Policy Limits

News & Analysis as of

A Flood by Any Other Name is Still a Flood – or Why Losses Caused by Flood Are Subject to Flood Sublimits

In New Sea Crest Healthcare Center, LLC v. Lexington Ins. Co., No. 12-CV 6414(RJD)(RLM), 2014 WL 2879839 (E.D.N.Y. June 24, 2014), the insureds suffered losses to nursing homes in two locations as a result of Hurricane Sandy....more

New Mandatory Exclusions in Standard CGL Policies Limit Coverage for Data Breaches

The insurance industry continues to respond to the growing threat of data breaches by directing businesses facing that risk towards new, risk-specific cyber insurance products, while attempting to restrict coverage for data...more

New York Court Finds Delay In Completion Losses Are Subject To Flood Annual Aggregate Limit

In El-Ad 250 West LLC v. Zurich American Ins. Co., 2014 N.Y. Misc. LEXIS 2838 (June 27, 2014), a New York court analyzed the application of various provisions contained in a Builders Risk Insurance Policy (the “Policy”)...more

New York Court: All Sandy Losses, Including “Downstream” Financial Ones, Capped By Annual Aggregate Limit For Flood

Superstorm Sandy jurisprudence is starting to shed light on some unresolved issues in the effected states. In El-Ad 250 West LLC v. Zurich American Ins. Co., — N.Y.S.2d —, 2014 WL 2931058 (N.Y.Cty., June 27, 2014), a New...more

Northern District of New York: Primary Insurer That Waited Nine Years to Tender Policy Limits to Injured Plaintiff Was Liable to...

Quincy Mutual Fire Ins. Co. v. New York Central Mutual Fire Ins. Co., No 3:12-CV-1041-DEP (N.D.N.Y. March 31, 2014) - The Northern District of New York held that a primary carrier that declined to settle an underlying...more

Policyholders Beware: New York Court Finds Policyholder Forfeited Excess Coverage By Settling With Underlying Carriers For Less...

Many excess insurance policies provide that coverage is not available unless all underlying insurers have first paid the full limits of their policies. Relying on such language, excess insurers argue that when a policyholder...more

Don't Neglect to Understand Insurance Jargon

Unfortunately, insurance requirements in contracts are not easy to understand. The language used in insurance requirements is not always intuitive, but we all know that the consequences of not having the right insurance can...more

Not All Policies Are Created Equal: Evergreen State Appeals Court Blocks Policyholder Reach to Excess Insurance After Settlement...

The decision in Quellos Group LLC v. Federal Insurance Co., No. 68478-7-1 (Wash. Ct. App. Nov. 12, 2013) is a reminder that vague policy language can be costly. You may not have access to your excess insurance funds. The...more

One Policy Term, May Have Two Meanings

A California Court of Appeal held in Transport Ins. Co. v. Superior Ct. (R.R. Street & Co.) that a named insured’s reasonable expectations of coverage can be different from those of an additional insured’s. This ruling leaves...more

Reid Ruling Ignores Calif. Precedent

A good deal has already been written about the recent Reid case in California, but there is more to be said. On Oct. 7, 2013, Division 8 of the Second District Court of Appeals held in Reid v. Mercury Insurance Company, No....more

FHA Announces Plans to Lower Mortgage Insurance Policy Caps

Last Friday, the Federal Housing Administration announced that it will reduce the maximum threshold for the high-price mortgages it is willing to insure. This change was called for by the Housing and Economic Recovery Act of...more

Everyone Can Find Reasons to Give Thanks for 2013 California Coverage Opinions

Thanksgiving is one day when the whole family gets together and sets aside petty differences to give thanks to the Almighty for the bounty we enjoy. California’s insurance coverage family is often a dysfunctional one. To...more

Washington Appellate Court Holds That Below-Limits Settlement Fails to Trigger Excess Policies

On November 12, 2013, in Quellos Group LLC v. Federal Insurance Company, the Washington Court of Appeals affirmed summary judgment in favor of two excess professional liability insurers because the excess policies “require[d]...more

Illinois Supreme Court Holds Guaranty Fund's Indemnity Payments Not Limited By Statutory Cap

In Illinois (as in every other state), when an insurance company becomes insolvent and an order of liquidation is entered, the Illinois Insurance Guaranty Fund steps in and pays claims that the insolvent carrier could not...more

California Court Holds § 998 Offer Exceeding Policy Limits Made In Good Faith

In its recent decision in Aguilar v. Gostischef, 2013 Cal.App. LEXIS 816 (Cal. App. 2d Dist. Oct. 11, 2013), a California appellate court had occasion to consider whether a claimant’s statutory settlement offer under...more

No Settlement Offer, No Bad Faith Liability for Insurer

On October 7, 2013, the California Court of Appeal for the Second Appellate District held in Reid v. Mercury Insurance Company that an insurer that acknowledged its insured’s liability for a third party’s injuries and...more

Bad Faith Sentinel - October 2013

In This Issue: - Wisconsin Court of Appeals: Insurer Does Not Commit Bad Faith by Refusing to Pay the Undisputed Portion of an Insured’s Claim Where the Policy Does Not Require Payment - Southern District of...more

Insureds Must Exhaust Coverage From Solvent Insurers

On September 24, 2013, the New Jersey Supreme Court ruled that policyholders must look to its solvent insurers before seeking benefits from the New Jersey Property-Liability Insurance Guaranty Association (“Guaranty...more

Second Circuit Weighs in on D&O Excess Coverage

Case Notes - September 12, 2013 Second Circuit Weighs in on D&O Excess Coverage - A recent hot topic in the world of directors and officers (D&O) liability insurance is the application and interpretation of...more

Decision Stings Insureds, Though Impact Overstated

Generations of policyholders' coverage lawyers have feasted on the very brief, 4-paragraph 1928 opinion of Judge Augustus Hand in Zeig v. Massachusetts Bonding & Insurance Co., 23 F. 2d 655, which held that an excess insurer...more

Policy Observer - July 2013

Getting Over the Bar: Second Circuit Requires Actual Payment of Underlying Limits In Order to Trigger Excess D&O Policies - In June, the Second Circuit held that two Federal Insurance Company ("FIC") excess D&O...more

Déjà Vu All Over Again: Insurers Argue That Below-Limits Settlements With Underlying Insurers Negate Excess Coverage

If an insured faces liability that demonstrably exceeds the limits of underlying insurance, can an excess insurer avoid its coverage obligations because underlying insurers have not actually paid their limits of liability? ...more

Florida Bars Use of Extrinsic Evidence to Resolve Insurance Policy Ambiguities

On July 3, 2013, a closely divided Florida Supreme Court held that judges were required to interpret ambiguous policy language strictly against the insurer and in favor of coverage, and that courts should not first attempt to...more

NY Court to Insurers: If You Breach Your Duty to Defend, You May Lose Your Defenses to Indemnification

The New York Court of Appeals, New York’s highest state court, recently held – in what appears to be a new position in New York – that an insurer that breached its duty to defend could not later rely on otherwise applicable...more

New York Court of Appeals to Insurers: If You Breach Your Duty to Defend, You May Lose Your Defenses to Indemnification

The New York Court of Appeals, the state’s highest court, recently held that an insurer that breached its duty to defend could not later rely on otherwise applicable exclusions to deny coverage for indemnification....more

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