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.

Raindrops
Raindrops is licensed under CC 2.0.

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

Most professional-liability policies are written on a “claims-made” basis, which provides coverage for lawsuits filed against the insured during the policy period — even for damages caused by some professional negligence that occurred long before the policy was issued (and, perhaps, for some mistake at a time when the insured had no insurance coverage at all).

But as the insured recently learned in Sunshine v. General Star Nat’l Insurance Co., yawning gaps can open up in insurance coverage that was otherwise dutifully purchased year after year through the often-misunderstood, and often-overlooked, mischief wrought by the policies’ “retroactive date.” Continue Reading Retroactive dates punch gaps into insured’s coverage

One of the most misunderstood provisions in a Commercial General Liability policy is the first sentence, which provides that the insurance company promises to provide coverage for damages “because of” bodily injury or property damage. Many people, including seasoned insurance professionals, believe CGL policies merely provide coverage “for” bodily injury or property damage. We see this every day, including in motions filed by insurance companies. Continue Reading Court finds plaintiff’s attorney fees covered by liability policy

Today, the Oregon Supreme Court unanimously rejected a liability insurer’s attempt to avoid paying on a judgment entered against its insured in FountainCourt Homeowners’ Ass’n v. FountainCourt Dev., LLC. The Court held that an insurer cannot re-litigate an underlying lawsuit as part of an insurance-coverage lawsuit, and that a claimant must show only that some property damage occurred during the insurer’s policy period. In so holding, the Court eliminated a series of arguments frequently raised by Oregon liability insurers. Continue Reading Oregon Supreme Court forecloses insurers from taking a second bite at the apple

The Travelers Home and Marine Insurance Company, and its lawyers, recently had a rough couple of days in the U.S. District Court for the Western District of Washington. On August 24 and 25, that court issued orders in Meier v. The Travelers Home & Marine Insurance Co. and Bagley v. Travelers Home & Marine Insurance Co. In both cases, Travelers was ordered to produce documents and deposition testimony that it had attempted to withhold based on the attorney-client privilege and/or the work-product doctrine. Continue Reading Washington courts continue to expand policyholder access to insurer files

Insurers control the defense of claims against their insureds, but this control comes with the risk that failing to settle a case could result in a verdict much greater than the available limits under the policy. And if it was reasonable and possible to settle before this calamitous end, the insurer could be on the hook for the entire judgment, which is just what happened to an auto insurer in a recent case. Continue Reading Insurer learns hard lesson in failing to settle

The Washington Court of Appeals recently issued an unpublished opinion that should serve as a warning to policyholders pursuing coverage in Washington. On its surface, The Port of Longview v. Arrowood Indemnity Co. (Aug. 2, 2016) was a significant win for the insured. The appellate court upheld the trial court’s ruling that the insured’s primary insurers had a duty to defend and indemnify, and its excess carriers had a duty to indemnify, the Port against all claims arising from two contaminated sites. In affirming the trial court’s declaratory judgment rulings, the Court of Appeals rejected the insurers’ arguments that they had been prejudiced by the insured’s late notice, that the contamination at issue was “expected or intended” by the insured, and that the policies’ “qualified pollution exclusions” precluded coverage. Continue Reading In Washington, late notice may not preclude coverage, but it could cost you your fee claim

6162007610_b92e89e087_z
Photo by JOH_4595 is licensed under CC BY 2.0.

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”

Insureds who have suffered a loss face the certain consequences of physical and financial healing, but they may also have to contend with a little salt poured into the wound by their own insurer. A frequent source of irritation for insureds can be zealous adjusters asking for information that seems irrelevant and needlessly burdensome. Some of these requests are necessary to ensure that the insurer is paying only for what it promised. But some seem designed to kill an insured’s claim by a thousand cuts. Kachan v. Country Preferred Ins. Co. (July 7, 2016) looks very much like the latter. Continue Reading Oregon Court of Appeals rejects bullying by auto insurer

Last week, I posted this article about the Ninth Circuit’s recent opinion affirming a $3.5 million attorney-fee award in favor of Schnitzer Steel against its insurer, Continental Casualty Co. Continental is unsatisfied with how it lost this battle, arguing in this petition for rehearing that the Ninth Circuit failed to adequately address Continental’s argument that Oregon’s fee-shifting statute in coverage cases doesn’t apply to losing insurers merely because the coverage lawsuit was filed in federal court.

It is Continental’s right to give this argument a shot. But what Oregon insureds should find troubling is Continental’s risibly misleading attempt to minimize what’s at stake here for insureds forced to spend many thousands (or even millions) of dollars forcing their insurers to pay what they promised. Continue Reading Update: Insurer asks for reconsideration of opinion affirming insured’s attorney-fee award