November 15.2011

LexisNexis Insurance Law Community Names Top Insurance Blogs for 2011

by David Bruns

We’re thrilled to announce that the Policyholder Perspective blog was selected as one of the Top Insurance Blogs for 2011 by the LexisNexis Insurance Law Community (ILC).  Here’s a link to the announcement.  Thank you to our readers, the LexisNexis staff and its Insurance Law Community Advisory Board.

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Posted in News

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October 21.2011

Duty to Defend is Determined Based on the Facts, not the Causes of Action, Alleged in the Complaint

by Eric Tausend

In Career Systems Development Corp. v. American Home Assurance Co., No. C 10-2679 BZ, 2011 U.S. Dist. LEXIS 103999 (N.D. Cal. Sept. 14, 2011), Magistrate Judge Zimmerman granted an insured summary judgment finding that the insurer had a duty to defend based on the facts pled in the underlying litigation.  This opinion is a reminder to policyholders that, under California law, an insurer’s duty to defend is determined based on the facts alleged in the complaint, not the causes of action that the plaintiff has chosen to plead.  In other words, for a duty to defend to exist, underlying complaints need not specifically allege a covered cause of action, so long as the facts alleged within the complaint could give rise to a potentially covered claim. 

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Posted in General Liability Policies

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September 21.2011

Vote Policyholder Perspective as a Top Insurance Blog for 2011

by David Bruns

The blog team at Farella is delighted to announced that the Policyholder Perspective blog has been included in the initial list of nominees for the LexisNexis Insurance Law Community’s Top 50 Insurance Blogs for 2011 campaign.  The Policyholder Perspective blog is dedicated to providing comments and insights on issues of importance to anyone interested in commercial insurance coverage.  We hope that you will support our efforts to be interesting and informative by voting now.  The ILC is accepting votes and comments now through September 30, 2011.  Click here to add a comment about the Policyholder Perspective blog.

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Posted in News

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September 20.2011

Investigation Costs May Be Covered By D&O Policy

by Amanda Hairston

The Second Circuit recently issued a decision in MBIA Inc. v. Fed. Ins. Co., 2011 U.S. App. LEXIS 13402 (2d Cir., July 1, 2011), finding coverage for investigative costs associated with: 1) a subpoena issued by the New York Attorney General; 2) a formal order issue by the SEC; and 3) related derivative actions.  

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Posted in D & O

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September 09.2011

Insurance Issues in Bankruptcy Proceedings

by David Bruns

Farella bankruptcy expert, Gary Kaplan, will discuss key issues that you need to know about insurance in bankruptcy proceedings, with a focus on:

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Posted in Speaking Engagements

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August 10.2011

Court of Appeal Finds no Coverage for the Unintended Consequences of an Intended Act

by Eric Tausend

The California Court of Appeal recently held in, State Farm General Insurance Co. v. Frake, that the term “accident” applies to the unintended acts of the insured, but not to the unintended consequences of the insured’s intentional acts. 

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August 08.2011

Kaiser Cement v. ICSOP: Court of Appeal Grapples with Horizontal Exhaustion and Stacking

by Kathryn Oliver

A recent decision by the California Court of Appeal for the Second District grappled with the concepts of “horizontal exhaustion” and “stacking” of policy limits in the context of an insured attempting to tap excess policies in a case involving continuous losses spanning multiple policy periods. Kaiser Cement and Gypsum Corp. v. Insurance Co. of the State of Pennsylvania, 2011 Cal.App.LEXIS 686 (filed June 3, 2011), involved an increasingly familiar factual scenario in which thousands of bodily injury claims were brought against Kaiser arising out of asbestos products manufacturing activities in ten different Kaiser facilities operated from 1944 until the 1980s.

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Posted in General Liability Policies

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August 01.2011

Case Confirms Insurer Loses Right to Section 2860 Fee Cap Where Insurer Does Not Promptly and Fully Defend the Insured

by John Green

In a recently decided California of Appeals case, Housing Group v. PMA Capital Ins. Co., 193 Cal. App. 4th 1150 (2011),  the court examined the issue of whether a carrier breaches its duty to defend by stating it is “investigating” the claim (rather than unambiguously accepting the defense) and then failing to pay defense costs until after the underlying matter is over.  The court in Housing Group held such conduct did not satisfy the duty to defend, and held the insurer therefore could not invoke the right under Civil Code § 2860 to limit the rates paid to independent counsel.

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Posted in General Liability Policies

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July 20.2011

Hindsight in Bad Faith

by David Bruns

Sometimes an insurer declines coverage in either a first- or third-party context, and later, a court determines that this declination was in error and that coverage existed. Not infrequently in such circumstances, the policyholder asserts that the insurer did not conduct a thorough investigation prior to the declination and thus breached the implied covenant of good faith and fair dealing.

When an insurer fails to conduct an investigation that would have uncovered facts supporting the possibility of coverage, the insurer may be imputed with knowledge of those facts. Safeco Ins. of America v. Parks, 170 Cal. App. 4th 992 (2009). Interesting questions are presented where, during discovery in the ensuing bad faith litigation, the insurer discovers new facts that tend to support the denial of coverage. In such event, can an insurer rely on these new facts in arguing that its denial was reasonable and in good faith? The law is not entirely clear, and insurers and insureds - not surprisingly - may reach different conclusions.

Click here for the complete article previously published in The Recorder written by Farella's partner Tyler Gerking.

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Posted in Bad Faith

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June 06.2011

Harsh Result In Dispute Over Appointed Counsel

by Amanda Hairston

Even when carriers agree to defend an insured, policyholders and carriers can still get locked into disputes about who will provide such a defense.  Policyholders often want to choose their own counsel while a carrier has its own idea about who should defend the case.  The dispute in Travelers Property v. Centex Homes, C10-02757 (N.D. Cal. April 1, 2011) illustrates this problem and shows how a dispute over defense counsel can potentially lead the carrier to argue that the policyholder has breached its duty to cooperate and that such a breach relieves the carrier of both its duty to defend and indemnify under the policy.    

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Posted in Construction Insurance, General Liability Policies, Property Insurance

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