Property Insurance

June 06.2011

Harsh Result In Dispute Over Appointed Counsel

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...

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February 22.2011

Section 533 Does Not Bar Coverage for Innocent Co-Insureds

The California Supreme Court recently issued a decision in Century-National Ins. Co. v. Jesus Garcia, No. S179252, holding that California Insurance Code section 533, which bars coverage for intentional conduct, does not apply to coverage for innocent co-insureds. The Court examined this issue in the context of a fire insurance policy. The insureds, Jesus and Theodora Garcia, suffered substantial property damage to their home when their adult son – who was also an insured under the policy – set fire to his bedroom. Century-National denied coverage for the Garcias’ claim citing the policy’s exclusion for claims based on the intentional...

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June 07.2010

Are Property Insurance Claims Getting Harder to Settle?

How much of a typical large property claim (property, builders risk, business interruption, and extra expense losses in excess of $5,000,000) actually gets paid by insurance, and how long does it take to settle a large claim with an insurance company? After 20 years of consulting on a variety of large property losses, I have my own ideas, but unlike smaller losses, for which statistics are regularly compiled, very little information is publicly available about large property claims. This is partly because they are relatively infrequent, but primarily because the settlement process tends to be highly confidential and limited to...

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May 13.2010

California Supreme Court To Decide Interplay Between Severability-of-Interests Clause And Intentional Acts Exclusion

Can an insurance company deny coverage to a homeowner who did nothing intentional because another insured under the policy committed a crime or intentional tort? The California Supreme Court heard argument on this issue last week in Minkler v. Safeco Insurance Co. of America, which involved allegations that a homeowner, Betty Schwartz, negligently failed to stop her adult son, David, who was Minkler’s baseball coach and lived with Betty, from sexually molesting Minkler when he was a teenager. The parties argued the following issue, which was certified by the Ninth Circuit to the California Supreme Court: Where a contract of...

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April 19.2010

Federal District Court Rules Against Can Manufacturer in Coverage Claim Involving Damage to Fruit Product

A district court in California recently found that an insurer was not liable where its insured sought coverage under its Commercial Umbrella policy for loss it suffered as a result of the manufacture of a defective product. Ruling in favor of the insurer on partial summary judgment, the Northern District Court held that there was no “property damage” or “loss of use” under the policy where the defective product was incorporated into another product, but did not contaminate or otherwise created a dangerous product and where the resulting product was not wholly unusable. In Silgan Containers Corp. National Union Fire...

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March 16.2010

Preparing for a Mediation Involving Coverage Issues

Adequate preparation is essential for any mediation, and mediations involving insurance coverage issues are no exception. Whether the focus of the mediation is the insurance coverage dispute itself, or whether the insurer is attending a mediation of the underlying action (with an expectation that it will fund any settlement), the insured can and should take certain steps to ensure a more productive session. 1) Select the right mediator Only the attorneys handling the case can judge which mediator has the right style and temperament to handle their specific matter. An additional consideration, however, should be whether the mediator has some...

Read the Article | Comments (4) | TrackBack | Posted in Construction Insurance, D & O, General Liability Policies, Intellectual Property Claims, Pollution Claims, Property Insurance, Risk Management

February 18.2010

Business Interuption Coverage

The recent earthquake in Eureka, California (as well as the devastating events in Haiti), reminded me of the financial challenges and complexities faced by businesses large and small following a catastrophe. While the Eureka situation is in no way comparable to the devastation in Haiti, businesses there will be facing challenges and potentially lengthy shut-downs. One tool for dealing with the financial loss of such an involuntary shutdown is business interruption insurance. However, that comes with its own set of challenges. Insureds face difficulties determining limits for both earthquake insurance and business interruption insurance. Generally speaking, limits for both should...

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May 20.2009

Homeowner Denied Coverage for Water Damage Caused by Third-party Negligence

After sopping up the mess and shutting off your water main, most homeowners reach for the telephone to call their insurer after finding a water leak and the mess, damage, and mold left in its wake. For years homeowners have found some comfort after making that call even when their homeowner’s policy excluded damage caused by water. Until the recent decision by the California Court of Appeal’s Second District in Freedman v. State Farm Ins. Co.¸ B202617 (May 5, 2009), homeowners could argue that water damage caused by the negligence of a third party was not excluded. The argument made...

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