Here’s a question that perhaps should be posed to a magician: How can an insurance company turn an $85,000 claim (on a policy with a $100,750 applicable limit) into an $850,000 bad faith verdict? If you’re Merrimack Mutual, apparently it’s quite easy.
I wrote about this case some time ago when the jury verdict first…
One of the issues that frequently comes up in complicated third-party cases is: How far outside the underlying complaint does the carrier have to go to determine whether coverage exists? New Jersey is not an “eight corners” state (in which all the court considers is the four corners of the policy and the four corners…
Here’s an interesting question recently confronted by the Ninth Circuit: Is it bad faith for an insurance company to refuse to initiate settlement discussions in a third-party context when liability has become reasonably clear? The carrier (Deerbrook, an Allstate company) took the position that bad faith could not exist unless the carrier failed to…
Let’s say you own a factory building. Construction activity on an adjacent lot causes damage to the structure. You have the standard first-party property insurance policy providing coverage for “direct physical loss or damage,” and the policy gives the carrier the option of paying either the “cost of repair” or “loss of value.” If the carrier…
When I started in this business at Anderson Kill back in the 1980s (when the firm was still Anderson Russell Kill & Olick, P.C.), junior lawyers (including me) would do anything, and I mean anything, to keep from sliding into the abyss known as the Insurance Coverage Group. Who wanted to while away his or…
Those of us who represent contractors in coverage disputes have had to wrestle a lot over the past few years with so-called “business risk” exclusions, such as the “your work” and “your product” exclusions. Cynicism may be unhealthy, but the cynic in me says that insurance companies are twisting these exclusions far beyond their intended…
The New Jersey Law Journal reports that defense contractors’ employees who worked in Iraq and Afghanistan are suing Prudential Insurance, alleging that it sold policies without disclosing that war-zone deaths and injuries were not covered.
The policies, sold to civilians at U.S. military bases overseas, were worthless as a result, the plaintiffs charge in Menkes …
Here’s an interesting situation that recently came up. A general contractor (Aristone) got sued in a construction defect case involving continuous water damage to a building over several policy periods, involving several insurance companies. One of Aristone’s carriers – OneBeacon – stepped up to provide a defense. Another – Pennsylvania Manufacturers – took a “no…
Asbestos defendants who file for reorganization under the U.S. Bankruptcy Code and seek to establish a personal injury trust for the payment of claims may transfer their liability insurance recovery rights to the trust even if the insurance policies include provisions barring the transfer of such rights, the U.S. Court of Appeals for the Third…
Here’s a fairly common circumstance in large commercial liability claims. A policyholder settles with the carrier in Layer 1 for less than its limits, leaving a gap between Layer 1 and the next layer up. Does the carrier in Layer 2 then have an obligation to contribute to settlement with the underlying plaintiff?
Example: I…