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As Bay Area residents prepared for thousands of football fans and media to descend on their region for the Super Bowl, one began to hear the sorts of rumblings that typically precede big events. Traffic will be terrible. Parking will be worse. Good luck getting a table at a restaurant. Oh, and good luck finding a place a sleep if you’re from out of town.

Former Mayor Willie Brown had advice for the naysayers: Rent your house on Airbnb! “Everyone is going to make a killing, including the private citizens who are smart enough to schedule a vacation paid for by Airbnb’ing their homes.”


Continue Reading Insure Your Risk as an Airbnb Host

Last weekend’s Napa earthquake served as a wake-up call for everyone living and working in the Greater Bay Area. As with all natural disasters, after the immediate clean-up is over the analysis will begin as to how to make buildings safer and how to prevent and minimize injuries and damage.

But if you have a business that was affected by the earthquake, now is the time to be looking at your insurance policies, even while you are still sweeping up the debris and are wondering what the extent of the damage is.

If you have earthquake coverage, your insurance company can be an important resource. Insurers have experience handling disasters of all types. They have a large pool of consultants and experts who can help minimize the effect of the earthquake on your business – by providing resources to help with clean-up, estimating the extent of the damage, finding contractors quickly, and generally helping you through the crisis period.

However, insurance companies don’t know your business or your premises nearly as well as you do. Insurance adjusters – particularly in times of disasters when they are flooded with claims – will sometimes try to impose “cookie-cutter” solutions on unique situations. This could be especially true in the Wine Country, given the unique nature of the items damaged, such as historic buildings or high-quality wine. An area such as Napa, replete with wineries and specialty boutiques, restaurants and businesses, is ripe for coverage disputes over the value of damaged property, even after the scope of the damage has been agreed.


Continue Reading The Napa Earthquake – The Time To Think About Insurance Coverage Is Now

The 6.0 Napa earthquake has altered business in an around the Napa Valley, and Law360 called to ask my thoughts on earthquake insurance.  While the article requires a subscription, my key point is:

“This earthquake is a reminder of what we’ve been told for some time now — that the odds of a major earthquake

Over the past few days, there has been much hand-wringing over the Second Circuit’s decision in Mehdi Ali v. Federal Insurance Co., __ F.2d __ (2d Cir. 2013) in which the court declined to extend the holding of Zeig v. Massachusetts Bonding & Insurance Co. , 23 F.2d 665 (2d Cir. 1928), to the specific facts of the case before it. Commentators are chalking it up as a major victory for insurers, claiming that policyholders have now lost a key precedent, one which had previously allowed them to argue that an excess insurer can be required “drop down” to cover losses below its attachment point.

Not so fast.

As an initial matter, the Zeig case does not stand for the proposition described above. The Zeig case held that an excess insurer could be required to pay losses above its attachment point, if the insured had actually sustained those losses. In Zeig, an insured suffered a property loss which exceeded the limits of his primary policy, but settled with that insurer for less than the full primary policy limits. The Second Circuit reasoned that, because the insured could demonstrate that it had actually suffered property losses in excess of the primary limits, the excess insurer could be required to pay that portion of the loss which exceeded its attachment point.


Continue Reading Recent Media Coverage Overstates Impact of New Second Circuit Case Regarding “Drop-Down” Issue

A new case from Oregon deals with a recurring problem in construction defect litigation—the absence of clear dates in the complaint regarding when damage is alleged to have occurred. Frequently, a plaintiff will allege that defects in a construction project have caused property damage to other elements of the project, but the complaint is often

We hope your business did not sustain any direct property damage.  Even if that’s the case, do not fail to consider that you may have insurance coverage for financial losses caused by the storm.

Continue Reading Superstorm Sandy: Financial Loss May Be Covered Even Without Property Damage

Two seminal New York cases have brought that state, along with potentially many more, into line with California’s position on the recovery of consequential damages.

The effects of Bi-Economy Market v. Harleysville, 886 N. E. 2d 127 (N.Y. 2008) and Panasia Estates v. Hudson Insurance Company, 886 N. E. 2d 134 (N.Y. 2008) are beginning to take shape in New York and beyond. The court in both cases allowed for the recovery of consequential damages for the insurers’ breach of their respective contracts even without bad faith conduct, holding that consequential damages beyond policy proceeds were foreseeable as a matter of law. Courts in many states have taken notice, and at least nine states have followed suit. California courts, however, have long recognized such recovery – the infamous Hadley v. Baxendale rule states that if the damages are within the reasonable expectation of the parties at the time of contracting they are recoverable.


Continue Reading New Developments in the Recoverability of Consequential Damages

At long last, the Supreme Court of California issued its opinion in State of California v. Continental Insurance Company (we have previously blogged about this important case here and here).  The Court’s unanimous opinion is a resounding win for policyholders and re-affirms California’s adherence to the “all sums” allocation method and, importantly, approves of the “stacking” of insurance policies in long-tail claims.

Continue Reading California Supreme Court Affirms “All Sums” Allocation and Policy Limits Stacking

Despite the financial and economic turmoil of the last several years – both nationally and globally – the insurance market has remained remarkably stable.  There have been surprisingly few insurance company failures, and premiums have remained at worst flat, and in most cases have seen year on year decreases.

As explained in a prior article I wrote, the soft market was largely the result of long term excess capacity in the market place – meaning insurers had to compete hard against each other to get clients’ business.  Another factor was the reinsurance market – the mechanism by which insurance companies insure the risks they take on and spread risk to a much wider pool.  For a number of years reinsurers have enjoyed relatively easy years, and have seen relatively few major catastrophic losses.


Continue Reading A Look at Pricing Trends in the Insurance and Reinsurance Industries

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