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Priority
of Coverage - Excess Insurance
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True Excess Policy Takes Priority of Coverage Over Primary
Liability Policy Containing Excess Other Insurance Clause
Encompass Ins. Co. v. Quincy Mutual Fire Ins. Co., 2014 N.J.
Super. Unpub. LEXIS 2684 (App. Div., November 14, 2014)
The New Jersey Appellate Division ruled
that an excess policy that generally provided that its "[c]overage
is excess over any other insurance" was not superseded in priority of
coverage by virtue of a primary policy that contained an excess "other
insurance" clause. The Court also remanded so the trial court
could further consider whether attorney's fees and/or prejudgment interest
were appropriate.
The claim arose in connection with a traffic accident in which a
motorcyclist was severely injured after colliding with a motor vehicle driven
by a real estate agent returning to her office from a title closing. The
motorcyclist brought a claim against the real estate agent and her employer,
and both defendants sought coverage from their respective insurers.
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Apportionment
- Multiple Policies
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District Court Untangles Six-Way Priority of Coverage
Dispute Arising from Multi-Million Underlying Personal Injury Settlement
Carolina Cas. Ins. Co. v. Travelers Prop. Cas. Co., 2014 U.S.
Dist. LEXIS 150002 (D.N.J. Oct. 22, 2014)
The District Court apportioned liability
in connection with a $5,000,000 personal injury settlement among six
insurance policies. In so doing, it examined how the New Jersey Omnibus
motor vehicle insurance law and a subcontracting agreement interacted with
policy terms.
An employee of a subcontractor hired to
pick up concrete road barriers from a construction staging area suffered a
severe injury to his foot while the general contractor's employees moved
materials into his trailer. The employee's subsequent negligence claim
settled for $5,000,000.
The general contractor's liability
insurer contributed its $1,000,000 limit to fund the settlement while the
remaining $4,000,000 was paid by the general contractor's excess liability
insurer. Both contributing insurers sought to recover amounts under
other primary and excess policies covering, respectively, the subcontractor
(who owned the trailer) and a third party (who leased the tractor to the
subcontractor).
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Claims
Made and Reported - Interrelated Wrongful Acts
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Court Finds Letter Seeking Information from the Insured
and Requesting Insured Cease Business Operations Constitutes a Demand for
Injunctive Relief
Weaver v. Axis Surplus Ins. Co., 2014 U.S. Dist. LEXIS 154746
(E.D.N.Y. Oct. 30, 2014)
The EDNY found that no Directors &
Officers coverage was available to an insured for an indictment related to
its business as the claim and a prior demand letter constituted interrelated
wrongful acts first made prior to the inception of the policy period.
The insured, the President and CEO of a
vending machine sales company, sought insurance coverage under a Director
& Officers Claims Made Coverage Policy following the receipt of an
indictment filed in the United States District Court for the Southern District
of Florida (hereinafter the "2012 claim"). The indictment
contained allegations of conspiracy, mail fraud and wire fraud. Shortly
before the indictment was filed, the insured received a letter informing him
that he was identified as a "target of a federal grand jury
investigation in the Southern District of Florida with respect to possible
criminal violations including mail fraud, write fraud and
conspiracy." The insured forwarded this to the insurer whom denied
coverage. Upon receipt, the insurer denied coverage on the following
bases: (1) the claim was not first made during the policy period as it arose
from the same "wrongful acts" as a prior claim, a 2007 letter from
the Securities Division of the Office of the Attorney General of Maryland (hereinafter
the "2007 claim"); and (2) the 2007 claim occurred prior to the
"Pending or Prior Claim Date" and the 2007 claim and the 2012 claim
constitute interrelated wrongful acts.
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Allocation
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New York Trial Court Finds Policyholder Responsible for
Allocated Share of Environmental Liabilities Attributable to Period of
Self-Insurance Pursuant to New York Regulation Prohibiting Coverage for
Sudden and Accidental Pollution
Keyspan Gas E. Corp. v Munich Reins.
Am., Inc, 2014 N.Y. Misc. LEXIS 4469 (N.Y. Sup. Ct. Oct. 17, 2014)
The New York Supreme Court finds that
pro rata time on the risk allocation methodology applies to long-tail
environmental contamination claim, with the insured being responsible for the
period of 1971-1982 when pollution coverage was barred by statute but finds a
question of fact regarding the insured's failure to purchase coverage when it
was available in the marketplace.
An excess insurer sought a declaration
that a pro rata time on the risk approach should be applied to property
damage at two manufacturing plants and that the insurer's share should not
include those damages that occurred outside its policy periods.
Further, the insurer argued that the insured should be considered
self-insured for those years in which the insured declined to purchase
coverage that was available in the marketplace and those years - - 1971 to
1986 - - in which Insurance Law § 46 prohibited the issuance of pollution
insurance. In opposing summary judgment, the insured argued that New
York follows the "availability of insurance" allocation methodology
and as such, should allocate costs in those periods. Furthermore, the
insured argued it was the insurer who bears the burden of demonstrating the
availability of insurance.
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