Source: http://constructiondefectjournal.com/constructioninsurancenews.html
Timestamp: 2019-04-23 22:14:57+00:00

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French insurer Axa SA could be on the hook for potential payouts tied to the devastating fire that ripped through Notre-Dame Cathedral, but the government’s ownership of the landmark means the insurance industry could be spared from significant losses tied to the blaze.
Although commercial contractors are usually aware of the dangers of fires at jobsites, that doesn’t mean they are prepared for one. For many, a big part of the problem is putting too much faith in their builder’s risk insurance policy without understanding the minutiae. For others an “it won’t happen to me” attitude is the culprit. Whatever the case, inadequate fire preparedness can lead to significant delays and exponential cost increases when the worst happens. When it comes to preparing for fire risk, having the right insurance is only the beginning of what’s important.
Given a lack of functional fire protection systems, new construction and renovation projects are more susceptible to fires. Builder’s risk insurance provides vital protection during this vulnerable time; however, builders commonly make errors and oversights that cost them when putting together policies and fulfilling reporting requirements. For instance, builders who fail to properly report the actual percent complete in their evaluation could be underinsured if peril strikes.
Reprinted courtesy of Tami Casey, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
If you and we fail to agree on the amount of loss, either may request an appraisal of the loss. However, both parties must agree to the appraisal. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. . . . If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of the loss.
Callie E. Waers, Esq., Cole, Scott & Kissane, P.A.
Many D&O insurance policies include a contractual requirement that the D&O insurer and policyholder attempt a negotiated resolution, typically through mediation, of any coverage-related dispute between the parties before the parties can resort to litigation or arbitration. However, too often such requirements lead to an unproductive mediation session – not because the process is flawed, but because the parties can have unrealistic expectations about what can be achieved through a mandatory mediation process.
On January 15, 2019, a New York appellate court reinstated portions of Insurance Regulation 208, which was promulgated by the Department of Financial Services (DFS) in December 2017. The regulation prohibited title insurers from “wining and dining” attorneys and other agents in the real estate market in exchange for business referrals, while passing those costs through to the consumers. The appellate court decision overturned a 2018 New York lower court ruling that annulled Insurance Regulation 208 in its entirety on the grounds that its provisions were arbitrary and capricious and that the regulation exceeded DFS’ regulatory authority in violation of separation of powers.
2018 was a busy year for courts deciding insurance coverage disputes. Many of those decisions will shape the coverage landscape for years to come. Policyholders enjoyed their fair share of the wins, including substantial victories in areas involving social engineering to disgorgement of corporate gain. We take this opportunity to reflect on some of the year’s most notable coverage decisions.
2018 was a banner year for decisions addressing losses resulting from social engineering phishing, spoofing and other schemes of trickery and deception.
On January 25, the Texas Supreme Court issued a unanimous ruling in the case of Anadarko Petroleum Corp. and Anadarko E&P Co. v. Houston Cas. Co., et al., characterized as an “interlocutory permissive appeal,” reversing the decision of the U.S. Court of Appeals for the Ninth Circuit, sitting in Beaumont, TX, regarding Anadarko’s insurers’ obligation to pay a significant amount of Anadarko’s legal defense costs that resulted from its liability in the Deepwater Horizon oil spill.
Answering a certified question, the Nevada Supreme Court determined that an insurer breaching its duty to defend may be liable for consequential damages caused to the insured. Century Sur. Co. c. Andrew, 2018 Nev. LEXIS 112 (Nev. Dec. 13, 2018).
While the insured was able to carry his burden to show the collapse of a roof, he failed to establish damages under the policy. Iannucci v. Allstate Ins. Co., 2018 U.S. Dist. LEXIS 203687 (N.D. N.Y. Dec. 3, 2018).
In 2005, the insured purchased a parcel of land together with a three-story building constructed in 1870. No one resided in the building at the time of purchase or afterward. The building was not well maintained and all utilities were shut off. No work was done on the building between 2005 and 2014. Between 2011 and 2014, the Fire Department issued multiple zoning/ordinance violation notices ordering the insured to make various improvements to the building and property. A notice issued in October 2013 stated that "the roof on your house needs to be replaced." Before any work was done on the roof, however, it collapsed during a snowstorm on February 21, 2014.
The Wisconsin Supreme Court determined that a fire damaging several properties arose from one occurrence. Secura Ins. v. Lyme St. Croix Forest Company, LLC., 2018 Wis. LEXIS 579 Oct. 30, 2018).
A fire broke out on forest land owned by Lyme St. Croix Forest Company. Known as the "Germann Road Fire," it burned 7, 442 acres over three days. Real and personal property belonging to many individuals and businesses were damaged. The fire allegedly began while equipment owned by Ray Duerr Logging, LLC was being repaired. Flames quickly spread from dry grass to a pile of recently felled trees and spread to the surrounding forest.
Jeffrey J. Vita & Grace V. Hebbel - Saxe Doernberger & Vita, P.C.
2018 was a year of landmark decisions regarding insurance coverage for a variety of emerging claims, including cyber fraud, the "Me Too" movement, and wildfires. Read on to learn more as well as to find out what cases you should keep your eye on as 2019 unfolds.
Will New York join the majority in finding that faulty work by a subcontractor is a covered occurrence?
Reprinted courtesy of Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and Grace V. Hebbel, Saxe Doernberger & Vita, P.C.
Serious accidents involving dump trucks and ready-mix concrete delivery trucks continue to edge up, part of a persistent, multi-industry problem with poor driving habits that has not yet responded to increased fleet and vehicle insurance premiums. Federal regulators and industry safety experts have sought to cut the accidents by limiting driver fatigue and using technology to keep a closer tab on what happens on the road.
Bethany L. Barrese - Saxe Doernberger & Vita, P.C.
The Fifth Circuit’s recent opinion in Lyda Swinerton Builders, Inc. v. Oklahoma Sur. Co.1 includes policyholder-friendly holdings on Texas law concerning the duty to defend and the potential to recover treble damages for an insurer’s knowing violation of Texas Insurance Code.
Bethany L. Barrese, Saxe Doernberger & Vita, P.C.
William S. Bennett - Saxe Doernberger & Vita, P.C.
In 2017 and 2018 alone, California experienced the two largest and the first and fourth deadliest fires in its history.
Sadly, a University of California report predicts that the frequency and potency of these fires will only continue to increase in the coming years and decades, increasing the importance of knowing about insurance.
William S. Bennett, Saxe Doernberger & Vita, P.C.
Theresa A. Guertin - Saxe Doernberger & Vita, P.C.
SDV attorneys spend a lot of time reviewing insurance policies for our construction industry clients. From analyzing policies that are meant to provide additional insured coverage to our general contractor clients, to parsing through OCIP and CCIP placements sent to us by our broker colleagues, we’ve seen it all. Sometimes coverage can be a scary thing, so in honor of Halloween, here is our “Top 10 List of Scariest Insurance Policy Terms” we’ve seen over the past year.
1. Complete bodily injury exclusions. Especially in markets where subcontractor insurance costs are high and profit margins are low, subcontractor policies contain bodily injury exclusions for employees at an alarming rate. Exclusions this broad can mean no coverage when an injured employee brings a claim against an additional insured, thereby exposing the additional insured’s corporate program to a loss which otherwise should be transferred downstream.
Theresa A. Guertin, Saxe Doernberger & Vita, P.C.
In the last three years there have been record-breaking extreme weather events, changing seasonality, increases in temperature and rainfall and overall greater volatility globally. This specifically has created a challenge for the U.S. construction industry, which after a slight decline in construction spending in 2017 is expected to have six percent growth in 2018 and will to continue to grow through 2021. The recent increase in construction spending and expected projects to come has allowed the insurance and wider financial services sector to offer increasingly tailored solutions that allow both owners and operators of construction projects to manage the financial impact of adverse weather on revenues and costs.
Reprinted courtesy of Paul Ramiz & Michael DeLio, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Earlier this month, a subcontractor default insurance company filed suit against an electrical subcontractor in New York state court. The claim: a $12.8 million loss caused by the subcontractor’s admitted failure to complete electrical work under a subcontract at the Whitney Museum of American Art in Manhattan.
The Washington State Court of Appeals has further tipped the scales in favor of insureds in insurance bad faith and Consumer Protection Act (CPA) litigation. The Court of Appeals held in Keodalah v. Allstate Ins. Co., that (1) RCW 48.01.030 imposes a duty of good faith on “all persons” engaged in the business of insurance, and (2) the CPA does not require a contractual relationship to exist between the parties in order for a claim to be valid. In other words, bad faith and CPA claims against an individual insurance adjuster will be viable.
Advanced Future showcases interesting construction inventions.
This 80 million dollar California estate includes a car elevator that can move as well as store automobiles.
Attorney Wally Zimolong discusses why government contractors should know about DOL approved apprentice programs.
A close-up look of the ongoing construction of the LA Rams stadium.
Death to Scabby the Rat or Greatly Exaggerated?
Attorney Wally Zimolong discusses an article about the NLRB’s decision to bring an unfair labor charge against the operating engineers for their use of an inflatable rat at a Chicago construction site.
EarthCam is celebrating 10 years in the new Yankee Stadium with a look back at the construction from 2007 to 2009.
Assessing SB 35—Success or Failure?
What Makes a Great Lawyer?
Are “Green” Building Designations and Certifications Truly Necessary?
Construction Nov. Jobless Rate Drops Year-Over-Year, Up Vs. Oct.

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