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BT Policyholder Protection Blog
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18 Oct 2018 Does Insurance Cover California Employers for Intentional Acts of Employee Violence?

For reasons unknown, your employee has attacked a customer with a weapon, causing grievous bodily injury. Now, you as the employer have been sued in a personal injury lawsuit. The theory is that you negligently hired a dangerous person and your failure to adequately supervise the employee allowed him or her to commit battery against a customer.   Will your commercial general liability insurance—which generally provides coverage for bodily injury claims—offer coverage to you as the employer in this situation?   Under California law, the answer depends on the specific language of exclusions your policy may contain. The California Supreme Court recently held that employers are entitled to commercial general liability coverage for allegations that they negligently failed to supervise employees who have engaged in…

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15 Oct 2018 Ohio Supreme Court Does Not Reconsider Prior Precedent Finds inadvertent defective work by subcontractor can never be a fortuitous occurrence.

The Ohio Supreme Court ruled on Oct. 9, 2018, that property damage caused by a subcontractor’s faulty workmanship can never be an accidental “occurrence” within the meaning of the Commercial General Liability (CGL) insurance policy, and is therefore not covered. Ohio Northern University v. Charles Construction Services Inc., Case No. 2017-0514 (2018). In reaching this conclusion, Ohio’s highest court followed its own precedent instead of applying the reasoning used by the vast majority of courts that have reached the opposite conclusion in recent years. Ohio Northern University (ONU) hired Charles Construction Services to oversee construction of an $8 million University Inn and Conference Center. Charles Construction obtained a general liability policy from Cincinnati Insurance Company. After the project was completed, the University discovered extensive water infiltration and…

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07 Sep 2018 Gain Policyholder Insights and CLE from Barnes & Thornburg

Recent and ongoing wildfires in California and hurricanes in Hawaii and the Gulf Coast obviously impact businesses with operations in those regions, but every business is potentially susceptible to losses arising out of natural disasters. In our latest Policyholder Insights webinar “How Secure Is Your Business From Natural Disasters?” the panel discussed these valuable lessons:   It’s important to have a plan and a team in place before a potentially insured loss occurs. Because of certain exclusions in property insurance policies, a policyholder often will need to show that damage was independently caused by something other than a flood, for example wind or fire. Several types of business interruption policies can cover some loss of business income.   To see the full webinar, check out…

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31 Jul 2018 Insurance Coverage for Construction Defects – 2018 50-State Survey

Barnes & Thornburg’s Construction Law Practice Group has issued its 2018 50-State Survey of the Threshold  “Occurrence” Issue. This updated survey reviews each state’s current case law with respect to the “occurrence” insurance coverage issue for construction defect claims.  Find out more about how your state analyzes this critical insurance issue, and whether there are any state supreme court decisions or state statues that apply.   View survey   Clifford ShapiroClifford J. Shapiro is a partner in the Chicago office of Barnes & Thornburg LLP and chair of the Construction Law Practice Group. He concentrates his practice in construction law and litigation, insurance coverage litigation on behalf of policyholders and other complex commercial litigation.More Posts – Website

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27 Jul 2018 Will Your Company’s Insurance Cover Losses Due to Phishing and Social Engineering Fraud? Six Tips for Evaluating and Seeking Coverage for Business Email Compromises

If your company fell victim to a business email compromise – a scam that frequently involves hackers fraudulently impersonating a corporate officer, vendor, business partner, or others, getting companies to wire money to the hackers – would your insurance cover your loss?  There is reason to be concerned about this sort of attack, as the FBI has explained that the “scam continues to grow and evolve, targeting small, medium, and large business and personal transactions. Between December 2016 and May 2018, there was a 136% increase in identified global exposed losses” in actual and attempted losses in U.S. dollars.  The good news for policyholders is that courts across the country have been ruling that crime insurance policies should provide coverage for this sort of loss,…

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15 Jun 2018 Kentucky Supreme Court Doubles Down on Wrong Analysis of “Occurrence”

The Kentucky Supreme Court doubled down on its wrong analysis of the “occurrence” issue in Martin/Elias Properties LLC v. Acuity, 544 S.W.3d 639 (2018).  The new decision refuses to find the existence of an “occurrence” where defective basement work performed by a subcontractor caused property damage “throughout the entire property, making it structurally unsound.”  The decision applies an extreme “fortuity” analysis that is not based on the actual CGL policy terms to reach this conclusion.  The decision holds that “the legal analysis used to determine whether something constitutes an accident for issues of CGL coverage is the doctrine of fortuity, which encompasses both intent and control.”  The decision then holds that to determine whether an event constitutes an accident Kentucky courts must analyze (1) whether…

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11 Jun 2018 Is a Settlement of a Restitution Claim Covered If Your Policy’s Ill-Gotten Gains Exclusion Applies Only In the Event of a Final Adjudication?

Can liability insurance insure a policyholder’s legal obligation to return to a third party amounts that the policyholder was never permitted to obtain in the first place? Insurance carriers would cite comments from Judge Posner, of the Seventh Circuit Court of Appeals: “[a]n insured incurs no loss within the meaning of the insurance contract by being compelled to return property that it had stolen, even if a more polite word than ‘stolen’ is used to characterize the claim for the property’s return.” In this vein, insurance company personnel and their coverage counsel frequently take the position that if liability policies exclude from covered “Loss” “matters which are uninsurable” under applicable law, that encompasses a judgment of liability for restitution of amounts which the policyholder was…

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01 Jun 2018 Don’t Accept Policy Exclusions at Face Value, Especially in California

We’ve recently discussed the nuances of an insurer’s continuing duty to defend under California law in a “mixed” lawsuit alleging both covered and non-covered claims after the dismissal of the covered claims.   Insurers, however, sometimes try to evade their duty to defend at the outset, citing policy exclusions that appear – at first glance – to exclude coverage for what would otherwise be the one covered claim. Should you give up on coverage?   We don’t think so. As a preliminary matter, under California law exclusions are strictly construed against the insurer and liberally interpreted in favor of the insured. Accordingly, if there is any ambiguity as to whether the exclusion applies to negate the insurer’s duty to defend, California courts will construe the…

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29 May 2018 Eleventh Circuit Reaches Different Conclusions While Examining Pollution Exclusion

The Eleventh Circuit recently examined two insurance coverage cases involving the applicability of the pollution exclusion.  In one case it held that sewage was not a pollutant, but in the other case it held that storm water was a pollutant.  These cases provide guidance to policyholders who may face a pollution exclusion argument from their carrier in the Eleventh Circuit.    In the case Evanston Insurance Company v. J&J Cable Construction, LLC, the Eleventh Circuit held that damage caused by a sewage leak was not barred by the pollution exclusion. (Case No. 17-11188, April 20, 2018).  The court looked to a prior Alabama case that distinguished industrial waste from residential sewage.  However, the Eleventh Circuit reached the opposite conclusion in the case Centro Development Corp….

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25 May 2018 Minnesota Court of Appeals Confirms Agent Comments Can Bind Insurer

  In January 2017, a jury awarded Prospect Foundry $53,300 on a counterclaim for breach of the implied covenant of good faith and fair dealing. At the heart of the case was a representation by an insurance agent that certain workers’ compensation claims would be closed, or reserves reduced, allowing Prospect to receive a dividend on their workers’ compensation insurance premiums.   The insurer appealed, claiming in part that Prospect’s description of the representations of the agent should not have been permitted into evidence. In an April 16 decision, the Minnesota Court of Appeals affirmed in Western Nat’l Mut. Ins. Co. v. Prospect Foundry, A17-0992, 2018 WL 1787687 (Minn. Ct. App. April 16, 2018).  In relevant part, the court held:   In the past, Minnesota…

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