Source: https://www.morrisonmahoney.com/resource/694-mm-insurance-news-10-19-18
Timestamp: 2019-04-26 01:41:09+00:00

Document:
A federal district court has ruled in Vermont Mut. Ins. Co. v. Natiello, No. 17-2050 (D. Conn. Sept. 27, 2018) that the “fraud and false swearing” clause in a homeowner’s policy, which provides that coverage is voided if the insured makes material misrepresentations concerning a claim under the policy, was not limited to issues of coverage and could be asserted by an insurer to eliminate coverage in a case where the insured gave false testimony at trial in order to help the plaintiff.
A federal judge has ruled that ten separate lawsuits alleging that the insured mishandled human remains all involved similar allegations of wrongdoing and therefore constituted a single $2 million "claim" under a professional liability insurance policy underwritten by Hiscox. In Lloyd’s Syndicate 3624 v. Biological Research Center of Illinois, LLC, 2018 U.S. Dist. LEXIS 160263 (N.D. Ill. Sept. 19, 2018), the District Court found that the claims were sufficiently similar as to fall within the policies aggregating language for a "continuous, repeated or related wrongful acts."
The Chief Justice of the U.S. District Court in Kansas has rejected the ALI Restatement’s conclusion that insurers may be liable if they appoint defense counsel even after learning that the lawyer has a “problem.” In Progressive Northwestern Insurance Company v. Gant, 2018 WL 4600716 (D. Kan. Sept 24, 2018), declaring that Restatement was still unpublished and, furthermore, that this aspect of Section 12 did not reflect Kansas law and that the the insurer in this case was not liable for hiring an attorney who had a reputation for being obstreperous and for “thwarting settlements.” The District Court also predicted that the Kansas Supreme Court would not require an insurer to evaluate future potential conflicts of interest that had not come to pass at the time that it appointed defense counsel.
A federal district court has ruled in Milk Indus. Mgmt. Corp. v. Travelers Indemnity Company of America, 2018 U.S. Dist. LEXIS 147743 (D.N.J. Aug. 30, 2018) that a milk distributor’s claim for business interruption coverage after a fire destroyed its distributor’s dairy production facility was limited to the time that it should have taken for the distributor to rebuild its plant. The court noted that “[b]ecause [the insured] never resumed operations at a new permanent location, the [period of restoration] is based on when the ‘property at the described premises’— [the Subcontractor’s] facility—‘should be’ rebuilt.” Further, the court refused to require the insurer to provide “extended business interruption coverage” in these circumstances. Emphasizing the difference between “would have” in the ordinary business income provision and “actually did” for Extended Business Interruption coverage, the court observed that this coverage “does not rely upon estimations, but rather when the property is actually repaired, rebuilt or replaced, and when operations are resumed.” Because the milk supplier plant was never rebuilt and the insured’s operations never resumed, the insured was not entitled to extended business interruption coverage.
The Appellate Division of the New York Supreme Court has ruled in Pioneer Central School District v. Preferred Mutual Ins. Co., 2018 NY Slip Op. 06682 (App. Div. Oct. 5, 2018) that a trial court erred in holding that the liability insurer of a janitorial services company owed coverage for slip and fall claims against the School District that employed the named insured. The Fourth Department ruled that the school district was not an additional insured under the policy owing to the fact that the slip and fall incident was not proximately caused by any act or omission of the named insured and that the named insured did not cause this accident by directing the student in question to exit through a door located near the area where he subsequently slipped on the ice.
Amplifying on its 2012 Westfield decision that a contractor's own faulty workmanship is not an "occurrence" under a CGL policy, the Ohio Supreme Court has ruled in Ohio Northern University v. Charles Constructions Services, Inc., No. 2018-Ohio-4057 (Ohio Oct. 9, 2018) that the same rule applies to damage caused by a subcontractor's faulty workmanship as neither can be fortitudinous. The Supreme Court concluded that if the Ohio general assembly is inclined to disagree, it is free to adopt legislation mandating coverage in such circumstances.
Fitch Ratings has issued a new report predicting that the profitability of the London Market will remain under pressure for the rest of 2018.
Here’s the latest update from our cyber-practice group.
CoreLogic predicts that losses from Hurricane Michael may exceed $4.5 billion.

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