Checklist: What to Know About Wildfire Insurance Coverage

January 17, 2022
Rebecca R. Nelson - Saxe Doernberger & Vita

California, and the greater Western United States, have experienced devastating wildfires over the last ten years. Not only are the fires more destructive than in years past, but they are also no longer constrained to specific seasons. Because one of the effects of climate change is a drier and hotter climate in the West, California is susceptible to fires year-round. This means that it is increasingly a matter of when, not if, your home or business may be susceptible to a wildfire, and knowledge of wildfire insurance coverage can be helpful when making important decisions.

Ms. Nelson may be contacted at RNelson@sdvlaw.com


Delaware Superior Court Finds Pollution Exclusion Precludes Coverage for COVID-Related Claims

January 10, 2022
John D. Balaguer, Timothy S. Martin & Daryll Hawthorne-Searight - White and Williams

The Delaware Superior Court recently dismissed an amusement park operator’s bid for property damage insurance coverage for COVID-19 related losses. Judge Abigail M. LeGrow granted HDI Global Insurance Company’s (HDI) motion to dismiss the complaint filed by APX Operating Company LLC (APX), the operator of six entertainment properties and two waterparks in California, Florida and New Jersey (Insured Properties), that sought coverage for lost revenue and profits when the properties were shut down for a period of time as a result of the COVID-19 pandemic, and once reopened were forced to operate at reduced capacity. The court’s decision side-stepped the question of whether the presence of SARS-CoV-2 virions on the properties were “direct physical loss or damage,” triggering coverage under the policy, but nevertheless found that there was no coverage for the claimed losses based on the policy’s Pollution and Contamination Exclusion.

Reprinted courtesy of John D. Balaguer, White and Williams, Timothy S. Martin, White and Williams and Daryll Hawthorne-Searight, White and Williams
Mr. Balaguer may be contacted at balaguerj@whiteandwilliams.com
Mr. Martin may be contacted at martint@whiteandwilliams.com
Ms. Hawthorne-Searight may be contacted at hawthorned@whiteandwilliams.com


California Court of Appeal Shoots Down COVID-19 Business Interruption Claim

January 3, 2022
Tred R. Eyerly - Insurance Law Hawaii

The California Court of Appeal affirmed the trial court's dismissal of the insured's business interruption claim based upon COVID-19 government shutdown orders. The Inns by the Sea v. California Mut. Ins. Co., 2021 Cal. App. LEXIS 956 (Calif. Ct. App. Nov. 15, 2021). The Inns is the first state appellate court decision in the country on coverage for COVID-19 claims.

The case presented an issue of first impression for a California appellate court: did a property policy provide coverage for business loss of income due to the COVID-19 pandemic?

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


Project Running Late? Don't Be Shocked When Trying to Extend the Insurance Coverage

December 27, 2021
Richard Korman - Engineering News-Record

The three-year-old hard construction market has boosted prices and trimmed coverage terms and limits. It also has turned what had been a fairly routine practice—obtaining extensions of policies to cover projects that drag out longer than anticipated—into a more complex negotiation.

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


Insurance Industry Adoption of Environmental, Social and Governance Practices Driven By Long-Term Climate Change, Says GlobalData

December 20, 2021
GlobalData

Environmental, social and governance (ESG) practices have become more than a buzzword, with businesses across all market sectors including the insurance sector, making efforts to adopt and integrate ESG practices into their day to day operations, says GlobalData, a leading data and analytics company.

A recent GlobalData insurance industry poll revealed that most respondents (21.6%) believed that managing the long-term risks of climate change is the main driver for the adoption and integration of ESG practices in the insurance sector. A slightly lower proportion of respondents 20.2% cited that the incorporation of such practices was already a key part of their company's values and ethics and a further 19.2% of respondents felt that ESG provided an opportunity for insurance businesses to differentiate themselves from the competition.

Beatriz Benito, Senior Insurance Analyst at GlobalData, comments: "The insurance industry faces a future of escalating costs and the consequence of ever-increasing severe weather events and natural disasters, which will only worsen with climate change. An increasing volume of claims – more often than not associated with big payouts – will eventually make some areas of land uninsurable.''


Brightway Insurance Executives Earn National Recognition as Top Leaders in the Industry

December 13, 2021
Brightway Insurance, Inc.

JACKSONVILLE, FLA. (DEC. 6, 2021) — Insurance Business America unveiled its annual Hot 100 list, and two executives from Brightway Insurance—Chief Technology Officer, Bob Hitchcock, and Chief of Staff, Leslie Wright—are among the 100 industry leaders named to the prestigious list of industry leaders.

Brightway President and CEO, Michael Miller, said: "Leslie and Bob are two key leaders who have had direct impact on making our company successful, and we are thrilled to see them nationally recognized as industry leaders."

About Brightway Insurance
Brightway Insurance is a national property/casualty insurance distribution company with more than $875 million in annualized written premium, making it one of the largest Personal Lines agencies in the U.S.


Auto-Owners Ins. Co. v. Bolt Factory Lofts Owners Ass’n (Colorado)

December 6, 2021
Ryan Gill - Lewis Brisbois

The Colorado Supreme Court recently determined that an insurer defending under a reservation of rights has the right to intervene in the litigation after its insured assigns its rights to bad faith claims against the insurer. Auto-Owners Ins. Co. v. Bolt Factory Lofts Owners Ass’n, 2021 CO 32, 487 P.3d 276.

In the underlying Bolt Factory litigation, the insurer defended its insured in construction defect litigation, subject to a complete reservation of rights. The insurer rejected a settlement offer that was within its insured’s policy limits. The insured retained independent counsel and negotiated an agreement whereby the insured assigned its claims against the insurer to the plaintiff in exchange for the plaintiff’s agreement not to execute the judgment against the insured. This type of agreement is known as a Nunn agreement, permitted by the court’s prior decision in Nunn v. Mid-Century Ins. Co., 244 P.3d 116 (Colo. 2010). However, unlike Nunn, the parties in Bolt Factory did not enter into a stipulated judgment, choosing instead to proceed with an uncontested trial to determine liability and the amount of damages.

Mr. Gill may be contacted at Ryan.Gill@lewisbrisbois.com


For All of Modular Construction’s Appeal, Beware of Risks and Insurance Complications

November 29, 2021
Kirk Chamberlain - Construction Executive

There are good reasons modular and prefabricated construction has been undergoing a low-velocity explosion for the last decade.

Quality is boosted when components from plumbing to wall panels to entire rooms are assembled in a controlled environment versus onsite. Safety is improved as controlled conditions cut down on slips, falls and other risks on a jobsite exposed to the elements. Productivity gains of 30% to 50% are a factor too, given the greater output possible for the same man hour as traditional construction. And modular construction delivers on sustainability as there is less materials waste.

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


Court Finds Possible Sliver of Coverage for COVID-19 Claim

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

The court granted the insurer's motion for judgment on the pleadings, in part, but left the door open for the insured to pursue claims under two provisions in the policy. Monarch Casino & Resort v. Affiliated FM Ins. Co., 2021 U.S. Dist. LEXIS 179812 (D. Colo. Sept. 17, 2021).

Monarch owned a casinos in Reno, Nevada and Black Hawk, Colorado. Monarch submitted a claim to its insurer, Affiliated, for business interruption losses due to COVID-19. Monarch alleged that it incurred business interruption losses of between $7,500,000 and $12,500,000 a month due to COVID-19 and the attendant executive orders directing the closure of the two casinos.

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


AXA XL Recognizes Three Contractors For Pioneering Tech Adoption

November 15, 2021
Aarni Heiskanen - AEC Business

AXA XL’s Construction insurance business recognizes three contractors for pioneering implementation of risk-reducing technologies and achieving the highest scores in its Technology Adoption Maturity Index (TAMI) scorers for 2021. Boston-based, national builder Suffolk and Jacksonville, Florida-based Haskell received silver honors for their tied score, while PCL Construction, based in Edmonton, Canada, received gold honors for receiving the TAMI’s highest score in 2021.

TAMI is a proprietary benchmarking service to help contractors measure their tech usage against an industry index and their peers to determine optimal investment in new construction technologies.

Mr. Heiskanen may be contacted at aec-business@aepartners.fi


Insurance Rates: What to Expect in 2022

November 8, 2021
Jeffrey Cavignac - Construction Executive

“It was the best of times, it was the worst of times.”

While the coronavirus has turned the world upside down, the economy has remained surprisingly robust. The construction industry is reflective of this. Many construction companies had great years in 2020, and 2021 is trending positive as well. While pipelines may not be full, they for the most part are adequate or better. The biggest challenges many construction companies have is finding people to run the jobs they have.

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


Mitigate the Crisis of Unskilled Construction Workers

November 1, 2021
Martin Mick - Construction Executive

As construction projects pick up in a late COVID-19 market, the industry is facing challenges from every corner. There are labor shortages, rising costs and supply chain woes resulting in razor thin margins and an increase in unskilled workers on jobsites. The Biden administration’s infrastructure bill will further stress insurance capacity and an already-tight market for construction personnel.

In a recent Insurance Journal story, Gary Kaplan, the president of construction at AXA XL, said that unskilled workers have now become number-one cause for subcontractor default insurance claims. Docutrax, an insurance verification and tracking company, analyzed a pool of 5,200 subcontractor insurance coverages and found only 18% supplied their general contractors with evidence their insurance complied with the terms of their contract with the general contractor.

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


Portion of COVID-19 Claim Survives Motion to Dismiss

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

While the insured failed to demonstrate direct physical loss, Crisis Event coverage was still possible. SJP Investment Partners LLC v. Cincinnati Insurance Company, 2021 U.S. Dist. LEXIS 162612 (N.D. Ala. Aug. 27, 2021).

The insured owned a hotel in Birmingham. The state's public health orders limited operations and caused temporarily closures due to the pandemic. COVID-19 was present in the hotel on a least one occasion. In mid-February 2020, a previous guest informed the hotel that she had contracted the virus and subsequently two hotel employees tested positive for the virus.

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


Viewpoint: Adjusting to the ‘Post-Truth’ Environment Driving Up Insurance Claims Costs

October 18, 2021
Michael Germano - Engineering News-Record

Social Inflation is a term insurers are using to describe increasing insurance losses. It is fueled by societal instability and appeals to emotion and fear, which cause higher jury awards, larger settlements and the inevitable result—more litigation.

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


Hurricane Ida Could Cost Insurers as Much as $30 Billion, Swiss Re Says

October 11, 2021
Christian Baumgaertel - Bloomberg

The insurance industry could face claims of as much as $30 billion from hurricane Ida, which caused extreme wind and flood damage across parts of the U.S. after making landfall in late August.

Insured losses from the storm, the second-most intense hurricane to hit the state of Louisiana, will probably range between $28 million and $30 million, the reinsurer said in a statement Tuesday. It estimated its own cost from claims related to the storm at about $750 million.


Vermont and New Hampshire Request $7M+ in Federal Disaster Relief for Infrastructure Storm Damage

October 4, 2021
Johanna Knapschaefer - Engineering News-Record

Vermont and New Hampshire have requested more than $7 million in federal disaster relief from the Biden Administration for major infrastructure damage that resulted from a severe storm and flood event in late July and early August.

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


Personal Liability for Unpaid Industrial Insurance Premiums

September 29, 2021
Cameron Sheldon - Ahlers Cressman & Sleight PLLC

In March 2021, the Washington State Court of Appeals, Division One, issued an opinion holding corporate officers personally liable for unpaid industrial insurance premiums. Coaker v. Washington State Dep’t of Lab. & Indus., 16 Wn. App. 2d 923, 484 P.3d 1265 (2021).

Mike and Marilee Coaker (collectively “the Coakers”) founded Mike’s Roofing in 1988. In 2012, the Department of Labor and Industries (L&I) imposed an assessment for unpaid industrial insurance premiums on the Coakers’ construction business. The assessment ultimately forced Mike’s Roofing out of business in 2015.

Ms. Sheldon may be contacted at cameron.sheldon@acslawyers.com


Understanding Builder's Risk Insurance Coverages and Exclusions

September 20, 2021
Erin Rotz - Construction Executive

With all the questions a builder may have for a developer, architect, designer and property owner, there are some inquiries that should be addressed first to help identify and understand any climate, accidental and unforeseen risks to a project. Understanding the type of protections builders should consider before starting a job can make all the difference in the success of a project and make sure the right insurance protection is in place.

Builders should consider all the exposures before purchasing coverage though. It is important to do an inventory of all the specific project’s exposures at different phases of the project, including those at the construction site, in transit or at a temporary storage site. A builder may choose to get broad protection for property of all kinds at all locations or narrow coverage to a specific property and risks. Regardless of the level chosen, a builder will need to review the policy to mitigate any coverage gaps.

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

Ms. Rotz may be contacted at Erin.Rotz@thehartford.com


Travelers Marks National Suicide Prevention Week with New Resources for Contractors

September 13, 2021
Travelers

HARTFORD, Conn.--(BUSINESS WIRE)-- In recognition of National Suicide Prevention Week, The Travelers Companies, Inc. (NYSE: TRV) today released a new white paper and Risk Control eGUIDE designed to help contractors assess and implement suicide-in-construction awareness programs.

Travelers is also supporting the Construction Industry Alliance for Suicide Prevention (CIASP) and its goal of creating a zero-suicide industry. Construction companies can access CIASP’s trainings, posters, toolbox talks and self-assessments free of charge to help them evaluate their mental health and suicide prevention preparedness.

To review these resources, please visit the Suicide in the Construction Industry and Suicide and the Construction Worker webpages on Travelers.com.


Senate-Passed Infrastructure Bill Would Give Disaster Resilience Loan Fund $500 Million

September 6, 2021
Annemarie Mannion - Engineering News-Record

The $1.2-trillion infrastructure bill recently approved by the U.S. Senate includes $500 million for a revolving loan fund created earlier this year that would allow cities and other municipalities nationwide to pay for projects that improve resiliency against floods, hurricanes and other natural disasters.

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


Lifting and Related Injuries Now Second on Workers' Compensation Cost List

August 30, 2021
Richard Korman - Engineering News-Record

One perennial cause of why construction workers get hurt on the job—lifting, pushing or pulling things—has risen to second place in one major insurer's latest ranking of most costly injuries. They account for about one out of five dollars of construction-related workers' compensation claims, or $2.21 billion.

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


Insurer’s “Unfair Competition” Exclusion Defense to Product Liability Suit Overcooked, For Now, As Pressure Cooker Manufacturer’s Insurance Claim Proceeds

August 23, 2021
Geoffrey B. Fehling - Hunton Insurance Recovery Blog

A California federal district court recently denied an insurer’s motion to dismiss a manufacturer’s insurance coverage suit on the grounds that an “unfair competition” exclusion barred coverage for a suit that alleged violations of the Colorado Consumer Protection Act. The court allowed the suit to proceed because the exclusion did not clearly, explicitly, and unambiguously apply to the product liability suit alleged against the manufacturer. The decision in Arovast Corporation v. Great American E&S Insurance Co., No. SACV 21-596-CJC (C.D. Cal. Aug. 2, 2021) highlights the broad range of activities that can be found in “unfair competition,” “antitrust,” and similar exclusions and how they can be cited as grounds to deny coverage in a variety of contexts beyond the anti-competitive claims those labels may suggest to most policyholders.

Mr. Fehling may be contacted at gfehling@HuntonAK.com


First Federal Appellate Ruling on COVID-19 Goes to Insurers

August 16, 2021
Alan Packer - Newmeyer Dillion

The United States Court of Appeals for the 8th Circuit recently issued the first federal appellate court decision in the country on the issue of business interruption coverage for COVID-19 losses. In Oral Surgeons P.C. v. Cincinnati Insurance Company, No. 20-3211 (8th Cir. 2021) the 8th Circuit found under Iowa law that an oral surgery practice in Iowa was not entitled to business interruption coverage because it had failed to allege or demonstrate “physical loss” or “physical damage” to its premises.

Mr. Packer may be contacted at alan.packer@ndlf.com


What COVID-19 Taught Construction Companies About Insurance

August 10, 2021
Alan Packer - Construction Executive

There’s an ancient proverb that people learn only from their own mistakes. Otto von Bismarck said it better: “Only a fool learns from his own mistakes. The wise man learns from the mistakes of others.” As the construction industry collectively moves past the age of the novel coronavirus into what will hopefully be a new normal, in the aftermath there are lessons to be learned about how insurance programs operate, about unexpected gaps in coverage and about how huge risks that come out of left field can leave companies vulnerable.

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

Mr. Packer may be contacted at alan.packer@ndlf.com



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