 41300 (C. D. Cal. March 4, 2021).

Plaintiff Kingray Inc., who operated a sports bar and grill, and Plaintiff Nora's Style Salon, Inc. filed suit against Farmers when business interruption coverage was denied under plaintiffs' all risk policies. Government shut-down orders at the beginning of the COVID-19 pandemic caused plaintiffs to suffer loss of business income.

Mr. Eyerly may be contacted at

Illinois Federal District Court Finds Duty to Defend COVID-19 Claim

May 24, 2021
Tred R. Eyerly - Insurance Law Hawaii

The federal district court found that the insurer had a duty to defend the underlying suit based on damages allegedly arising from exposure to COVID-19. McDonald's Corp. v. Austin Mutual Ins. Co., No. 20 C 5057, Order (N.D. Ill. Feb.22, 2021). The decision is here.

Mr. Eyerly may be contacted at

Construction’s Road Through 2021 Will Have Bumps—But Not Insurmountable Ones

May 17, 2021
Kirk Chamberlain & Craig Tappel - Construction Executive

After years of going full-throttle, the U.S. construction industry has been contending with various pandemic-induced bumps in the road that will continue to slow business down and challenge how much resiliency can be mustered for the recovery ahead.

It’s a tough environment to deal with. While there was room for caution after eight booming years in construction spending, the pandemic’s massive disruption has altered the economics of working safely, on time and on budget. The aftereffects are carrying into 2021 as the recovery begins.

Reprinted courtesy of Kirk Chamberlain & Craig Tappel, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

New York’s App. Div., Second Dept. Addresses Policy Exhaustion Issue, But Doesn’t Resolve Lower Court Split

May 10, 2021
Sarah Rubin - Lewis Brisbois

New York’s Appellate Division, Second Department recently issued a decision in Alleviation Medical Svcs. v. Allstate Ins. Co., 2021 N.Y. Slip Op. 08159 (App. Div., 2nd Dept. 2/24/21), which was anticipated to specifically address the issue of whether an insurer would be required to pay in excess of the $50,000 policy limit if a court or arbitrator determined that a previously denied claim should have been paid. In New York, the Appellate Division is a higher court than the Appellate Term and, thus, its decisions take precedence over Appellate Term decisions.

Ms. Rubin may be contacted at

Fancier Homes Mean Higher Insurance Premiums Under New Flood System

May 3, 2021
Leslie Kaufman - Bloomberg

The Federal Emergency Management Agency on Friday unveiled the details of an overhaul to its beleaguered National Flood Insurance Program, the initiative’s first major update in 50 years. Most homeowners in the program will have lower or stable premiums, but roughly 11% of homes—largely the highest value ones—will see increases in premiums of at least $10 a month. Those could continue to rise until they reach a cap of $12,000 a year.

Factory Mutual’s “Contamination” Exclusion Is Ambiguous; May Not Limit Coverage For COVID-19 Business Interruption Loss

April 26, 2021
Michael S. Levine - Hunton Andrews Kurth

On Wednesday, a federal judge in New York denied FM’s Rule 12(c) motion for judgment on the pleadings after finding the Contamination Exclusion in the Factory Mutual policy to be ambiguous as to whether it bars coverage for business interruption losses resulting from communicable disease. The case is Thor Equities, LLC v. Factory Mutual Ins. Co., No. 20 Civ. 3380 (AT) (SDNY). This is a critical decision under the Factory Mutual policy form, which is substantively the same as policies issued by Factory Mutual’s sister company, Affiliated FM Insurance Company. Factory Mutual and Affiliated FM have maintained that the contamination coverages are “exceptions” to this exclusion, with the exclusion precluding coverage for communicable disease loss under other policy coverages. But the ruling validates what policyholders have been arguing – that communicable disease “loss” is covered throughout the Factory Mutual policy, in addition to under the sublimited communicable disease emergency response coverages.

Mr. Levine may be contacted at

COVID Insurance Coverage, One Year Later – Herd Immunity for Insurers or is Coverage Spreading for Policyholders?

April 19, 2021
Nathan A. Cazier - Payne & Fears

One year ago, when the COVID-19 pandemic ground the world to a halt, our firm’s virtual offices were inundated with calls from policyholders, asking if their current and projected losses due to the pandemic would be covered by insurance. While the outlook wasn’t great, we made a few predictions about where coverage might be found, how we expected coverage to ultimately be decided, and instructed clients how to make and protect their COVID-related claims for coverage.

One year later, it’s instructive to look at how these predictions played out, and what we’ve learned so far. These insights will help policyholders more intelligently decide whether to pursue coverage for losses sustained because of the pandemic.

Mr. Cazier may be contacted at

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
Mr. Nelson may be contacted at

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
Ms. Giagnorio may be contacted at

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

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

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

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
Ms. Hudgins may be contacted at

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
Mr. Silk-Eglit may be contacted at

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
Mr. Fehling may be contacted at

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

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.


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