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


Florida Supreme Court’s Application of Insurance Bad Faith in Third-Party Context

October 16, 2018
David Adelstein - Florida Construction Legal Updates

What happens when an insured receives a judgment in excess of his/her insurance policy limits when the matter could have been resolved within the insured’s policy limits? Think of a personal injury scenario where the insured received a claim by an injured party and tenders the claim to his/her insurer. What if that matter could get resolved within policy limits but it does not and exposes the insured to a judgment in excess of the policy limits? This could be where insurance bad faith comes into play in the third-party liability insurance context based on the totality of circumstances—the insurer acted in bad faith in failing to settle this third-party claim and exposed the insured to a judgment in excess of the insured’s policy limits.

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


Uncertainty About Hurricane Florence’s Impact Zone Has Caused Widespread Event Cancellations. Insurance May Cover The Financial Loss

October 9, 2018
Michael S. Levine & Tae Andrews - Hunton Andrews Kurth

Hurricane Florence has yet to make landfall, but the storm has already wreaked havoc on this weekend’s college football schedule, concerts, and other events. West Virginia and NC State postponed their Saturday game indefinitely. Rescheduling remains to be seen. UCF and North Carolina cancelled their game outright, as did East Carolina and Virginia Tech. Other teams relocated their games or changed dates and start times, with many offering free tickets to fans who can accommodate the last-minute changes. The NFL also is keeping a close eye on the situation, as the storm could impact Sunday’s game between the Washington Redskins and the Indianapolis Colts at FedEx Field. Meanwhile, non-sporting events also have been cancelled, including Alan Jackson’s concert at the North Charleston Coliseum, the Zac Brown Band’s concerts in Charlotte and Raleigh, and J. Cole’s Dreamville Festival, which alone will require the refunding of some 30,000 tickets.

Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Tae Andrews, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Andrews may be contacted at tandrews@HuntonAK.com


The Right Endorsement: Additional Insureds

October 2, 2018
Christine Cowan - Construction Executive

Adding other parties as an additional insured on to a general liability policy has become increasingly popular during the past 20 years. Almost every contract, especially in the construction industry, includes this requirement. To keep up with demand and pressure from the insurance industry, the Insurance Services Office has issued various versions of the standard endorsements, CG 20 10 and CG 20 37, which have not always been advantageous to additional insureds, especially in the construction industry. Therefore, it is important to review construction contracts in full and pay special attention to the wording revolving around the additional insured endorsements.

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


Hurricane Florence Causes Estimated $2.5 Billion in Insured Losses

September 25, 2018
Ivan Levingston - Bloomberg

Hurricane Florence, which made landfall in North Carolina Friday as a Category 1 storm, is estimated to have caused insured losses totaling $2.5 billion, according to catastrophe modeler Karen Clark & Co.

That figure includes privately insured wind, storm surge and inland flooding damage, while excluding losses covered under the federal government’s National Flood Insurance Program, the Boston-based company said in its advisory.


Assignment of Benefits Provision in Homeowner’s Policy is Enforceable

September 18, 2018
David Adelstein - Florida Construction Legal Updates

When it comes to property insurance claims, particularly those under a homeowner’s insurance policy, an insured will oftentimes assign its benefits under the policy to a restoration contractor. The request for the assignment may likely be prompted by the contractor that does not want to perform the work without the assignment of benefits. The assignment of benefits (also known by the acronym “AOB”) allows the third-party contractor (as the assignee of the insured) to sue the insurer directly for benefits under the policy associated with the restoration work.

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


SBA Cuts Surety Guarantee Fees, for One Year

September 10, 2018
Tom Ichniowski – Engineering News-Record

The U.S. Small Business Administration will be trimming the fees it charges for its surety bond guarantees for one year, the first reduction in the charges in 12 years.

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


Over One Hundred Charged in Fraudulent Sandy Relief Fund Applications

September 5, 2018
David Suggs – Bert L. Howe & Associates, Inc.

Recently, the number of false claims in New Jersey Sandy Relief Fund Applications has grown to 120, according to Property Casualty 360. Furthermore, “[t]he 120 people charged by the Attorney General’s Office allegedly were responsible for diverting more than $8 million in relief funds.”

Attorney General Gurbir S. Grewal explained what has been done to reclaim the alleged diverted funds: “We have recovered over $2.2 million through these prosecutions and we also have sent a strong message that should deter this type of fraud during future disaster relief efforts.”



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