My Dear Readers: a query. Do you really understand underinsured motorists coverage? If not, you are much like the Williams family. They sought to collect money from their automobile insurer after the death of their daughter in an auto accident caused by Myers. Their insurer denied the claim, even though the Williams paid for and expected this coverage to make up the difference in damages. Does this sound fair? It [...]
SOME COURTS CONTINUE TO LIBERALLY INTERPRET CLAUSE IN INSURED'S FAVOR Forgive my absence Dear Readers. Certainly you have missed our regular insurance lessons in this blog, yes? Humor me please. I have just come off two big trials since January. One 6 day trial here in Omaha (defense verdict for our client!), and another trial which was to start in Oakland, CA for 6-8 weeks. That case settled just before trial. However I [...]
My daughter's TV show called Teachers is premiering tonight on TV Land at 9:00 CST. The Hollywood Reporter and other TV Critics have given the show an A+. https://www.hollywoodreporter.com/review/teachers-review-965076 Katie O'Brien is the second from the right. She is a writer, producer and star. CHECK IT OUT!!!
My Dear Readers, you must all be wondering whether subrogation can arise in all insurance cases – and if so, how? Those of you who are addicted to the drama of insurance coverage, you know the answers. Don’t be shy. But for the rest of us, a basic primer might be in order. It’s the new year, so let’s refresh. 1. Contractual Subrogation The parties agree that one [...]
8TH CIRCUIT REJECTS "GOTCHA" POLICY CLAUSES. In the new case of Century Surety Co. v. Jim Hipner LLC, et al, No. 15-2120 (8th Cir. Nov. 23, 2016) the insurer denied a policyholder's claim due to late notice. The 8th Circuit panel chastised the insurer for its denial, stating that the insurance company was trying to have it both ways. What does this mean? Well, Dear Readers, let's dive in and [...]
SO SAYS THE 8TH CIRCUIT. A new ruling from the 8th Circuit affirms what we all know to be true: people who exaggerate their insurance claim losses should never be rewarded. But why is this new case interesting to us, Dear Readers? Because the 8th Circuit refused to sever the claims that were untruthful from those that were truthful and rejected them all. Final score? Insurance Carrier: 1 [...]
Last time we visited on October 8, we were gripped by the fascinating 2nd Circuit holding in National Railroad Passenger Corp. (AMTRAK) v. Aspen Specialty Ins. Co., et al, No. 15-2358-cv, ___Fed. Appx.___ (2nd Circuit September 7, 2016). Let's keep the story going. What happened next? As we left our Amtrak heroes and heroines, they were trying desperately to bypass the $125 million flood sub-limit sinkholes which were found on a paper [...]
After Super Storm Sandy flooded Amtrak’s tunnels under the East River, the passenger railroad sought to obtain coverage under a number of all risk policies in effect at the time. It wasn’t just the obvious water damage to Amtrak’s property. Amtrak also suffered from chloride (salt) erosion of its cement and steel after the waters were siphoned off. This corrosion would necessitate replacing track infrastructure at great cost – even [...]
NEBRASKA AFFIRMS RULE OF LAW: A POLICYHOLDER'S DEFECTIVE WORK PRODUCT IS NOT A COVERED PROPERTY LOSS UNLESS ACTUAL DAMAGE OCCURS Okay. What in tarnation do you mean by that Anne Marie? (For my Dear East & West Coast Readers, "Tar-Nation" is a distinctly Midwestern place where idiots not only live, but thrive.) Here is what I mean: Damages arising out of completed work performed by the insured and its subcontractors is [...]
Like Peanut butter and Chocolate! Like Strawberries & Cream! Like Rum and Cokes at midnight on a hot summer night in the late 70's when cute boys with collar length hair who smelled faintly of Brut were driving muscle cars with one hand, taking a long drag on a Salem with the other, and searching for their favorite Eagles or Head East song on the A.M. radio station while I was happy in the passenger seat wearing [...]
The question for today, Dear Readers, is whether a primary carrier has a duty to notify an excess carrier of a loss that could potentially be covered by the excess carrier's policy. Of course you know, from our multiple and engaging discussions before, that the terms of the policy are what control the duties, obligations and actions of the insurers and the insured. So we should go straight to the insurance policy to [...]
Add this case to your Big Fish Basket! A Wisconsin federal court recently ruled in Fleet & Farm of Green Bay, Inc. v. United Fire & Cas. Co., No. 13-C-1013, 2015 WL 2453110, at *3-5 (E.D. Wis. May 22, 2015) that an additional insured does have coverage for a loss that occurs when connected to - in any tenuous way - the named insured's business. This state now joins the majority who [...]
See the adorable blonde holding the I-phone? That is my daughter Katie O'Brien. She is a writer, producer and actor on the TV Land series called "TEACHERS." ON WEDNESDAYS PREMIER: JANUARY 13 ~ 9:30 p.m. Read what critics and writers have said: "...long stretches of genuine hilarity..." - We Got This Covered "...it’s funny more often than expected." - Pittsburgh Post Gazette "It’s not only a hilarious and, at times, dark look at [...]
Let's get wonky. In an insurance kind of way. Well, Dear Readers, we are going to both dig deep and go narrow today. We will explore together a little known gap in additional insured coverage. It is wonky and conceptual but I know you can handle it. It's called the additional insured employee exclusion. Savor it, then bring it up for discussion at your next cocktail party. Impress your friends and acquaintances. Who wouldn't want [...]
In honor of the release of the new Star Wars movie, let's revisit another epic insurance battle: additional insureds v. contractual insureds. Who is stronger, more resilient, covered? Alas Dear Readers you know this is my favorite subject don't you? Cant you tell? I talk about it all the time! Star Wars? NO!! Additional insured coverage under a standard CGL policy. Sigh......I do need to get a life. But who [...]
In honor of the new Star Wars film let’s take a look at an epic type of battle in the insurance industry. An insurance carrier has two duties in the policy that are regularly enforced by courts. One is the duty to defend. The other is the duty to indemnify. Both assist the policy holder, but they are not created equal. Duty to Defend. When a policyholder is sued or a claim [...]
NOT NECESSARILY. HOW ABOUT THAT FOR A DEFINITIVE ANSWER? HUH??? Well, my Dear Readers, we do know that everything in insurance has to do with context - both factual and contractual. What is the exact wording of the insurance agreement? Because we know that under Nebraska law (and all other states) policy interpretation is a matter of contract law. If the terms are not ambiguous, the courts will give the language its true [...]
In Nebraska, an insurance company is not liable for defense costs as a matter of law where defense and settlement of the claim concluded before the policyholder notified the insurer. Well, Dear Readers, you must be thinking "Duh!" Of course an insurance company should not have to pay the claim if the policyholder defended and settled the suit on its own without notifying the insurer. Why is this one of your [...]
Fill up your cup of coffee friends. We need to hunker down and get real here about the dark side of ride-sharing. Would you get into a stranger's car on a street corner and ask for a ride? Would you want your stranger to have adequate insurance in case of an accident? Would you want your stranger to pass a rigorous test confirming his driving skills? Would you want your stranger to be randomly tested to make sure he is not impaired while driving? Would you want your stranger to [...]
YOU HAD BETTER READ THAT INSURANCE APPLICATION BEFORE YOU SIGN IT. YES, SIREE. BUT NOT ALWAYS. This point was brought home by the 8th Circuit in the case of Metropolitan Prop. and Cas. Ins. v. Calvin, 802 F.3d 933 (2015). There, Calvin's house burnt down. He collected insurance and rebuilt on the same land. When the second house was finished, he sought coverage from his original insurer, State Farm. The agent told [...]
Standard CGL Policy May NOT Cover Most Cyber Risks. It has become clear that network security alone is inadequate to mitigate a company's cyber risk. Hackers have shown just this last year that they can penetrate firewalls and network security systems. Insurance coverage should be part of your risk management protocol. But to what extent are you covered? A 2012 Towers Watson report revealed that 72% of the 153 Risk Managers polled admitted that [...]
KEEPS CHUGGING ALONG... Railroads have been asking for additional insured coverage from their vendors, contractors and lessees for some time now. The body of case law challenging that coverage is slowly building. In the railroads' favor. Let's take a look together at the most recent case for some additional nuggets of insight. In Norfolk Southern Ry Co., v. National Union Fire Ins. of Pittsburgh, PA, 999 F. Supp. 2d 906 (U.S. Dist. [...]
Oh the horror of extensive water damage – especially to a business operation!! Insurers know this well. Companies are very careful to underwrite only certain losses in a standard BOP (business operations policy) insurance form. All other rain and water losses need to be covered by endorsement at an increased premium cost. A small commercial Iowa store owner found this out the hard way. However before we get to [...]
There is a new case you should know about... In Re Deep Water Horizon ...only because everyone else is talking about it. Let's break it down here, Dear Readers! The Texas Supreme Court last week decided In Re Deepwater Horizon , No. 13-0670 (Tex. Sup. Ct. Feb. 13, 2015). (Hover and click on the link above in order to access the court's decision). The court there rejected additional insured coverage for BP's losses due [...]
Case law makes a distinction...... ....which means that we insurance nerds should too. 1. The Named Insured. This common bird pays for the policy and it is issued in his name. He is the policyholder. When the policy uses the words "you" or "your," it is referring only to him. When the policy uses the word "Insured" with a capital "I" it is also referring only to him. He usually is afforded [...]
WHY IS THIS IMPORTANT? BECAUSE COVERAGE CAN HINGE ON IT. An insurance company has three options after tender of a claim: 1. It can accept the defense and payment of the claim; or 2. It can deny the claim outright because there is no coverage under the exact terms of the policy; or 3. If coverage is in doubt, it can agree to defend you but issue a reservation of rights (ROR) letter to reserve some [...]
"TEACHERS" - MY DAUGHTER'S TV SHOW - IS PREMIERING ON THE "TV LAND" CHANNEL IN JULY. (She is the blond in the middle.) WHAT DOES THIS HAVE TO DO WITH INSURANCE? Nothing at all. Sometimes we just need to balance our intellectual curiosity about insurance with cultural frivolity.
Every once in a while, Dear Readers, I come across a crazy case that begs to be publicized. This is one of them. Can a priest obtain coverage for an affair with a parishioner's wife? Short Answer: NO!!! In Drew v. Church Mutual Ins. Co., No. 13-CV-01906 JLL MAH, 2014 WL 2436273, Slip Opinion (D.N.J. May 29, 2014) a parishioner, Doer, sought out counseling from his parish priest, Drew, concerning the declining state [...]
Does Your Personal Auto Policy Cover Losses Which Occur During A Business Pursuit? More and more of us are using our own car for work purposes. If we are involved in a car accident while working, are the losses covered? Maybe and maybe not. The standard ISO personal auto policy form states that: This coverage does not apply to: * * * Bodily injury and property damage arising out of the ownership, maintenance [...]
This should be no surprise to my dear readers! The Wisconsin Supreme court has recently ruled that manure contamination is not a covered loss under the standard CGL policy. In Wilson Mutual Ins. Co. v. Falk, 2014 WI 136 (Wis. 2014), the court ruled that manure runoff, which had contaminated several nearby drinking water wells, was a pollutant and therefore excluded from coverage. The Wilson policy covered losses for property damages and bodily injury. [...]
1. By failing to provide the policyholder with a proper and effective reservation of rights letter. 2. By failing to handle the claim in good faith, even if coverage is later denied. I agree with you. Both situations are compelling, my dear Readers. Nonetheless to protect your vulnerability we shall review only Rule #1 for today. It is considered prudent in polite society to refrain from biting off more insurance meat than one can chew in a [...]
DO BOTH POLICIES APPLY? Last week we discussed step one, which is to initially determine whether both policies would apply to the same loss. Today we are going to discuss step two, which is how to split the costs between the two policies. Courts consider the following: 1. the nature of the claim; 2. the relation of the insured to the insurers; 3. the particulars of each policy; and 4. any other equitable contribution. American Family Mut. Ins. [...]
DO BOTH POLICIES APPLY? We cannot definitively answer this questions, dear Readers, without analyzing both policies in order to determine whether the polices insure: 1. The same entities; 2. The same interest in the same property; and 3. The same risk. See, American Family Mut. Ins. v. Regent Ins. Co., 288 Neb. 25, 41 (Neb. S. Ct. May 2, 2014). It is not necessary that the policies provide identical coverage in all [...]
What is the burden of proof? In most jurisdictions that allow such a claim, the case resounds in tort. Thus, the standard burden of proof applies: duty, breach of duty, causation and damages. Today we will focus on the third element - causation. How is this proven? Courts differ in specifics, but all agree that an excess carrier must show that the claimed damages are proximately caused by the primary's bad [...]
We are digging deep again today, dear Readers, into insurance coverage issues about which I think you ought to know. How else am I going to train you to become scintillating cocktail party guests? Everyone will be clamoring for your thoughts on this subject. Trust me. 2 WAYS TO GET CGL INSURANCE COVERAGE - WITHOUT BUYING A POLICY 1. As an additional insured by endorsement. Under the standard ISO endorsement form, a [...]
ARE YOU COVERED FOR LOSSES WHEN YOU RENT A CAR? OR SHOULD YOU BUY SEPARATE RENTAL INSURANCE? My son and I went fly fishing with family in Montana last week. We rented a car from Budget. I insisted that my brother in law be added to the car rental agreement as an authorized driver. I would not let anyone else drive the car for the week - which meant that either [...]
What Losses May be Covered When A Boy Goes To College? I am kicking out launching my last child into adulthood come this fall. Nicholas Duffy O'Brien will be attending Montana State University in Bozeman as a freshman on scholarship. It is often called "Mantana State U." The boy to girl ratio is about 6:4. They compensate for the lack of women. There is fly fishing, skiing, rappelling, ice climbing, snowboarding, kayaking, buffalo, elk, moose, grizzlies, [...]
What triggers excess insurance coverage? A recent 5th Circuit case provides a sharp lesson for underwriters. Even one or two words can provide coverage - when it might not have been intended. In a Texas case, Indemnity Ins. Co. of North America et al. v. W & T Offshore, Inc., No. 13-20512 5th Circuit (June 23, 2014), the 5th Circuit overturned a summary judgment for the insurers and granted summary judgment for the policyholder. There, the policyholder, [...]
An Additional Insured May Not Be Covered for Employee Losses. We are going to go deep today, my friends, into arcane insurance policy interpretation. We will discuss how two insurance clauses can influence each other in order to to deny coverage. An additional insured by endorsement is an insured under the policy. They are bound by all other policy terms and exclusions as is the named policyholder. A standard exclusion in [...]
A mother has to brag - even if it has nothing to do with insurance. Check out my daughter, Katie O'Brien's, new comedy series for TV called Teachers. It is expected to air on the TV Land channel coming soon. You can link here to the teaser web-isodes, featuring the Katydids. https://www.teacherswebseries.com/production-credits/ Each of these talented women are stars, writers and producers of the upcoming show. More details later on when it [...]
The Anti-Subrogation Rule I know, my dear students, that you are clamoring for more obscure insurance coverage tidbits and I am here to deliver. Our rule for today: anti-subrogation. The short form is this – an insurance company cannot subrogate against its own insured. This means that an insurer cannot look to its own policyholder to satisfy or to repay the loss that the insurer has covered. The reasons behind this [...]
Hot off the presses! A recent Nebraska case, American Family Mut. Ins. Co. v. Regent Ins. Co., 288 Neb. 25 (May 2, 2014) provides us with many coverage nuggets to digest in the coming weeks! We begin with a basic tenet that is rarely discussed: Contribution is allowed between two insurers who insure the same policyholder and the same risk. Contribution is an equitable remedy. This means that a court will apply [...]
5 WILD & WACKY INSURANCE POLICIES 1. Alien Abductions. Yes, it is true. If you feel as though this is an event that is in the realm of possibility for you, Lloyd's of London will sell you a policy to coverage damages and loss when you are abducted. 2. Runaway Brides. Travelers and other insurers are now offering nuptial insurance that covers typical wedding catastrophes such as a bankrupt caterer or a bride or groom with [...]
The 8th Circuit recently issued two pollution exclusions cases: United Fire & Cas. Co. v. Titan Contractors Service, Inc., No. 13-1307 (8th Cir. May 13, 2014) and Church Mut. Ins. Co. v. Clay Center Christian Church, No. 13–1613 (8th Cir. March 25, 2014) In both of these cases, the Circuit denied coverage under a common policy clause that was aimed to exclude all coverage for loss due to exposure to pollutants. In [...]
BOTTOM LINE: Parents Beware! If your child intended to throw an underage party and someone got hurt, there is no insurance coverage.This is a parent's nightmare. As the mother of five children who are very close in age, I had many worries about teenage drinking parties. Four were teens at the same time; all were in high school together. And as a mother with a law degree, in addition to a specialty practice in insurance coverage, the [...]
DOES INSURANCE COVER THE "THEFT" OF AN ENGAGEMENT RING - WHEN A GIRLFRIEND REFUSES TO RETURN IT? BOTTOM LINE: NO. BUT YOU SHOULD NOT CALL YOUR GIRLFRIEND A HOOKER. It is Valentine's Day, my friends, so let's turn to the fickle issues of love and property for today's lesson on insurance coverage. Why do we ever intertwine the two? One is irrational, illogical, ephemeral and incapable of accurate definition or description. (That would be love, [...]
BOTTOM LINE: In Missouri - Yes! In Illinois - Yes! In the 7th Circuit - No! First, let's look at Missouri. In Columbia Cas. Co. v. HAIR Holdings, LLC, 411 S.W.3d 258 (Mo. 2013), a marketing company sent over 12,0000 junk fax advertisements to various households. A private citizen brought a class action against the marketing company under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. section 227 et seq and the parties settled. The [...]
THE BOTTOM LINE: BOTH! The policyholder has a duty to provide notice under the terms of the contract. The primary insurer has a duty under guidelines adopted by the industry. A standard form excess insurance contract contains a clause requiring the policyholder to notify the insurer of a loss. While the policyholder's duty may be excused - a topic for another blog post - courts have generally held that this notice is a condition precedent [...]
THE BOTTOM LINE: If a specific peril's policy does not define theft, a court will use a broad definition that may ultimately allow coverage. In a recent case, Peterson v. Homesite Indemnity Co., 287 Neb. 48 (Dec. 20, 2013), the Nebraska Supreme Court reviewed a standard coverage clause on theft. The policyholder had hired a moving company to transport his household goods to Florida. The cost of the move was based upon the weight [...]
THE BOTTOM LINE: NO! In the case of First Express Services Group, Inc. v. Easter, 286 Neb. 912 (2013 Neb.), the Nebraska Supreme Court found that a customer list is not a trade secret. The opinion turned on the unique nature of crop insurance and the Nebraska Trade Secrets Act - Neb. Rev. Stat. 87-502(4). Nebraska courts are reluctant to protect customer lists to the extent that they embody information that is [...]
