Insurance Law News Archives

Past Rulings and Legislation

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January 2011

• Claim for "Loss" of Property Is Not Claim for "Loss of Use" of Property Under CGL Policy
• Quasi-Judicial Administrative Proceeding Can Constitute "Suit" Triggering Insurer's Duty to Defend

December 2010

• 2010 Annual Review of California Insurance Law (PDF) - Download Free Adobe Reader program

November 2010

• Insurer Acts in Bad Faith in Failing to Defend and Indemnify Insured Bishop In Suit Arising From Priest's Sexual Molestation of Parishioner
• Policy's "Anti-Montrose" Endorsements Do Not Eliminate Insurer's Duty to Defend Insured in "Continuous and Progressively-Deteriorating" Property Damage Case
• Insurer's Failure to Follow Own Underwriting Guidelines' Investigation Requirements Does Not Prevent Insurer from Later Raising Insured's Material Misrepresentation on Application as Defense to Coverage
• Insurer Has Duty to Defend Insured Against Lawsuit That Potentially Alleges Claim for Slogan Infringement

October 2010

• In Contribution Action, Once Participating Insurer Proves Potential Coverage Under Non-Participating Insurer's Policy, Non-Participating Insurer Must Prove Absence of Actual Coverage

September 2010

• Where Insured Contends Insurer Fraudulently Induced Settlement Agreement, Insured Cannot Affirm Agreement and Sue for Damages, But Instead Must Seek Rescission
• Pursuant to "Going and Coming" Rule's "Required Vehicle" Exception, Employee Is "Insured" For Accident While Driving to Work, and Employer's Liability Thus Falls Within "Auto" Exclusion of CGL Policy
• "Evidence of Insurance" Was Binder and, Despite Terms of Written Producer's Agreement, Producer Issuing Binder Was Insurer's Agent

August 2010

• No Coverage for Claimed Property Damage and Loss of Income Where Insured Failed to Show "Accidental Direct Physical Loss"
• "Per Claim" Self-Insured Retention Endorsement Applies Only Once to Construction Defect Action Involving Multiple Homes
• "Personal Injury" and "Advertising Injury" Coverage Do Not Apply To Claims That Insured Misappropriated Competitor's Customer List and Project Information

July 2010

• Insured's Alleged Negligent Supervision Of Employee Is Not An "Occurrence"
• Duty To Defend "Suit" Includes Duty to Defend Proceedings Under Calderon Act

June 2010

• In Light of "Severability" Clause, Exclusion for Intentional Act of "An" Insured Only Applies to Particular Insured Who Commits Such Act
• Automobile Policy "Step-Down" Provisions Limiting Coverage for Permissive Users Are Valid if They Are Conspicuous, Plain and Clear
• Court of Appeal Enforces Exclusion in Legal Malpractice Policy for Claims Made by Entities That Are Owned or Managed by the Insured

May 2010

• Liability Policy's Self-Insured Retention Can Only Be Satisfied By Named Insured, Not Additional Insured
• Party Liable Under "Peculiar Risk" Doctrine For Independent Contractor's Use Of Vehicle Is "Legally Responsible" For Independent Contractor's Conduct And Hence An "Insured" Under Independent Contractor's Auto Policy

April 2010

• Failure to Answer Questions at EUO and to Submit Complete Proof of Loss Defeats Insured’s Suit
• Defending Under One Policy Does Not Insulate Insurer from Liability for Alleged Breach of Duty to Defend / Settle Under Second Policy
• Even If Insured Business Was Operating at Net Loss Greater than Operating Costs at Time of Loss, Business Interruption Benefits for Continuing Normal Operating Expenses Are Not Reduced by Net Loss
• Subhaulers Are Not “Insureds” Under Trucker’s Commercial Auto Policy Providing “Hired Auto” Coverage

March 2010

• Appraiser’s Service as Expert in Unrelated Case is Not Basis for Disqualification from Appraisal Panel
• Fax Blasting is Not Covered Under CGL Policy’s “Advertising Injury” or “Property Damage” Coverages
• Insurer Seeking Equitable Contribution Can Only Recover Fees and Costs Exceeding Its “Fair Share”

February 2010

• “Products-Completed Operations Hazard” Exclusion Bars Coverage for Insured’s Operations, Regardless of Whether Operations are Related to Insured’s Products
• Insured’s Mistaken Construction of House Over Property Line Does Not Constitute “Occurrence,” or “Accident”
• “Personal and Advertising Injury” Coverage Does Not Apply to Alleged Damages Caused by Insured’s False Advertising of Its Own Products

January 2010

2009 Annual Review of California Insurance Law (PDF)

        Additional Rulings:

• Party Who Bought Fire-Damaged Property at Sheriff’s Sale Was Not Entitled to Insurance Proceeds, and Insurer Was Entitled to Refund from Lender to Extent Lender Received Payoff from Sheriff’s Sale
• “Land Subsidence” Exclusion Relieves Insurer of Duty to Defend Insured Against Suits Arising From Landslide

December 2009

• 2009 Annual Review of California Insurance Law (PDF) - Download Free Adobe Reader program

November 2009

• “First Publication” Exclusion Relieves Insurer of Duty to Defend Insured In Trademark Infringement Action

October 2009

• “Contractors Warranty Endorsement” Limits Insurer’s Duty to Indemnify General Contractor Who Fails to Obtain Indemnity Agreements and Certificates of Insurance from Subcontractors
• Insurer That Denies Defense to Insured May Not Later Intervene In Third-Party Suit

September 2009

• Policies Do Not Cover Damages and Statutory Attorney’s Fees Arising from Insureds’ False Imprisonment and Exploitation of Domestic Servant
• Agent/Broker Who Claims to Have Special Knowledge of Insured’s Business Assumes Special Duty to Obtain Proper Coverage

August 2009

• Insurer Has No Duty to Defend Insured in Assault and Battery Case, Even Though Insured May Negligently Have Believed He Was Acting in "Self-Defense"
• Insurer Must Inform First-Party Claimant of Contractual Limitation Period, Even Where Claimant is Represented by Attorney

July 2009

• Toxic Tort Claims Against Insured Barred by “Seepage / Pollution / Contamination” Exclusion, and Insured Fails to Satisfy Conditions of “Buy Back” Coverage
• Insurer Has No Duty to Cover Costs Awarded In Connection with Claims that Are Not Potentially Covered
• Restitution Order in Criminal Case Does Not Prevent Victim (or Insurer) From Obtaining Separate Civil Judgment

June 2009

• In Accident Involving Tractor-Trailer Rig, Statute Makes Trailer Lessor’s Policy “Excess” To Tractor Owner’s Policy
• Insurer’s Duty of Equitable Contribution for Defense Costs Arises Where, After Notice of Litigation, Diligent Inquiry Would Reveal Equitable Contribution Exposure

• Insurer Properly Denied First-Party Claim Where Contractor’s Negligence Damaged Pipe, Which Caused Corrosion, Seepage and Leakage and Mold
• California Supreme Court Watch

April 2009

• California Supreme Court Restricts Insurers’ Ability to Rely on “Qualified” Pollution Exclusion
• New California Law Further Defines "Agents" and "Brokers"

March 2009

• Insured Can “Stack” Policy Limits Across All Applicable Policy Periods in Cases of Continuous and Progress Property Damage / Bodily Injury
• Bad Faith and Punitive Damages Award Upheld Where Insurer Conducted Biased Investigation, Judge Excluded Evidence of Insured’s Prior Violent and Dishonest Acts, and Judge Excluded Recorded Statements as Hearsay
• Third-Party Claimant Does Not Have Standing to Bring Declaratory Relief Action Against Insured’s Liability Insurer

February 2009

• Liability Policy’s “First Publication” Exclusion Applies to Infringement Claims
• Uninsured Motorist Coverage Does Not Apply to Listed “Driver” Who is Injured as Pedestrian
• Statutory Attorney Fees Paid to Plaintiffs In Settlement Constitute Costs “Taxed” Against Insured Under “Supplementary Payments” Provision

January 2009

• Delays in Handling Fire Claim Support Award for Emotional Distress, Attorney’s Fees and Punitive Damages
• “Professional Services” Exclusion Does Not Relieve General Liability Insurer of Duty to Defend Insured Consultant Against Claims Arising From Injury to Worker at Job Site

December 2008

2008 Annual Review of California Insurance Law (PDF)

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November 2008

• Insurer Has Duty to Defend Insureds Against Taxpayer Suit Seeking Both Injunctive Relief and “Damages”
• Despite Uncertainty Concerning Who Actually Employed Worker Killed in Accident, Insured Is Not Entitled to Defense Under “Employers’ Liability” Coverage

October 2008

• "Genuine Dispute" Rule Does Not Bar Complaint for Bad Faith Where Insurer Allegedly Conducts Biased, Incomplete Investigation
• Insurer Has Duty to Defend Subcontractor Who Allegedly Installed Damp Drywall in Houses, Leading to Mold

September 2008

• Following Auto Dealer’s Incomplete Transfer of Vehicle Title to Driver, Driver May Be Entitled to Coverage Under Auto Dealer’s “Garage Operations” Policy
• Underinsured Motorist Coverage Not Triggered Where Injured Party’s Bodily Injury Limit is Equal to Tortfeasor’s “Combined Single Limit” for Bodily Injury and Property Damage

August 2008

• Insurer Cannot Enforce Time Limit to Collect Replacement Cost Benefits Where Insurer Fails to Promptly Advise Insured Regarding Estimated Replacement Cost and Engages in Other Delays
• Insurers Have No Duty to Defend Insured in Class Actions Alleging Product Defects in Video Game System
• "Flood" Exclusion That Did Not Mention "Wind" Was Not Ambiguous

July 2008

• Homeowners Insurer Must Defend Insured Whose Deliberate Act Allegedly Caused Claimant to Suffer Unintended Injury
• Property Insurer Did Not Assume Duty To Establish Adequate Coverage Limits, And Did Properly Notify Insured Of Elimination Of Guaranteed Replacement Cost Coverage
• Absent “Potential” for Coverage, General Contractor Not Entitled To Defense As “Additional Insured” Under Subcontractor’s Policy
• Indemnity Agreements: Indemnity Clause In Construction Contract Can Impose Duty To “Defend” Even In Absence Of Duty To “Indemnify”

June 2008

• Engineer’s Design Errors Are Not “Defective Methods In Construction” And Do Not Trigger Collapse Coverage
• Letter From Claimant’s Attorney To Insured Is “Claim” Under “Claims Made And Reported” Policy
• If Insurer’s Reservation Of Rights Triggers Insured’s Right To “Independent Counsel,” Any Dispute Regarding Independent Counsel’s Fees Must Be Arbitrated, Even If Insurer Does Not Retain “Panel Counsel”
• Uninsured Motorist Coverage: California Supreme Court Clarifies Scope Of Arbitrator’s Jurisdiction In UM/UIM Cases

May 2008

• “Cross-Suits” Exclusion Relieves Insurer of Duty to Defend Named Insured Against Suit Brought by Additional Insured
• Because Appraisal Panel Only Decided “Amount” of Loss, Court Could Confirm Amount of Award but Could Not Enter Money Judgment
• Third-Party Claimant Not Entitled to Intervene in Insurer’s Declaratory Relief Action Against Insured

April 2008

• Where Policy Covers "Personal Injury" Caused By "Accident," Insurer Has No Duty to Defend Insured Against Suit Alleging "Intentional" False Imprisonment
• Excess Insurer Has No Duty to Pay Where Insured Settles With Primary Insurer For Less Than Primary Policy’s Limits
• Ninth Circuit Finds a Duty to Defend Lawsuits Filed Against a Rock Band Musician and Related Corporation
• Property Insurance: "Absolute" Mold Exclusion Ruling Stands, Per California Supreme Court

March 2008

• Insured’s “Unintentional” But “Material” Misrepresentations in Application Give Marine Insurer Right to Rescind
• Insured Only Required to Exhaust Tortfeasor’s Motor Vehicle or Automobile Bodily Injury Liability Coverage Before Seeking Underinsured Motorist Coverage
• California Supreme Court Watch: Property and casualty insurance cases currently pending in the California Supreme Court

February 2008

• “Absolute” Mold Exclusion is Valid, Even Though Covered Water Damage is Predominant Cause of Mold
• “Pollution” Exclusion Bars Coverage For Liability Arising From Insured’s Release Of Solvent Into Public Sewer System
• Absent Prejudice, Insurer May Be Liable for Default Judgment Against Insured Arising From Insured’s Breach of Notice Clause

January 2008

• Homeowners Insurer Has No Duty to Defend Woman Who Allegedly Failed to Prevent Husband from Molesting Daughter
• Defamation Suit Against Insured Does Not Allege “Occurrence” Under Homeowners Policy
• General Liability Insurer Properly Denies Defense Under Non-Standard Additional Insured Endorsement
• Insurer’s Misrepresentation of Policy Limits to Induce Settlement Subjects Insurer to Liability for Fraud
• Bad Faith: “Genuine Issue” Rule Negates Bad Faith Claim Only If Insurer Demonstrates It Conducted Thorough Investigation

December 2007

2007 Annual Review of California Insurance Law (PDF)

Download Free Adobe Reader program

November 2007

• Misrepresentations on Application Allow Liability Insurer to Rescind Policy and Obtain Reimbursement of Defense/Settlement Costs
• Pollution Exclusion Bars Coverage for Insured’s Liability for Odors and Dust Emanating from Compost Facility
• Primary Auto Insurer Entitled to Contribution from Excess Auto Insurer for Defense Fees Pursuant to Insurance Code Section 11580.9(g)
• California Wildfires: Mudslide Damage May Be Covered if Fire is Predominant Cause of Loss

October 2007

• Insurer Must Defend Insured in Assault and Battery Case Where Insured’s Agent Might Have Acted in “Self-Defense”
• Insurer Who Covers Property Manager as Additional Insured is Entitled to Contribution from Insurer Who Covers Property Manager as Named Insured
• Sums Paid In Settlement of Pollution Claims Are Not “Damages” Under Excess Policies
• California Wildfires: Declared “State of Emergency” Triggers Insurance Code Sections

September 2007

• Auto Insurer Has No Duty to Defend Shuttle Company in Suit Arising from Employee’s Sexual Assault of Passenger
• Auto Exclusions in CGL Policy Covering Special Event Do Not Eliminate Insurer’s Duty to Defend
• Where Two UM Policies Have Different Limits, Pro-Rata Provision in One Policy Controls Over Excess Provision in Other Policy
• Bad Faith: Insured Can Recover Attorney Fees Incurred Because of Insurer’s Unsuccessful Appeal

August 2007

• No UM Benefits Due When Vehicle Owner and Operator are Covered by Personal Umbrella Policy
• Policy Issued in Texas But to Be Performed in California Must Be Interpreted Under California Law; Duty to Defend Found
• Foreclosures: Lender Insurance Claims Require Understanding of “Credit Bid” Rules

July 2007

• Where Two Insureds Have Separate Policies Covering Same Property, Each Insurer Must Pay Only Part of Loss
• “Development/Construction Exclusion” Applies Only If Insured—Not Another Party—Engages in Excluded Activity
• California Supreme Court Watch

June 2007

• In “Continuous Injury” Case, Presence of Other Available Insurance Relieves CIGA of Duty to Contribute
• In Reimbursement Claim, Whether Insured is “Made Whole” is Determined Without Deducting Attorney Fees and Costs
• Insurer Has No Duty to Defend Wife Against Claims Arising From Husband’s Molestation of Granddaughters
• Defense of Administrative Proceedings

May 2007

• Insurer Must Defend Insured in Assault and Battery Case Where There is Possibility That Insured Acted in “Self-Defense”
• In Continuous Injury Case, Insured Cannot Trigger Defense Under Early Excess Policy When Insured Has Later Primary Policy With SIR
• Rescission Is Proper Where Applications Mischaracterize Nature of Claims Against Insured

April 2007

• Subcontractors’ Insurers Who Defend Developer as “Additional Insured” Can Recover Portion of Defense Costs from Developer’s Excess Insurer
• Coverage for Property for Which Insured is “Legally Liable” Applies to Bailed Property, and Is Not Liability Insurance
• Two Insurers Must Share UM/UIM Loss on Pro Rata Basis

March 2007

• Inadequate Investigation of Fungus/Collapse Claim Exposes Insurer to Bad Faith Liability
• Insurer Has No Duty to Defend or Indemnify Landlord Against Breach of Lease Claim Brought by Tenant
• Although Landslide Results in Damage During Successive Policy Periods, There Is Only One “Occurrence” For Purposes of Limits

February 2007

• Insurer Has No Duty to Defend Suit Alleging Insured Sent Unsolicited Fax Advertisements
• “Occurrence” in CGL Policies Means Injurious Exposure to Asbestos, Not the Manufacture and Distribution of Asbestos Products
• D&O Policy Does Not Cover Insured’s Breach of Contract
• Bad Faith: "Genuine Dispute" Defense Continues to Gain Momentum in First-Party Bad Faith Cases

January 2007

• Whether Person Qualifies as “Insured” For UM/UIM Claim Must Be Decided By Arbitrator
• Insurer Obligated to Indemnify for Pollution Remediation Where Covered and Non-Covered Event are Concurrent Causes of Indivisible Damage
• Arbitration Must Be Completed Before Insured May Pursue Lawsuit for UM/UIM Benefits
• In Rental Car Transaction, Excess Insurer Has Limited Duty to Investigate Insurability and Can Rely on Misrepresentations to Avoid Coverage
• Recent Legislation: California Legislature Amends Statute Governing Priorities of Multiple Insurers Covering Motor Vehicle Accidents

December 2006

2006 Annual Review of California Insurance Law (PDF)

Download Free Adobe Reader program

November 2006

• Vacancy Exclusion’s Exception for Building “Under Construction” Applies to Renovations and Additions
• D&O Policy Does Not Cover Liability Arising From Organization’s Alleged Default on Bonds
• D&O Insurers Not Entitled to Summary Judgment Where Factual Issues Exist About Whether Insureds’ Settlement With Claimants Was Purely “Restitutionary”

October 2006

• Despite “Supplementary Payments” Clause, Insurer May Not Indemnify Insured for Attorney’s Fees Awarded in Discrimination Cased
• Insurer That Initially Refuses to Defend May Not Later Intervene to Prevent Insured’s Settlement
• Settling Insurers Cannot Obtain Contribution from Other Insurers Who Either Had No Notice or No Coverage
• Subrogation: “Superior Equities” Doctrine Can Bar Recovery Despite Comparative Fault Rules

September 2006

• Liability Policy Covers Property Damage Occurring During Policy Period, Even Though Claimant Does Not Own Property Until After Policy Period
• Insurer May Rescind Policy Based On Insured’s Failure to Disclose Prior Loss History
• Insurance Code Section 533 Does Not Necessarily Bar Coverage for Claims Alleging Breach of Fiduciary Duty
• Environmental Coverage: "Total Pollution Exclusion" Precludes Coverage for Liability Arising From Discharge of Dirt and Rocks into Creek

August 2006

• "Auto" Exclusion Bars Coverage for Insured’s Negligence in Leaving Children in Parked Car
• In Contribution Action, If Participating Insurer Proves Potential for Coverage, Non-Participating Insurer Must Prove Absence of Actual Coverage
• Liability Insurer Entitled to Contribution from Coinsurer Who Had Obtained Release from Mutual Insured
• UM/UIM: California UM Claimant Can Recover Costs Allowed By C.C.P. § 998, Even If Award and Costs Exceed Policy Limit

July 2006

• Appraisers Are Not Authorized to Determine Cause of Loss
• Excess Judgment Required Before Excess Insurer Can Sue Primary Insurer for Failure to Settle
• Defective Computer Chips Incorporated Into Disk Drives Do Not Cause “Property Damage”
• Bad Faith: Insured Can Assign Claim for Attorney Fees

June 2006

• Despite Rescission, Policy’s Contractual Limitation Clause Bars Insured’s Suit
• Spouse of Named Insured Can Sue For Bad Faith, Even Though Spouse Not a Defendant in Underlying Action
• D&O Policy Allows Allocation of Defense Fees While Suit Pending
• “Damages” Means Court-Ordered Judgments, And Affirmative Defenses Are Not “Suits”
• New Regulations: No Depreciation of Labor Expense

May 2006

Newsletter not published

April 2006

• Insurer Can Rescind Based on Material Misrepresentation in Application
• Under Claims-Made Policy, Claim is “First Brought” Insured Where Receives Demand Letter
• Insured Cannot File One Suit for Contract Damages and Another Suit for Bad Faith Damages
• Subrogation: Insurer Need Not Prove “How or Why” Sewage Backed Up from City Main if Evidence Eliminates Other Causes

March 2006

• D&O Insurer Not Obligated to Defend HOA for Breach of Contract
• EPL Exclusion Does Not Apply Where Subcontractor’s Employees Sue Insured
• No Liability for Negligent Investigation Where Loss is Not Covered
• Indemnity Agreements: Indemnity Clause Imposes Duty to "Defend" Even in Absence of Duty to "Indemnify"

February 2006

• Withdrawal of Claim Bars Later Resubmission if Prejudice Results
• Policy Covers Expenses Incurred Recovering Seized Aircraft
• Whether Insurer Unreasonably Handled UIM Claim Is Question of Fact
• Agents and Brokers: Surplus Lines Broker Can Owe Duty of Care to Third Party

January 2006

• No Coverage for Liability Arising From Sale of Real Property
• Insured’s Solicitation of Competitor’s Customers is Not “Advertising”
• Pollution Claims Do Not Fall Within CGL Insuring Agreements
• Recent Legislation: Additional Living Expense, Public Adjusters, Policy Forms and Mediation

November 2005

• New Statute Bars "Type I" Indemnity In Residential Defect Claims
• Detrimental Reliance on Insurer’s Investigation Bars Limitation Defense
• Limitation Period on Suit for Defense Costs is Tolled
• Insured Entitled to Trial, Despite Defective Opposition to MSJ

October 2005

• Carrier Recovers Defense Costs for Non-Covered Claims
• Vacancy Exclusion Applies to Building During Renovation
• Late Notice Excused Under “Claims Made and Reported” Policy
• Knowledge of Broker Who Becomes Agent Can Defeat Rescission

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