Construction Insurance News

No Coverage Defenses After Two-Year Delay to Appear In Declaratory Judgment Action

February 15, 2018
Tred R. Eyerly – Insurance Law Hawaii

The federal district court found that the insurer was estopped from asserting coverage defenses after taking no action for two years before appearing in a declaratory judgment action filed by the insured. Sentinel Ins. Co. v. Walsh Constr. Co., 2018 U.S. Dist. LEXIS 6487 (N.D. Ill. Jan. 16, 2018).

Walsh Construction Company was the general contractor on a construction project to alter the streets and train tracks in Chicago. James Quigley, an iron worker for subcontractor S&J Construction Company, was crushed by a steel post. His estate filed suit against Central Contractors Service, Inc., the subcontractor that was operating the crane from which the steel post was suspended at the time of the accident, and Walsh. The complaint alleged that Walsh coordinated the work being done and designated various work methods and schedules for the project.

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


Negligent Misrepresentation Not Covered by Homeowner's Policy

February 7, 2018
Tred R. Eyerly – Insurance Law Hawaii

The seller's alleged negligent misrepresentation about the condition of the house was not covered by the homeowner's and umbrella policies. Allstate Ins. Co. v. Swaminathan, 2017 U.S. Dist. LEXIS 211931 (D. Conn. Dec. 27, 2017).

The insureds owned a home insured by Allstate under both a homeowner's and umbrella policy. They sold the house to Kristin Cole. Thereafter, Cole discovered that concrete in the home had been deteriorating for years and would need to be replaced.

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


Insureds Survive Broker's Motion to Dismiss

January 31, 2018
Tred R. Eyerly – Insurance Law Hawaii

The insureds survived their broker's motion to dismiss their claims for negligent procurement of insurance. Thanoukos v. Kita, 2017 Ill. App. Unpub. LEXIS 2684 (Ill Ct. App. Dec. 19, 2017).

The insureds purchased homeowners insurance through their broker. When they sustained water back-up damage in their home due to a sump pump failure after an electrical outage, their insurer, Allstate denied the claim. The policy excluded damage for floods and back up water due to sump pump failure.

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


Lost Cattle and Milk Production Constitute Valid Claim Under Policy

January 24, 2018
Tred R. Eyerly – Insurance Law Hawaii

The insureds' claim for loss of cattle and lost milk production was covered under the policy. Chatelain v. Country Mut. Ins. Co., 2017 U.S. Dist. LEXIS 206621 (D. Or. Dec. 15, 2017).

The insureds leased their dairy farm to the Brauns. At the time of the lease, the dairy farm had 230 milking cows, 166 heifers, two bulls, and all equipment necessary to operate a dairy. The Brauns violated their lease in November 2013, and the insureds moved back on the farm. On December 20, 2013, the first time milking their cows after returning to the farm, the insureds noticed that 113 milking cows and 100 heifers were missing. They also noticed that several pieces of equipment were missing and that substantial damage had been done to the farm.

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


Gunshot Wound Covered When Not Expected or Intended

January 10, 2018
Tred R. Eyerly – Insurance Law Hawaii

The court reversed the trial court, finding there was an occurrence when injury occurred from a gun wound resulting from a fight. Erie Ins. Exh. v. Moore, 2017 Pa. Super. LEXIS 957 (Pa. Super. Ct. Nov. 22, 2017).

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


Construction Defect Claim Not Covered

January 5, 2018
Tred R. Eyerly – Insurance Law Hawaii

The insured general contractor was not covered for alleged faulty workmanship in constructing a home. Allstate Ins. Co. v. Luu, 2017 U.S. Dist. LEXIS 190983 (N.D. Ga. Nov. 17, 2017).

Luu, the homeowner, contracted with Diamond for the purchase of a lot and building of a new home. After the closing and construction, Luu noticed a number of alleged code violations on the property and began having problems with the house. Diamond denied liability, claiming Luu purchased the home "as is." Luu filed suit.

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


SoftBank Leads $120 Million Funding in Fintech Startup Lemonade

December 20, 2017
Julie Verhage - Bloomberg

SoftBank Group Corp. is betting that technology can overhaul the home insurance industry by leading a $120 million round in Lemonade Inc.

The New York-based startup, which uses artificial intelligence and bots to minimize paperwork and speed up the claims process for renters and homeowners, had raised $60 million before Tuesday’s announcement. Previous backers included General Catalyst, Alphabet Inc.’s GV and Sequoia Capital. While the firm isn’t disclosing its valuation, people familiar with the matter said it will be more than $500 million, up from the previous round.


Insurer Has Duty to Indemnify But No Duty to Defend

December 1, 2017
Tred R. Eyerly - Insurance Law Hawaii

The court found that the insurer was obligated to indemnify, but not to defend the insured. Old Republic Ins. Co. v. Kenny Constr. Co., 2017 U.S. Dist. LEXIS 189412 (N.D. Ill. Oct. 31, 2017).

Kenny Construction Company was hired by the Army Corp of Engineers to work on the Chicago Deep Tunnel flood control project. Kenny hired Meccon Industries, Inc. as a subcontractor to perform mechanical work and furnish materials for the project. The subcontract required Meccon to provide coverage for the contractor and any other additional insureds as required on the Insurance Requirement Sheet attached to the contract. Neither party was able to produce the Insurance Requirement Sheet.

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


House Passes Bill to Renew Flood Insurance Program

November 15, 2017
Associated Press – Engineering News-Record

WASHINGTON (AP) — The House on Tuesday backed legislation that will increase flood insurance premiums for many property owners to help firm up a program under stress from ever-more frequent and powerful storms.

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


NAIC Passes Insurance Data Security Model Law: What Insurers and Brokers Can Expect

November 8, 2017
Joshua Mooney & Laura Schmidt – White and Williams LLP

On October 24, 2017, the National Association of Insurance Commissioners (NAIC) passed its Insurance Data Security Model Law, intended to serve as model legislation for states to enact in order to govern cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws (defined therein as Licensees).

Reprinted courtesy of Joshua Mooney, White and Williams LLP and Laura Schmidt, White and Williams LLP
Mr. Mooney may be contacted at mooneyj@whiteandwilliams.com
Ms. Schmidt may be contacted at schmidtl@whiteandwilliams.com


Trump Signs $36.5B Disaster-Relief Bill

November 2, 2017
Tom Ichniowski - Engineering News-Record

Enactment of a second major post-disaster aid measure provides billions of dollars in additional funds to help Puerto Rico and other areas recover from recent natural disasters. But it probably won’t be the last such funding package this year.

Mr. Ichniowski may be contacted at ichniowskit@enr.com


Why an Insurer Denied a Claim For a Storm-Battered Crane

October 26, 2017
Scott Van Voorhis - Engineering News-Record

More than four years after Superstorm Sandy mangled a tower crane in New York City, attorneys for a developer, a construction manager and Zurich American Insurance Co. took their places in a courtroom in Albany last winter to argue before a panel of judges, the last appeal in an improbable lawsuit involving the crane. Although equipment and tools are not covered by a builders-risk policy, the developer and CM were trying to collect a payout for the crane damage at the 74-story One 57 luxury condominium tower in New York City.

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


Trump Wants to Curtail Flood Insurance in Flood-Prone Areas

October 19, 2017
Christopher Flavelle - Bloomberg

President Donald Trump proposed ending federal flood insurance for new homes in areas most at risk of flooding, a change that could curtail new construction in vast parts of Florida, Louisiana and along the Eastern Seaboard.

Trump’s plan would radically overhaul the program created in 1968 to help protect homeowners who live along coasts or near rivers. The idea, sent by the White House to Congress, created an unlikely set of responses: Home builders warned it could stifle the economy while climate activists, who have battled Trump, called the idea smart.


Obligations Under Indemnity Provision and Providing Insurance Coverage Separate

October 11, 2017
Tred R. Eyerly - Insurance Law Hawaii

The Fifth Circuit construed a contract requiring indemnity and an obligation to provide insurance coverage as creating separate duties. ExxonMobil Corp. v. Elec. Reliability Services, 2017 U.S. App. LEXIS 16031 (5th Cir. Aug. 22, 2017).

Exxon contracted with Electrical Reliability Services (ERS) to perform electrical work and services at Exxon's chemical facility in Beaumont, Texas. The contract included indemnity and insurance provisions. The indemnity provision required that each party indemnify the other from third party claims resulting from the first party's negligence. The insurance provisions required ERS to purchase CGL and other types of insurance, and to name Exxon as an additional insured.

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


Claim Made During Second Consecutive Policy Period Properly Denied

September 28, 2017
Tred R. Eyerly - Insurance Law Hawaii

The court found that the insurer properly denied a claim made under the claims-made policy during the second policy period when the incident occurred during the first policy period. Alaska Interstate Constr. v. Crum & Forster Specialty Ins. Co., 2017 U.S. App. LEXIS 15997 (9th Cir. Aug. 22, 2017).

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


SBA Institutes Changes in Surety-Bond Guarantee Program

September 20, 2017
Tom Ichniowski - Engineering News-Record

The Small Business Administration has made changes in its surety bond guaranty program that industry officials say will benefit small construction firms.

Mr. Ichniowski may be contacted at ichniowskit@enr.com


Hurricanes Highlight Failure to Enforce Flood Insurance Rules

September 14, 2017
Christopher Flavelle - Bloomberg

As the floodwaters of Hurricanes Harvey and Irma recede, they may reveal more than moldy drywall and fetid trash. They could lay bare the federal government’s failure to police a basic tenet of its own disaster policy: that properties with government-backed mortgages in risky areas carry flood insurance.

The government has known for decades that homeowners in flood zones often don’t have the insurance they should. Just two years ago, the Federal Emergency Management Agency estimated that as few as half of the 1.5 million residential structures required to carry flood insurance actually do. It can’t be sure, though: FEMA isn’t responsible for tracking that kind of data—nor is any other agency.


After Hurricane Harvey, What Will Your Builders' Risk Policy Pay For?

September 7, 2017
Scott Van Voorhis - Engineering News-Record

In the wake of the massive destruction wrought by Harvey, details tucked away in builders’ risk policies may spell the difference between financial relief and hardship for some contractors.

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


Harvey May Be Among the World’s Costliest Recent Catastrophes

August 30, 2017
Laurie Meisler & Yvette Romero – Bloomberg

With Hurricane Harvey continuing to wreak havoc along the Gulf Coast, its full economic impact is still unclear. Risk-modeling company RMS estimates $70 billion to $90 billion in losses from wind, storm surge and flood damage, most of it in the Houston metropolitan area. That would make the storm among the world’s most costly catastrophes since at least 1970. And this is happening in what was considered a few short weeks ago as a fairly tame weather year. According to Swiss Re, total economic losses from disasters were $44 billion in the first half of 2017, down 62 percent from the first half in 2016. The biggest losses were from thunderstorms, and more than half of the $44 billion was insured. Although forecasters are reluctant to estimate how much of Harvey’s damage insurers might pay, Chuck Watson, a disaster modeler with Enki Research, puts the figure at about 27 percent, far less than the 47 percent paid out for Hurricane Katrina.

Reprinted courtesy of Laurie Meisler, Bloomberg and Yvette Romero, Bloomberg


Viewpoint: Making the Case for Firms to Buy Terrorism Insurance

August 24, 2017
Kent W. Collier - Engineering News-Record

It’s only a matter of time before a terrorist again targets American infrastructure for a deadly act of violence. We have seen attacks across Europe—at airports, on pedestrian avenues and atop bridges. When such a tragedy eventually reoccurs in the U.S., the victims and their survivors are likely to sue the owners, developers, contractors or design professionals involved in creating the structures where the attack occurs. Will the companies and professionals have adequate insurance coverage?

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


Will AIA's Revised Contract Options Prompt More Insurance Coverage?

August 17, 2017
Scott Van Voorhis & Richard Korman - Engineering News-Record

Builders risk insurance policies pack together different property insurance coverages for construction projects. They also often contain coverage for “civil authority” or “expediting cost” and “ingress/egress” insurance.

Reprinted courtesy of Scott Van Voorhis, ENR and Richard Korman, ENR

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


How to Reform Flood Insurance

August 10, 2017
H. Joseph Coughlin Jr. - Engineering News-Record

When FEMA’s National Flood Insurance Program (NFIP) expires next month, the pressure will be on Congress to reauthorize the program, ideally by adopting long-delayed reforms. Any discussion of NFIP reform should begin with an understanding of how it began, where it has gone and what is needed for its future.

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


Risk Allocation: What AIA's New Standard Form Agreements Say

August 2, 2017
Richard Korman - Engineering News-Record

As the managing director of the American Institute of Architect's Contract Documents program, Ken Cobleigh was responsible for the once-per-decade review-and-rewriting process that culminated in the release in April 2017 of the updated A201—the General Conditions for the Contract for Construction—and other related contract documents. The changes reflect in many ways the fast-changing methods of design and construction, including contract exhibits related to building-information modeling, sustainability and insurance. Cobleigh, who studied law at the University of Maryland, was a construction litigation attorney before joining AIA 11 years ago. He spoke with Deputy Editor Richard Korman about the new insurance exhibit and other matters related to the new AIA standard form agreements and risk allocation.

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


Insurer Must Defend Allegations of Misrepresentation

July 26, 2017
Tred R. Eyerly - Insurance Law Hawaii

The Montana Supreme Court held that the insurer had a duty to defend allegations of misrepresentation against the insured seller of a home. Huckins v. United Serv. Auto. Assoc., 2017 Mont. LEXIS 334 (Mont. June 13, 2017).

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



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