Last week, the Oregon Supreme Court made it just a little easier for an insured to recover the attorney fees that it has been forced to spend in compelling an insurer to pay up. In Long v. Farmers Ins. Co. of Oregon, the Supreme Court resolved an old ambiguity about what “recovery” means under the fee-shifting rule in Oregon’s insurance statutes. This decision should put to rest at least one opportunity for gamesmanship by insurers in Oregon. Continue Reading A “recovery” against insurers in Oregon does not require a money judgment

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

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In a recent case, Oregon Shakespeare Festival Ass’n v. Great American Ins. Co., the federal District Court for the District of Oregon adopted a liberal interpretation of “property damage.” The Oregon Shakespeare Festival Association (OSF) suffered a loss during its season: nearby wildfires caused smoke to infiltrate a partially outdoor theater where performances were being held, necessitating cancellations.

OSF’s insurance policy covered “direct physical loss or damage” to its property and the “actual loss of Business Income” caused by such loss or damage. To get coverage for the business losses it sustained by cancelling performances, OSF had to show that the smoke infiltration, the undisputed reason for the cancellations, was “direct physical loss or damage” to property. Continue Reading Oregon federal court endorses broad definition of “property damage”

A recent opinion by the Washington Supreme Court serves as an important reminder to insureds that changes during a policy’s coverage ought to be carefully minded to avoid gaps in insurance coverage. As I’ve written about before here, one of these changes that insureds often miss is when an insured building becomes vacant — even for a short while. Continue Reading Insureds cannot let sleeping dogs lie during policy periods

Intention can be a tricky concept in many areas of the law, from criminal prosecutions to insurance-coverage cases, as illustrated in a recent California case, Hung Van Ong v. Fire Ins. Exchange (Apr. 3, 2015). The Ong court had to choose between two views of what “vandalism” means in an insurance policy — one from a “legal” point of view that would destroy coverage, and one from an “ordinary” point of view that would create it. Honoring the keystone principle in these kinds of cases that a tie in a close case goes to the insured, the coverage-friendly interpretation won the day. Continue Reading Interpreting “vandalism” shows how ambiguity works in insurance-coverage disputes

Rather than litigating the amount of coverage, an insured may — and often does — settle the claim. The insured may do this for a variety of reasons, including wanting to avoid the time and expense of protracted litigation, avoiding the burden and disruption of discovery during that litigation, or the real and unfortunate need to have cash in his or her pocket to make needed repairs. But as a recent case from U.S. District Court for the District of New Jersey illustrates, an insured should carefully review the insurer’s proposed settlement agreement to ensure that he or she is releasing the insurer only from liability for the claim submitted. Continue Reading Insureds should be careful not to release an entire policy

Today, the Washington Supreme Court provided much needed relief for policyholders faced with buildings that are structurally impaired, but have not yet actually fallen down. In Queen Anne Park Homeowners Ass’n v. State Farm Fire & Cas. Co., the Court resolved a long dispute in Washington (and in other states) concerning the appropriate definition of “collapse” in a property-insurance policy, holding that “collapse” means “substantial impairment of structural integrity of a building or part of a building.”

For a long time, insurers have argued that “collapse” (when undefined) means that a building or part of a building must actually have fallen down. The Washington Supreme Court flatly rejected that construction. Continue Reading Washington Supreme Court adopts pro-policyholder interpretation of “collapse” in a property policy

Do you read your insurance policy? Do you even have a copy of it? If you are like most insureds, the answer is no. If you answered yes, let me ask a third question: Do you have all of the endorsements and have you read those endorsements, comparing them to the language in your original policy to determine what is being added or omitted from coverage? If you are like most insureds, your head is spinning right now.

Property policies are complicated contracts that set forth the obligations of the insurer upon the occurrence of any number of risks that could foreseeably damage property. But here’s the deal. Insurance contracts include many, many exclusions that can bar coverage if the unwitting business owner fails to take the proper precautions to ensure that various exclusions won’t apply. As circumstances change, so might your coverage. Continue Reading Monitor Your Risks, Mitigate Your Damage

A recent broker-malpractice case in Illinois shows how an apparently cozy relationship between a broker and a client can cost both parties dearly. In Brothers Future Holdings, LLC v. Indiana Ins. Co. (Ill. Ct. App. May 1, 2015), the insured asked its broker to buy coverage for a vacant building that the insured hoped, in short order, to at least partially fill with a new business.

Although the evidence about what the broker was told about the building and the owner’s plans for it was in dispute, the broker renewed a property policy with a full exclusion for any property that had been vacant for over 60 days —even though the insured had apparently intimated that the vacancy was not to last long. This bare discrepancy was enough to affirm the jury’s verdict for nearly $2.3 million after the insurer refused to cover damages caused by vandals stripping the building. Continue Reading Broker’s liability based on facts at placement, not insured’s aspirations for business

Last week, the Oregon Court of Appeals issued an opinion that turns logic and fairness upside down. In Deardorff v. Farnsworth (Feb. 4, 2015), the insured, a horse stable, had purchased a “Business and Commercial Farm” policy from Oregon Mutual Insurance Co. (“OMI”). Because the stable was responsible for other people’s horses, the stable asked its insurance broker whether the policy included liability coverage for damages to “CCC” property; that is, the horses under the insured’s care, custody, or control. The insurer responded to the broker’s question that this coverage was included. Based on this unambiguous representation by the insurer, the insured did not purchase a stand-alone policy to protect itself from potential lawsuits by owners of horses that were hurt while in the stable’s care.

You can see where this is going. Continue Reading Curious about your insurance coverage? Don’t bother asking your insurer.