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Duty
to Defend - Policy Exclusions
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New York's Highest Court Rules Liability Insurer that
Breaches Duty to Defend May Not Later Rely on Policy Exclusions to Avoid Duty to
Indemnify
K2 Inv. Group, LLC v American Guar. & Liab. Ins.
Co., 2013 N.Y. LEXIS 1461 (N.Y. 2013)
The
New York Court of Appeals recently held that a liability insurer found to have
wrongfully declined to provide a defense to its insured in a legal malpractice
action was precluded from invoking its policy exclusions in a later coverage
action.
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Excess
Coverage - Underlying Exhaustion
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Second
Circuit Requires Proper Exhaustion By Payment of Underlying Loss to Implicate
Excess Coverage
Mehdi Ali v. Fed. Ins. Co., 2013
U.S. App. LEXIS 11384 (2d Cir. N.Y. June 4, 2013)
The
Second Circuit agreed with excess insurers in interpreting an exhaustion clause
and finds that excess coverage does not attach until liability payments exhaust
the underling
limits. The central issue on appeal was the interpretation of an exhaustion
provision that provided that the excess insurance would apply if the underlying
insurance coverage is exhausted "as a result of payment of losses thereunder."
The insured argued that the excess liability policies are triggered if their
liability reaches the attachment
point. The insurer, however, argued that the exhaustion clause speaks to
payments and therefore, the policies are triggered when payments reach the attachment
point.
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Contractor Exclusion
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Second
Department Upholds Insurer's Denial Based on Exclusion for Injury to Contractors
and Subcontractors.
Essex
Ins. Co. v
Mondone, 2013 N.Y. App. Div.
LEXIS 3734 (N.Y. App. Div. 2d
Dep't May 29, 2013)
A
New York appellate court ruled that an insurer was entitled to judgment as a
matter of law that it was not obligated to defend or indemnify its insured in a
suit brought by a contractor injured where the insured was also a contractor
based on a contractor exclusion.
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Late
Notice
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Policyholder's Five-Month
Delay in Providing Notice Under Pre-2009 Policy Found Untimely as a Matter of
Law
Rivera
v Core Continental Construction 3, LLC, 2013 N.Y. App. Div.
LEXIS 3711 (N.Y. App. Div.
1st Dep't May 28, 2013)
The
First Department affirmed that policies issued prior to 2009 do not require
showing
of prejudice under N.Y. Ins. Law. § 3420. As a result, the Court ruled that the
insured's delay of five months vitiated coverage irrespective of whether the
breach of the notice condition resulted in prejudice.
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Life
Insurance - Suicide Exclusion
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Claim Administrator's
Decision to Deny Life Insurance Benefits to Decedent's Beneficiary on Basis of
Suicide Exclusion Not Arbitrary and Capricious under ERISA
Riggs
v. Metro. Life Ins. Co., 2013 U.S. Dist. LEXIS 55539 (D.N.J. Apr. 18,
2013)
A New Jersey
Federal District Court upheld a life insurance claim administrator's decision to
deny coverage to a wife whose heavily-medicated husband fatally shot himself.
The Honorable Joseph Rodriguez found that even though the policy's definition of
"suicide" may have been ambiguous, the declination was not arbitrary and
capricious under the restricted standard set forth pursuant to ERISA.
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Homeowners Coverage - Business Pursuits
Exclusion
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Business
Pursuits Exclusion in Homeowners Policy Not Applicable Where Babysitting
Services Not Motivated by Profit
Bay
State Ins. Co. v. Jennings, 2013 N.J. Super. Unpub.
LEXIS 1180 (App. Div. May
16, 2013)
The
New Jersey Appellate Division determined under a two-part test that a
policyholder who consistently babysat a neighbor's child was not operating a
"business" and, thus, the business pursuits exclusion in her homeowners policy
did not preclude coverage for injuries sustained while babysitting.
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