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Pollution Liability - Policy Sublimit
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Court Upholds "Dedicated UST Sublimit
Endorsement" to Cap Insurer's Exposure Under Pollution Liability Policy
Two Farms, Inc. v. Greenwich Ins. Co., 2014 U.S. Dist. LEXIS
1629 (S.D.N.Y. Jan. 6, 2014)
The United States District Court for the
Southern District of New York ruled that an Underground Storage Tank Sublimit
Endorsement unambiguously limits coverage available under a Pollution and
Remediation Legal Liability Policy.
The insured sought coverage for losses
and expenses related to a discharge of thousands of gallons of gasoline at
its facility. The discharge was allegedly caused by a defective
"O-Ring" that allowed gasoline to leak from an underground storage
tank ("UST"). The Policy at issue covered losses from
pollution and remediation contained two endorsements relevant to the claim for
coverage. First, the "UST Exclusion" excluded coverage for losses
"based upon or arising out of the existence of any underground storage
tank(s) and associated piping." The UST Exclusion, however,
contained an applicable exception, providing that the exclusion did not apply
if the UST was listed on the policy schedule. The second endorsement, the
"UST Sublimit Endorsement," provided that all
applicable to the scheduled USTs was limited to $1,000,000 for each
loss.
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Occurrence
- Business Risks
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Under CGL Policy, No Coverage for Economic Damages
Stemming from Breach of Contract
Fed. Ins. Co. v. Marlyn Nutraceuticals, Inc., 2013 U.S. Dist.
LEXIS 178565 (E.D.N.Y. Dec. 19, 2013)
Following a detailed analysis of various
policy provisions, the Court granted summary judgment in favor of the insurer
on the grounds that the causes of action in a Verified Complaint sought
solely economic damages for breach of contract and are not covered by an
occurrence based policy.
The insured, a manufacturer and seller
of customized vitamin and nutritional supplement products, sought coverage
for a lawsuit brought by a company that purchased tablets that were later
found to be contaminated. Upon receipt of the claim, the insurer agreed
to reserved its right to withdraw, indicating the allegations
as alleged may constitute "property damage caused by an occurrence"
and invoking the "your product" and "your work"
exclusions. Shortly thereafter, an Amended Verified Complaint and
Verified Bill of Particulars specified the categories of damages:
"Credit to Customer For Product Returned or Destroyed,"
"Inventory Cost-Inventory on Hand," "Storage Cost,"
"Cost of Recall," and "Legal Fees."
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Timely
Disclaimer -- Waiver
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Court Determines "Classification Limitation
Endorsement" Is Not an Exclusion and Cannot be Waived
Black Bull Contr., LLC v Indian Harbor Ins. Co., 2013 N.Y. Misc.
LEXIS 6339 (N.Y. Misc. 2013)
finds that insurer's 55 day delay in
disclaiming coverage based on a Classification Limitation Endorsement was
untimely as a matter of nonetheless
finds the policy language does not operate as and cannot be
waived.
An insured, after receiving notice of a claim regarding an
injury to any employee, promptly provided notice to its insurer.
Fifty-five days later, the insurer disclaimed coverage based on a
Classification Limitation Endorsement, which "applied only to operations
that are classified or shown on the Declarations or specifically added by
endorsement to this Policy." Shortly thereafter, the insurer reiterated
its coverage denial and further explained the policy covered
specific types of work and the demolition work it was engaged in at the time
of the accident was not classified, and therefore, not covered.
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Late
Notice -- Additional Insureds
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Court Finds Additional Insureds Entitled to Coverage
After Establishing Reasonable Excuse for Failing to Provide Timely Notice
Petrillo Stone Corp. v QBE Ins. Corp., 2014 N.Y. Misc. LEXIS 9
(N.Y. Sup. . Jan. 3, 2014)
New York court finds that additional
insureds established reasonable excuse for failing to provide timely notice
based on good faith belief on the identity of an injured employee's employer.
The owner and construction manager
sought defense and indemnity from a contractor and its subcontractor stemming
from any injury to an employee of the subcontractor. The contract
between the construction manager and contractor required the contractor to
provide additional insured coverage on a primary basis for the owner and
construction manager. The contract between the contractor and
subcontractor incorporated by reference the contract between the contractor
and construction manager and required the subcontractor to name the owner,
construction manager, and contractor as additional insured. The construction
manager maintained that it was unaware of the contractor-subcontractor
arrangement.
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Claims-Made
- Definition of Claim
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Absence of "Claim" Against Policyholder
Precludes Coverage Under Claims-Made Policy
Seltzer v. , 2014 N.J. Super. . LEXIS 37 (App. .
Jan. 9, 2014)
New Jersey's Appellate Division
considered the scope of the term "claim" in the context of
interpreting two claims-made policies. Coverage was denied under both
policies because the policyholder could not adverse actions against him were anything more than
speculative. Policy exclusions also applied.
The policyholder had purchased a
pursuant to a contract that stated that there "was/were underground fuel
tank(s) [UST] which was/were properly removed" from the property. The
sellers did not disclose that the property had previously "been impacted
by a fuel oil release" on an adjacent property; nor did they inform the
plaintiff-buyer of the likelihood that a potentially hazardous underground
storage tank still lurked beneath the
property. When the plaintiff discovered the contamination, he sued his real
estate agent and her employer and notified his insurers of potential
environmental problems.
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Equitable
Estoppel
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Court Rejects Insured's Equitable Estoppel Argument in UIM
Dispute
Owens v. Am. Hardware Mut. Ins. Co., 2013 U.S. Dist. LEXIS
181708 (D.N.J. Dec. 30, 2013)
A New Jersey Federal District Court
Judge refused to award UIM benefits to an injured party based upon the
doctrine of equitable estoppel. The plaintiff was involved in a traffic
accident while driving to his daughter's school in a van issued to him by his
employer for work use. He settled with the other driver's
for $50,000 (the counterpart driver's policy limit) and sought uninsured
motorist coverage from the insurer whose policy covered the van. Although the
van's insurer agreed to waive its subrogation rights, it refused to
administer plaintiff's UIM benefits claim or allow it to be arbitrated.
The plaintiff sought an order stating
that he is entitled to UIM coverage and that the van's insurer must arbitrate
the amount of the claim. More specifically,
contended that the insurer should be equitably estopped from refusing to
arbitrate the claim. Plaintiff argued that he settled his case against the
other driver for a fraction of the appropriate damages in reliance on the UIM
carrier's statement that up to $500,000 would be available under its policy.
In opposition, the insurer argued that UIM coverage was not available because
the plaintiff, in violation of the terms of his employment, was using the van
for a personal purpose when the accident occurred.
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