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, 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

Insurance policies almost universally require that the insured immediately report any claim made against the insured. In the context of liability policies written on an “occurrence” basis (generally, policies where coverage is triggered at the time of an accident, no matter when the lawsuit is eventually filed by the plaintiff injured in that accident), late notice to the insurer under Oregon law does not destroy the insurer’s duty to defend and cover a loss unless the late notice somehow prejudiced the insurer. See, e.g., Employers Ins. of Wausau v. Tektronix, Inc. (Or. Ct. App. 2007) (refusing to hold that a 12-year delay was prejudicial).

But a recent California case follows a far stricter rule where the policy was issued on a “claims made and reported” basis, which is how most professional-liability (or “errors and omissions”) policies are written. In Alterra Excess & Surplus Ins. Co. v. Gotama Bldg. Engineers, Inc. (C.D. Cal. July 24, 2014), Gotama, an engineering firm, Continue Reading Failing to Timely Report a “Claim” May Leave Insureds with No Coverage

The Ninth Circuit, applying Arizona law, recently held that an insurer may avoid the duty to defend innocent insureds based on somewhat unique terms in a liability policy. In IFC v. Roman Catholic Church, (9th. Cir July 30, 2014), the Court began with a simple question: “Does ‘any’ mean ‘any,’ or does ‘any’ mean ‘any one?’” Given this question, the answer appears to be easy, but this question may not have been the right one, at least according to a dissenting opinion. Continue Reading Ninth Circuit hands out tough decision for innocent insureds seeking a defense from the insurer

Oregon Court of Appeals Decision Handed Down Today in FountainCourt Homeowners Ass’n v. FountainCourt Development, LLC

The Oregon Court of Appeals handed down a lengthy opinion upholding a money judgment awarded in favor of a judgment creditor in its garnishment action against American Family Insurance Company. FountainCourt Homeowners Ass’n v. FountainCourt Development, LLC, Or App (August 6, 2014), initially arose out of a homeowner association’s claim against the original sider (and others) for construction defects associated with the FountainCourt Townhomes and Condominiums. In 2010, the Association’s case went to trial. The jury returned a verdict against the sider in the amount of $485,877.84. (Note:  Ball Janik LLP did not represent any parties in this case.)

Continue Reading Oregon Policyholders and Judgment Creditors Get Big Win on Insurance Coverage Issues

Property owners want assurances that their contractors have sufficient liability insurance, which often means that contractors must submit certificates of insurance before starting work. But to the dismay of many owners after it’s too late (that is, after the contractor has caused some damage as a result of its work), certificates of insurance may provide only the illusion that an insurer will bring any money to the table.

This rude surprise Continue Reading Relying on a Certificate of Insurance? Don’t.