Insurance Coverage Update September 2013

NEW YORK                                                                                     September 2013 Wrongful Acts - - Employment Practices Wrongful Touching Claims Triggered D&O Employment Practices Coverage Grant; Insurer Waived Right to Disclaim Under Ins. Law Section 3420.   Jewish Cmty. Ctr. of Staten Island v. Trumbull Ins. Co., 2013 U.S. Dist. LEXIS 102063 (E.D.N.Y. July 16, 2013) The Eastern District of New York concluded that the wrongful acts alleged in an underlying lawsuit fell squarely within the insuring clause because they 'arose solely out of' the discharge of [an employee's] duties for the insured" and that the insurer had waived its right to disclaim coverage.   Read the full summary... Duty to Defend - Named Driver Exclusion  Court Grants Judgment on Pleadings as Named Driver Exclusion Does Not Apply to Bar Coverage Century Sur. Co. v. Marzec, 2013 U.S. Dist. LEXIS 106469 (S.D.N.Y. July 30, 2013) The Southern District of New York holds that the insured is entitled to coverage for a personal injury suit arising out of the insured's garage operations. The insurer of a garage operator brought suit seeking a declaration that it was not obligated to provide defense and indemnity for a personal injury suit brought against its insured.  The insurer sought coverage for an accident that occurred while one of its employees struck an individual while operating a vehicle within the garage.  The insurer declined coverage pursuant to the "Named Driver Exclusion."  The exclusion applied to "bodily injury," "property damage," or "medical payments" associated with all incidents in which a covered automobile is driven by "any individual shown in the schedule above."  The schedule did not include the employee involved in the accident.     Read the full summary...   Construction Defect - EIFS Exclusion   Court finds Policy Excludes Coverage for Collapse of a Portion of a Building's Exterior Facade FSLM Assoc. LLC v. Arch Ins. Group, 2013 N.Y. Misc. LEXIS 3296 (N.Y. Sup. Ct. July 23, 2013)                      The insurer of a contractor and developer properly denied coverage under the Exterior Insulation and Finishing System (EIFS) Exclusion as to developer and general contractor for a property damage claim that occurred when a section of an exterior facade of a building collapsed.       Read the full summary...  NEW JERSEY Bad Faith - Settlement Communications Insurer May Question Insured About Some Privileged Settlement Negotiation Communications in Context of Bad Faith Claim V.K. v. New Jersey Mfrs. Ins. Co., 2013 N.J. Super. Unpub. LEXIS 2111 (App. Div. Aug. 26, 2013) An insurer defending against a policyholder's bad faith claim is allowed to depose the policyholder regarding efforts to negotiate a settlement in the underlying matter, a New Jersey appellate panel ruled.  Although actual communications between an attorney and client are generally not discoverable, a policyholder is obligated to provide an explanation of the circumstances surrounding negotiation tactics - information that is directly relevant to whether the insurer made a good faith effort to settle the case. Read the full summary... Additional Insureds - Notice of Cancellation Notice of Cancellation to Named Insured Did Not Bar Trucking Entity's Claim for Additional Insured Status Willey v. DD Transp., 2013 N.J. Super. Unpub. LEXIS 2125 (App. Div. Aug. 27, 2013) Following a fact-specific inquiry, the New Jersey Appellate Division conferred additional insured status upon a trucking entity that had not received notice that the policy under which it sought coverage had been cancelled due to the named insured's non-payment of premiums, and considered a separate contractual agreement as evidence of the additional insured's reasonable expectations of coverage.    Read the full summary...

This newsletter contains summaries of New York and New Jersey insurance coverage decisions entered during the previous month. If you see a topic that interests you, click the link to read more and obtain a full copy of the case. For further information, please contact the Newsletter Editors, Jonathan McHenry, Neil Mody and William P. Kraussat(973) 535-0500 or email us by clicking here. The cases annexed to this newsletter have been reproduced by Connell Foley LLP with the permission of LexisNexis. Copyright 2013, LexisNexis, a division of Reed Elsevier Inc. No copyright is claimed as to any part of the original work prepared by a government officer or employee as part of that person's official duties. ©2013 Connell Foley. The information contained in this electronic message and any attached document(s) is intended for the personal use of designated recipients. This document is for informational purposes only, and is a means of disseminating general information about judicial insurance coverage law developments. It is not to be interpreted as legal advice, which must always be tailored to individual needs and particular circumstances.  Should you wish to unsubscribe from this list, and remove yourself from future Connell Foley mailings, please reply to contact@connellfoley.com, contact@connellfoley.com, with UNSUBSCRIBE  in the subject line.