Keeping your fingers crossed, with perhaps a little truculence thrown in for good measure, should not guide an insured’s answers in filling out an insurance application. Rather, as the decision in a recent case from federal district court in Florida shows, insureds filling out renewal applications should view the world through a pessimistic eye. Continue Reading Forget the rose-colored glasses when filling out insurance applications

Last week, the Florida Supreme Court put policyholders’ minds at ease in Sebo v. American Home Assurance Co. by overturning a lower appellate court’s decision holding that the concurrent cause doctrine had no place in Florida first-party property claims.

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Until the appellate court’s decision in 2013, Florida courts had routinely applied the concurrent cause doctrine in deciding whether a loss caused by two or more independent perils was covered under a property insurance policy. But that was turned on its head when the appellate court found the concurrent cause doctrine had no place in first-party insurance claims — regardless of whether the causes of loss were dependent or independent. Instead, the appellate court held the efficient proximate cause doctrine applied and remanded the case for a determination of the efficient cause of the loss.

So what are the concurrent cause and efficient proximate cause doctrines? How do these doctrines affect policyholders? Continue Reading Florida Supreme Court holds that the concurrent cause doctrine is alive and well

Last year, I wrote about a decision by Florida’s Fourth District Court of Appeal (link here) holding that an insured, post-loss, could assign its claim against its homeowner’s insurance policy. Recently, the same issue was before the Second District. Continue Reading Florida Court of Appeals again holds that insureds may assign rights under a policy after a loss occurs.

A recent opinion out of the Fourth District Court of Appeal in Florida highlights the importance of properly pleading claims so that insurance coverage is triggered.

In Mid-Continent Cas. Co. v. Royal Crane, LLC, Cloutier Brothers, Inc. leased a crane and crane operator from Royal Crane, LLC. During construction, a truss fell from the crane and injured a construction worker. The worker sued Royal Crane, asserting claims for negligence, strict liability, and gross negligence. Royal Crane tendered its defense of the lawsuit to Cloutier under an indemnity clause in the parties’ rental agreement. Cloutier declined the tender “at the behest” of its insurer, Mid-Continent.

So Royal Crane sued, bringing a third-party action against Cloutier for contractual indemnification and breach of the rental agreement. Cloutier tendered the defense of these claims to Mid-Continent, which denied the duty to defend under the exclusion for Cloutier’s potential obligation to pay “by reason of the assumption of liability in a contract or agreement.” The poison pill for coverage turned on Royal Crane’s failure to plead around this exclusion. Continue Reading Florida Court of Appeal case serves as a reminder to be mindful of how claims are pleaded

It is common practice in Florida for companies offering emergency-restoration services to
take an assignment of the insured’s property-damage claim against the insured’s property policy in lieu of the insured paying the restoration company directly and then seeking reimbursement from an insurer.

For instance, imagine that a pipe bursts in your home, flooding a bedroom. The restoration company will come out, remove the water and damaged property, take an assignment of your claim against your insurer (and, depending on your deductible, you paying the deductible), and then seek payment directly from the insurer. Usually this goes off without a hitch. But recently Security First Insurance Company (“Security”) wanted to test this method, and it failed. Continue Reading Florida Court of Appeals: Yes, you can assign your claim after a loss

Last week, a federal district court in Florida reaffirmed the black-letter law in Florida that claims against a general contractor for damage to the completed project resulting from the defective work of a subcontractor constitutes “property damage” under a Commercial General Liability, or “CGL,” policy. The order also clarifies how “other insurance” clauses are construed when insurers offer competing arguments about who has to pay first — a common dispute in multiparty, multipolicy cases.

In Pavarini Construction Co. v. ACE American Ins. Co. (Feb. 25, 2015), Pavarini, the insured, was the general contractor for a 63-floor, mixed-use condominium tower. As is customary in projects of this size, Pavarini hired several subcontractors to perform the work. The steel subcontractor’s deficient work at issue in this case involved missing and misplaced reinforcing steel in the concrete masonry unit. This deficient work caused excess movement in the building, resulting in damage to exterior stucco, water intrusion in the penthouse enclosure, and cracking in the concrete columns, beams, and shear walls. Continue Reading Federal Court in Florida Refuses to Let Excess Insurer Escape $23M Claim Where Deficient Work Caused Damage to Project Itself