Archives: Contract construction

Subscribe to Contract construction RSS Feed

Yes, construction defects are covered “occurrences” in New Jersey

Are you the parent of a teenager?  Have you ever been the parent of a teenager? If the answer to either of those two questions is yes, have you ever felt like you’re banging your head against the wall? You think you’re speaking plain English, but they’re just not getting it. That’s the way I … Continue Reading

Enforcing insurance coverage for “intentional” torts

I have in my office a copy of a Travelers claims manual from the 1980s. In discussing the duty to defend, the manual says, in part: “Ambiguity…means that the words are capable of being understood in two or more reasonably logical ways. Ambiguity should be resolved in favor of the insured. Prompt decisions must be … Continue Reading

A potential business insurance coverage trap: the Professional Services Exclusion

When my daughter was little, we loved putting jigsaw puzzles together. We would dump the pieces on the floor and spend hours trying to figure out how they fit. Sometimes there would be a “gap” in the puzzle, and we’d eventually get frustrated and assume that we were missing a piece. But somehow, the missing … Continue Reading

Is “occurrence” an ambiguous term?

There’s a famous (apocryphal?) story about Cato the Elder, one of the leaders of ancient Rome.  Cato was obsessed with destroying Carthage (now Tunis), the Roman Empire’s rival. He would end every speech (and apparently most conversations) with “Carthago delenda est” – Carthage must be destroyed.  The story goes that when Demosthenes (a prominent Greek … Continue Reading

Enforcing insurance coverage for “intentional” business torts

The other day, I was talking with a lawyer who represented a plaintiff in litigation relating to a failed business transaction. He was lamenting the fact that, if he were to take judgment against the defendants, there wouldn’t be insurance to help satisfy the claim, since, according to him, “no insurance company is ever going … Continue Reading

Beware the Strict Interpretation of Notice Provisions in Claims-Made Policies

A few years back, a major financial institution retained us to review its insurance coverage program. After checking the main items I usually look for, I asked the Risk Manager whether the heads of the organization’s various business units knew the basics of the notice provisions in the company’s major coverages. I could see her … Continue Reading

Recent Developments in Business Interruption Claims

Arnold Palmer once described golf as “deceptively simple and endlessly complicated.”  That’s a good description for insurance also.  (Fortunate for me, since I get paid to figure it out.)  Given the rules of construction, ambiguities (even latent ambiguities) in insurance policies are supposed to be construed against the carrier. I’ve therefore always wondered why the … Continue Reading

Can an insurance company depreciate labor costs in determining actual cash value?

Years ago, there was a comedy ensemble variously called “The Dead End Kids,” “The East Side Kids,” and, finally, “The Bowery Boys.”  (They were made famous in the 1938 Cagney/Bogart film, “Angels With Dirty Faces.”)  The protagonist of the group was a character named “Slip” Mahoney, played by the actor Leo Gorcey. Slip would routinely … Continue Reading

Beware the differences between indemnity agreements and insurance policies

I used to know a guy who worked for a major, nationally known public adjustment company.  In years where there were no major hurricanes or tornado incidents, he would literally walk around looking like he had the weight of the world on his shoulders. He never overtly wished death or destruction on anyone (as far … Continue Reading

Insurance Coverage for Premises Liability

I admit it, I admit it –  I’m addicted to the TV show “Bar Rescue.” (When my daughter was about 12 years old, and my wife was out shopping for the day, we once binge-watched about six hours straight, which probably could get me into trouble with the child welfare authorities.)   The idea of the … Continue Reading

The Illegal Acts Exclusion and “Entrustment” of Property

There’s an excellent, but sad and haunting, nonfiction book written by Jeff Hobbs called  “The Short and Tragic Life of Robert Peace.”  It’s about a kid who grew up among poverty, gangs and tough guys in a rough section of Newark, but who was naturally gifted and ended up at Yale. Unfortunately, he couldn’t outrun … Continue Reading

Direct Actions against Insurance Companies

Labor Day has just passed as I write this, and this summer (that went by too quickly) was a busy one for the New Jersey appellate courts, insurance-wise.  The New Jersey Supremes, for example,  dealt with a question often posed by our clients in construction defect cases: Namely, can a claimant proceed directly against a … Continue Reading

More developments in insurance coverage for construction defects

Back in the days of the environmental insurance coverage wars, we on the policyholder side argued (eventually successfully in New Jersey) that the word “sudden”, as used in the 1973 version of the pollution exclusion, meant “unexpected” and did not have a temporal connotation. My friends in the defense bar often criticized us for trying … Continue Reading

Insurance coverage for construction defects

The ongoing battles over construction defect coverage remind me of the good old days in the ‘80’s and ‘90s when we used to fight over asbestos and environmental coverage claims (we still have some of those claims, but to a much lesser extent). Construction defects even involve battles over the appropriate trigger of coverage!  Ah, … Continue Reading

Insurance Coverage for Alleged Intentional Harm

I’ve sometimes commented on this blog that my first boss in the business warned me: “If you assume there’s no coverage, you won’t find any.” There are plenty of risk managers and brokers who believe that general liability insurance coverage exists primarily to protect against people falling down in the parking lot. Not suprisingly, many … Continue Reading

“Ordinance or Law” Coverage for Costs of Repair

I was saddened to learn that Judge Ruggero Aldisert, formerly of the Third Circuit, recently passed away.  I never had the privilege of appearing before Judge Aldisert, and I never met the man, but I feel indebted to him for writing two excellent books that were published through NITA:  “Logic for Lawyers” and “Winning on … Continue Reading

Calculating Business Interruption Damages

When I was in college, there was an English professor named Frank Kinahan, who taught a class called “The Little Red Schoolhouse.”  A lot of my fellow students (not me, of course!) apparently thought that if they could just write their papers in enough of an arcane and convoluted manner, people (including their professors) would … Continue Reading

Additional Insured Coverage

Years ago, there was a Bell Labs facility behind my house, and on Sunday afternoons, the engineers (mostly Indian and Pakistani) would get together and play cricket on the large lawn. I watched the matches quite a bit, but I never could get a grip on the rules. Then a British friend told me that … Continue Reading

The Allocation of Defense Costs in Long-Tail Claims

The great CLE instructor Jim McElhaney, a Professor Emeritus at Case Western, used to tell the story of a “professional expert” testifying at trial on cross-examination.  The guy was apparently a kindly old gentleman with an Irish brogue, and also an engineer, and indeed made most of his money in the litigation game. “You’re a … Continue Reading

Construction Defects and the “Your Work” Exclusion

My old law partner Carl Salisbury is on the warpath against carriers’ efforts to escape construction defect coverage.  He has some interesting things to say about a recent pro-carrier South Carolina decision.  You can read Carl’s excellent blog post by clicking here.  (I promise not to call them “business risk” exclusions any more, Carl.)… Continue Reading

“Your Work” and the “Products-Completed Operations” Hazard

Here’s some advice I would give to anyone contemplating becoming a general contractor:  Don’t.   The liability insurance coverage picture is too muddy, and coverage for completed operations is too uncertain.  My secondary, and perhaps more realistic, advice: Review your subcontractors’ general liability coverage and make sure there’s adequate protection if you need to bring suit … Continue Reading