Below is testimony I elicited from a Nationwide Insurance representative during a recent deposition:

Q. Are you familiar with Overhead and Profit?

A. Yes.

Q. Okay. And when does Nationwide include overhead and profit in its estimates?

A. When it is reasonably necessary to assume that a general contractor is needed to facilitate the repairs.

Q. Okay. Now, going to the back of this estimate, it appears that Nationwide did not apply overhead and profit in terms of the estimate that It produced. Can you explain why Nationwide decided not to include overhead and profit on this estimate?
A. Can we – can I talk to counsel a second?

(A discussion between the attorneys was had wherein the witness was instructed to answer the question)

A. Okay. All right. It appears that we missed it.

Q. Okay.

A. Yeah There’s – there’s no reason why profit and overhead would not have been included on this estimate.


Continue Reading A Refresher on Overhead and Profit in Pennsylvania: Mee v. Safeco

Shawnee Tabernacle Church (“Shawnee”) is a Congregation located in Monroe County, Pennsylvania. The church was insured by GuideOne Insurance (“GuideOne) with a policy that included the following language under the title “Pennsylvania Changes”:

Notice of Acceptance or Denial of Claim

Except as provided in 3 below, we will give you notice, within 15 working days after we receive a properly executed Proof of Loss that we:

A.) Accept your claim.

B.) Deny your claim; or

C.) Need more time to determine whether claim should be accepted or denied.

1) If we deny your claim such notice will be in writing and we will state any policy provision, condition or exclusion used as a basis of denial. If we need more time to determine whether your claim should be accepted or denied, the written notice will state the reason why more time is required.

2.) If we have not completed our investigation, we will notify you again, in writing, within 30 days after the initial notice as provided in i.e., above and thereafter every 45 days. The written notice will state why more time is needed to investigate your claim and when you may expect us to reach a decision on your claim.

3.) The notice procedures in 1 and 2 above do not apply if we have a reasonable basis, supported by specific information, to suspect that an insured has fraudulently caused or contributed to the loss by arson or other illegal activity; under such circumstances, we will notify you of the disposition of your claim within a period of time reasonable to allow full investigation of your claim, after we receive a properly executed Proof of Loss.


Continue Reading Pennsylvania Bad Faith Archives: Shawnee Tabernacle Church v. GuideOne Insurance

With COVID-19 business closures, legislatures across the country have been grappling with new questions, including what protections may be afforded by business income insurance. As of late, members of legislatures in states like New York1 and Pennsylvania2 have all proposed legislation in favor of affording coverage for claims that might otherwise be excluded. While these bills have not passed, they may offer some indication about what legal issues could arise in the future.3
Continue Reading State Legislatures Aim to Afford COVID-19 Coverage

In Pennsylvania, construction is only able to continue for emergency repairs, construction of health care facilities, and for a select few companies that have been able to attain a waiver. In fact, Pennsylvania is the only state to shut down all active public and private construction sites.1
Continue Reading Builder’s Risk Policy – Why It Might Be a Good Time To Make Sure You Have One In Pennsylvania

The Western District of Pennsylvania recently had to answer the question of whether a raccoon’s actions in destroying a property can be considered vandalism or malicious mischief under an insurance policy. The trial court found that “raccoons and their companions in the animal kingdom cannot formulate the intent needed to engage in vandalism, malicious mischief, or any other criminal or actionable conduct.”1
Continue Reading Can a Raccoon Engage In Vandalism Under an Insurance Policy?

Merlin Law Group previously blogged about Konrad Kurach v. Truck Insurance Exchange,1 where an appeal was recently filed at the Pennsylvania Supreme Court on this question:

Did the Superior Court err as a matter of law in finding that the limitation of payment of General Contractors Overhead and Profit from actual cash value in a replacement cost policy, although violative of binding precedent, was nonetheless valid and enforceable?
Continue Reading United Policyholders Files Amicus Brief on Overhead and Profit in Pennsylvania

Every state has laws that prohibit unfair, discriminatory, or deceptive insurance practices. These regulations are normally encompassed as statutes or regulations enacted to protect insurance consumers. Pennsylvania has a statute enacted called the “Unfair Insurance Practices Act,”1 This law gives the consumer the right to file complaints against their insurance company to be investigated by the Insurance Department. However, this statute specifically prohibits a private cause of action against insurance companies by the public.
Continue Reading Pennsylvania Unfair Insurance Practices Act

In a recent decision,1 a federal court interpreting Pennsylvania law held that the discovery rule does not apply in insurance actions and the statute of limitations for an insured to bring suit against their insurance company begins to run on the date of loss and not the date the insured becomes aware of the loss.
Continue Reading When Does the Time Limitation Period Begin To Run For A Lawsuit Against My Homeowners Insurance Company?

Not sure when to sue your insurer? Property insurance policies typically contain a contractual suit limitation provision that sets the time within which policyholders may file suit on the claim. Some states allow the insurer to require in the policy that the policyholder file suit in as little as one year from the date of loss or lose coverage entirely, compared to 4- or 6-year statutes of limitations within which suit can be filed under other types of contracts.
Continue Reading Are Suit Limitation Provisions in the Policy Enforceable . . . And is the Insurer required to Show Prejudice?

Pennsylvania Insurance Commissioner Jessica Altman

The last thing an insured should do with regards to a homeowners insurance claim is to sit back and wait for the insurance company to do the right thing. There are many ways in which an insured can combat a delaying, denying, and bad treating insurance company with the most obvious being retaining a public adjuster. However, another way an insured can push the insurance carrier is to file an Insurance Complaint with the State’s Department of Insurance.
Continue Reading How To File A Complaint With The Pennsylvania Department of Insurance About Your Delaying, Denying and Bad Treating Insurance Company