Risks and Activities Covered by Insurance Policies

Often, your insurance policy will protect your property from loss by burglary, larceny, and other types of offenses. However, policies also contain numerous exclusions so it is important to read the small type in these policies because insurance companies often narrow these common-law offenses by placing certain requirements on the activity. For instance, the policy may require entry by the wrongdoer with force and violence greater than that employed in any breaking to effect an entry.1 This technicality could mean the difference between a covered loss vs. an out of pocket loss. Continue Reading

Sue and Labor Clauses

A “sue and labor clause” is typically found in a marine insurance policy and typically provides:1

And in case of any Loss or Misfortune, it shall be lawful and necessary for the Assured,… Factors, Servants and Assigns, to sue, labor and travel for, in and about the defense, safeguard and recovery of the vessel, or any part thereof, without prejudice to this insurance, to the charges whereof the underwriters or assured will contribute their proportion as provided below. And it is expressly declared and agreed that no acts of the Underwriters or Assured in recovering, saving, or preserving the Vessel shall be considered a waiver or acceptance of abandonment.

In the event of expenditure under the Sue and Labor clause, the Underwriters shall pay the proportion of such expenses that the amount insured hereunder bears to the Agreed Value, or that the amount insured hereunder, less loss and/or damage payable under this policy, bears to the actual value of the salved property; whichever proportion shall be less.

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“American Rule” Abolished in Oklahoma

Most states follow the “American Rule” when it comes to litigation. In other words, absent a specific statute or contractual provision to the contrary, each party pays their own legal costs and fees. However, the Oklahoma legislature passed, and on May 10, 2017, the governor signed into law, a bill which, in essence, abolished the “American Rule” in all civil cases. While it appears that this was the unintended consequence of House Bill 1470, the law will require the losing party in civil lawsuits to pay all court costs to the winning party, and can also place the losing party on the hook for the winning party’s legal fees. The law will take effect November 1. Continue Reading

Innocent Spouse Ability to Recover Policy Proceeds Following Arson

In Texas, unlike some states, courts assign a minor role to public policy when interpreting insurance policies. A good example is the treatment of an arsonist’s innocent spouse. As has been described earlier, the “arson defense” permits a carrier to avoid payment upon a showing that the policyholder intentionally created a loss.1 But what about the arsonist’s spouse? Continue Reading

Arizona Insurers Reminded to Provide Timely and Specific Notice of Coverage Changes

Last week, the Arizona Department of Insurance issued the first Regulatory Bulletin of 2017.1 The Bulletin reminded property insurance carriers that, pursuant to A.R.S. § 20-1677, they must provide their policyholders with written notice of premium increase, changes in deductible or reduction in limits or substantial reduction in coverage at least thirty days before the expiration date of the policy.2 Continue Reading

More on the Ripeness of Bad Faith in First-Party Property Cases in Florida

As a follow up to my colleague, Shaun Marker’s series, In Florida, An Appraisal Award May Be A Final Determination Of Liability For A Bad Faith Case, posted August 30, September 8, and September 15, 2014, I wanted to take a moment and highlight the cases that have come out since Cammarata v. State Farm Florida Insurance Company,1 that further underscore the principle that a first party property bad faith suit can be ripe absent an actual finding that the insurer breached the contract. Continue Reading

Repair or Replacement Cost as a Measure of Indemnity in New York

Recently we received a request from a reader inquiring as to who has the responsibility to determine whether a sustained covered loss to a dwelling can be repaired or must be replaced? We always urge a thorough reading of the policy first, to determine what coverages exist, but not all policies are clear. Here’s a breakdown of the law in New York. Continue Reading

Building Damage Caused by Copper Theft Is Not Excluded

Theft of copper wiring or piping is a loss that impacts many in urban areas, but whether there is coverage for the loss is usually dependent upon the specific language of the insurance policy. This issue was recently addressed by the Tennessee Court of Appeals in Dillon v. Tennessee Farmers Mutual Insurance Company.1 Continue Reading

Insurance Company and Independent Adjusting Firms That Do Not Provide Personal Protection Equipment to Fire Claim Adjusters Are Violating OSHA Standards

Fires scenes are inherently dangerous workplaces for insurance adjusters. Yet—as I stated yesterday in, OSHA Standards Apply to Insurance Adjusters, it is my experience that most insurance companies and independent adjusting firms have no safety program nor training for their adjusters who work at fire scenes adjusting losses and evaluating damages. This is illegal and in violation of federal law. It is amazing that OSHA has not fined these entities whose managers have to know about these dangers—they sell and service fire insurance. Continue Reading

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