In a recent case out of the Fourth Appellate District of the California Court of Appeal, Clarendon America Ins. Co. v. Starnet Ins. Co., the Court held that an insurer’s duty to defend applies to the mandatory pre-litigation procedures required in California construction defect cases, holding that the term “suit”, as used in a
Amber Chrystal
Federal District Court Rules Against Can Manufacturer in Coverage Claim Involving Damage to Fruit Product
By Amber Chrystal on
Posted in General Liability Policies, Property Insurance
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…
Insurer Misconduct: Testing the Reach of the UCL
By Amber Chrystal on
Posted in Bad Faith, General Liability Policies
In Zhang v. The Superior Court of San Bernardino County, E047207 (Super.Ct No. CIVVS707287), the Court of Appeal addressed the issue of whether an insured could bring a claim against an insurer under the Unfair Competition Law (“UCL”), based on an insurer’s violations of California’s Unfair Insurance Practices Act (“UIPA”). Reversing the trial court…
AIG Policyholders Seek Coverage for Maddoff Losses
By Amber Chrystal on
Posted in Financial Crisis, General Liability Policies
The litigation fallout from the Bernard Madoff investment scandal recently entered the realm of insurance when two individuals brought a class action suit against American International Group Inc. (“AIG”) in US District Court in the Southern District of NY, alleging the wrongful denial of coverage for losses suffered as a result of Madoff’s scheme. The…
Do California Courts Have Authority to Sanction Insurers for Bad Faith Settlement Negotiation?
By Amber Chrystal on
Posted in Bad Faith, General Liability Policies
At least one court, in a recent decision out of California’s second appellate district, has answered no to that question. In Vidrio v. Hernandez, the court reversed an order imposing sanctions on an insurer for failing to negotiate in good faith at a settlement conference. The court held that even if the insurer’s conduct…
Supermarkets Prevail in Coverage Suit for Blackout Damage
By Amber Chrystal on
Posted in General Liability Policies, Property Insurance
Wakefern Food Corp. v. Liberty Mutual Fire Ins. Co., a recent case in the appellate division of the Superior Court of New Jersey, broadly construed the term “physical damage” in an all-risk insurance policy to include loss of function and loss of use.
Plaintiffs in this case, a group of supermarkets, sued Liberty Mutual for…
No Voluntary Payment Clauses: Why Communication with Your Insurer is More than Just Good Etiquette
By Amber Chrystal on
Posted in General Liability Policies
A no voluntary payment clause, commonly found in liability policies, prohibits an insured from seeking indemnification from the insurer for any payment, obligation or expense undertaken without the insurer’s consent. Included within these provisions is the prohibition against settling a claim without notice to the insurer. Under California law, courts will enforce such provisions even…