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

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

Florida Supreme Court Holds That Insurer Has Standing to Maintain Legal Malpractice Action Against Retained Defense Counsel

August 4, 2021
Lauren S. Curtis & Ashley Kellgren - Traub Lieberman Insurance Law Blog

In Arch Ins. Co. v. Kubicki Draper, LLP, SC19-673, 2021 WL 2232083 (Fla. June 3, 2021) the Florida Supreme Court held that an insurer has standing to maintain a legal malpractice action against retained defense counsel based on contractual subrogation rights.

Arch Insurance Company (“Arch”) insured an accounting firm that was sued by a client for accounting malpractice. The lawsuit gave rise to a claim under the accounting firm’s professional liability insurance policy with Arch. Under the policy, Arch had a duty to defend and retained counsel to defend the accounting firm. Just before trial, the accounting malpractice lawsuit settled within the policy limits for $3.5 million.

Reprinted courtesy of Lauren S. Curtis, Traub Lieberman and Ashley Kellgren, Traub Lieberman
Ms. Curtis may be contacted at lcurtis@tlsslaw.com
Ms. Kellgren may be contacted at akellgren@tlsslaw.com

New Hampshire Court Finds Hoteliers Sustained Covered COVID-19 BI Loss

July 25, 2021
Jonathan O. Aihie & Michael S. Levine - Hunton Insurance Recovery Blog

On Tuesday, a New Hampshire trial court awarded summary judgment to the owner of scores of hotels after finding that the hotels sustained covered “physical loss of or damage to” insured property caused by the pandemic presence of COVID-19 and its viral agent, SARS-CoV-2. The merits ruling is yet another recent victory for policyholders who continue to make headway against an early wave of insurance company dismissals, most of which, unlike the ruling on Tuesday, never considered evidence in support of their decisions.

Reprinted courtesy of Jonathan O. Aihie, Hunton Andrews Kurth and Michael S. Levine, Hunton Andrews Kurth
Mr. Aihie may be contacted at jaihie@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com

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 te@hawaiilawyer.com

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 te@hawaiilawyer.com

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 koche@whiteandwilliams.com
Mr. Yelin may be contacted at yelinf@whiteandwilliams.com

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 cappsg@whiteandwilliams.com
Mr. Rush may be contacted at rushd@whiteandwilliams.com

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 te@hawaiilawyer.com

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 sgonzalez@wwhgd.com
Mr. Cohn may be contacted at acohn@wwhgd.com

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 fortescuej@whiteandwilliams.com
Mr. Blacker may be contacted at blackera@whiteandwilliams.com

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 te@hawaiilawyer.com

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 te@hawaiilawyer.com

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 Sarah.Rubin@lewisbrisbois.com

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 mlevine@HuntonAK.com

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 nac@paynefears.com

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


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