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Allocation
- Late Notice
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New York Federal Court Affirms Insurer's Proration of
Defense Cost Payments; Enforces Notice Requirements in
Claims-Made-and-Reported Policy
Travelers Indem. Co. v. Northrop Grumman Corp.,
2013 U.S. Dist. LEXIS 161552 (S.D.N.Y. Oct. 31, 2013)
The Southern District of
New York ruled that an insurer was not required to pay more than its agreed
25% of defense costs and refused to require the payment of defense costs on
an all sums basis. The Court further held that Environmental Hazard
policies with "claims made and reported" language were to be
strictly construed such that a claim that arose in December but was tendered
to the insurer in January was untimely under a policy that expired in
December (because tender was not made until January) and under a separate
policy that commenced in January (because the claim first arose in
December). Additionally, the Court ruled that late notice was a complete
defense to coverage with respect to one site in this environmental coverage
action.
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Priority of Coverage
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Court
Determines General Contractor's CGL Policy is Excess to Subcontractor's
Umbrella Policy
Pennsylvania Lumbermens Mut. Ins. Co. v. Zurich American
Ins. Co.,
2013 N.Y. Misc. LEXIS 5650 (N.Y. Sup. Ct. Dec. 6, 2013)
After conducting a priority of coverage analysis, a New
York trial court ruled that a general contractor's insurer is not required to
contribute toward an adverse verdict until the subcontractor's umbrella
policy limits have been exhausted, pursuant to the policy language and law.
This declaratory judgment action was filed by the insurer
that issued primary and umbrella coverage to a general contractor, against
the umbrella insurer of the subcontractor, seeking a ruling that it is not
required to contribute to any possible damages unless the umbrella policy is
exhausted. The court noted that the first step in analyzing the priority of
coverage amongst the implicated policies is to ascertain "the purpose
each policy was intended to serve as evidenced by both its stated coverage
and the premium paid for it, as well as upon the wording of its provision
concerning excess insurance to avoid distorting the meaning of the terms of
the policies involved."
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Auto
Coverage - Rental Truck Insurance
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The
Motor Carrier Act ( MCA ) Inapplicable to Rental Truck Used Only for
Intrastate Travel
Allstate N.J. Ins. Co. v.
Penske Truck Leasing,
2013 N.J. Super. Unpub.
LEXIS 2863 (App. Div. Dec. 2, 2013)
The Court held that the federal Motor Carrier Act of 1980
(MCA ) was not applicable to a rental truck that caused an accident while
traveling only within New Jersey after concluding that a
"trip-specific" analysis showed the truck was not engaged in interstate
commerce sufficient for the MCA, particularly the $750,000 coverage mandated
by the MCA, to apply in this case.
An individual with no personal automotive insurance
rented a moving truck covered by insurance with limits of $15,000 per person
and $30,000 per accident. The individual was involved in a traffic accident
while driving the moving truck. The counterpart vehicle's insurer paid PIP
benefits for the driver and passengers in that car and looked to the rental
truck insurer for reimbursement. The rental truck insurer maintained that its
coverage had been exhausted by a previous $30,000 settlement of the injured
parties' claims. This coverage dispute focused on whether the rental truck
insurer's coverage was exhausted.
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Interpretation
of Policy Exclusion
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Exclusion
for Watercraft While Ashore Unambiguous
Continental
Cas. Co. v. Northland Ins. Co.,
2013
N.J. Super. Unpub. LEXIS 2749 (App. Div. Nov. 14, 2013)
A subrogating insurer who paid for fire damage to two
boats owned by its policyholders sought a declaration that the commercial
auto/ garage insurer covered the liability of the alleged tortfeasor
responsible for the fire. The Appellate Division found an exclusion in the
insurer's policy clear and unambiguous and applied to bar coverage. The panel
also refused to find that the insurer was estopped from relying on the
exclusion by not mentioning the provision in its answers to interrogatories.
A fire at a public marina damaged two boats. One of the
boats was owned by an individual who had considered donating it to charity.
The individual who served as the facilitator of this donation was the
principal officer of a company engaged in the business of buying, repairing,
and selling boats. This facilitating individual had transported the boat to
the public marina -- apparently without the owner's permission; and it was
the facilitator's friend who had negligently started the fire. The property
insure for the damaged boats paid for the damage and then filed a subrogation
claim against the facilitator, his friend, and the facilitator's company.
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