Insurance Online : Additional Insured Not Entitled to Reimbursement of Defense Costs Paid by Other Insurers

   Con Edison ("Con Ed") was unsuccessful in arguing for defense costs that had already been paid by other insurers. Consol. Edison Co. of N.Y. v. Lexington Ins. Co., 2015 U.S. Dist. LEXIS 121573 (S.D. N.Y. Sept. 9, 2015).    Team, Inc. was under contract with Con Ed to provide repairs to the steam system running below the streets of New York City. The contract required Team to indemnify Con Ed for all claims resulting from personal injury or property damage connected to Team's work. Team also obtained a CGL policy naming Con Ed as an additional insured. The policy was to provide primary coverage. Any insured was responsible for the first $250,000 of costs for investigation and/or defense.    On July 1, 2007, a steam distribution main, on which Team had finished working, ruptured, creating a huge crater and sending steam and debris, including asbestos insulation, into the surrounding area. The rupture caused substantial damage to nearby buildings, vehicles and underground infrastructure. It also caused personal injury, including two individuals in a tow truck that fell into the crater and a woman who suffered a fatal heart attack while running from the explosion.     Forty-five lawsuits were filed against Con Ed. Con Ed notified Team, and Team provided notice to Lexington. Team refused to defend or indemnify because Con Ed's negligence caused the explosion.     Lexington conducted an investigation and issued a reservation of rights letter on October 6, 2008, agreeing to provide a defense. Nevertheless, Con Ed did not permit Lexington to defend the lawsuits. Con Ed retained its own outside counsel and had in-house counsel do some of the work. Con Ed did not comply with Lexington's request for copies of complaints and defense cost invoices. Lexington made requests for information in October 2008, July 2009 and March 2010. Con Ed did not provide Lexington with information until July 21, 2011.     During those years, Con Ed had over $50 million in legal fees. But other insurers paid these defense costs. The first layer of excess coverage was triggered when Con Ed satisfied a self-insured retention of $5 million. The excess carrier then paid over $35 million in defense costs. The second layer of excess coverage then began paying defense costs, which eventually totaled over $17 million.    Neither excess layer reimbursed Con Ed for the $5 million self-insured retention nor for the cost of Con Ed's in-house counsel. On May 4, 2011, Lexington paid its policy limit of $2 million to Con Ed. Lexington was released from liability for defense costs incurred from and after the date of release, but Con Ed retained the right to reimbursement for reasonable defense costs incurred in connection with the claims and litigation.    Con Ed then sent Lexington defense invoices for $4.7 million for defense costs in 2007. Con Ed later sent invoices for 2008 ($9.5 million), 2009 ($4 million), 2010 ($4.1 million), and 2011 ($2.5 million). Lexington refused to pay on these invoices.    Suit was filed and Lexington moved for summary judgment, seeking to dismiss Con Ed's claims for any defense costs that were reimbursed by the excess carriers. Lexington also sought summary judgment for the rest of Con Ed's unreimbursed out-of-pocket defense costs.    The court granted summary judgment to Lexington on reimbursement of defense costs already reimbursed. An insured could not obtain reimbursement for defense costs from one insurer that had already been reimbursed by another insurer. Con Ed had not been damaged and had no claim for reimbursement from Lexington.    The court also granted summary judgment to Lexington on the $5 million in self-insured retention and the costs of Con Ed's in-house counsel. The Lexington policy had a "voluntary payments" provision stating that the insured could not make any payment without the insurer's consent.Although Lexington did not raise this issue as an affirmative defense, Con Ed failed to plead a claim for these costs in its complaint. It was too late for Con Ed to amend. 

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Insurance Online : Betcha Didn’t Know …

Home insurance policies can be confusing, and sometimes there’s coverage for things you might not expect. Similarly, sometimes there can be exclusions you don’t expect. Let’s go over a few of the nuances of standard home and auto policies.

On the home side

You probably know that a standard home insurance policy protects you if your home is damaged by wind, fire and hail. But did you know that a standard policy usually also protects you from the following:

Planes and automobiles
Yep, you might not worry too much about an airplane crashing into your house. But if one does, you’re likely covered for the damage it causes. Your policy typically would pay for damage to the house and other structures on your policy and your possessions – clothes, electronics, furniture, and so on. It also probably would pay for additional living expenses if you’re displaced while repairs are being made.

It’s probably more likely that a car could crash into your house, particularly if you live on a sharp curve. And yes, you’re also covered for this.

Meteors
You read that right. You’re covered in case a meteor or other space debris hits your house.

Riot
Again, the prospect of a riot in your subdivision in the ‘burbs might not seem that likely. But whether one breaks out there or in a city setting, you’re covered.

Explosion
Chances are, there’s never been an explosion at your house. But you can rest assured that if there is one, it’s typically covered by home insurance. Again, you could receive compensation, up to your policy limits, for damage to the structure of your house, other buildings on the property and your possessions and for additional living expenses if you’re displaced for repairs.

What’s not covered
Hold on a minute! There’s one situation in which damage from an explosion definitely wouldn’t be covered. Your house is not protected if there’s damage from an act of war. And terrorism? There’s no definitive answer on that – providers often consider terrorism as an act of war; the courts haven’t given a final answer.

You probably know that floods are not covered by standard home insurance. You might not know that the following aren’t covered: Structures used for business, personal aircraft kept on your property, losses caused by power failure, water backup, the property of any boarders who aren’t related to you, earthquakes, or sinkholes.

Don’t get taken for a ride

The situation is a bit more complicated – imagine that – for auto insurance. There’s really no such thing as a standard policy – states have different requirements and policies can be heavily customized. But for the purposes of this post, let’s say a typical policy would include personal and property liability coverage, uninsured/underinsured motorist protection, medical payments coverage, and collision and comprehensive protection.

You’re probably covered, up to your policy limits, for the following:

• Hit and run. This is where your uninsured/underinsured motorist coverage comes in.
• You can use comprehensive coverage for this – but you have to meet your deductible first.
• Flooding and earthquakes. Again, you can use your comprehensive coverage, and there’s a deductible.
• Missiles and explosion. Comprehensive coverage and deductible.
• Hitting an animal. You can see where this is going.

We’ll say it again. Comprehensive coverage is not required by your state, but your lender might mandate that you have it. Otherwise, it is optional.

What’s not covered
You’re not covered if you intentionally cause a wreck, or if you’re transporting people for a fee, or for Acts of War. War – uh – what is it good for? Absolutely nothing, when it comes to home and auto insurance.

We hope you’ll leave this post knowing more about your policy. Talk to an agent if you have further questions about coverage.

Photo credit for photo image: Flickr user/Mike Lewinski

 

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Insurance Online : Betcha Didn’t Know …

Home insurance policies can be confusing, and sometimes there’s coverage for things you might not expect. Similarly, sometimes there can be exclusions you don’t expect. Let’s go over a few of the nuances of standard home and auto policies.

On the home side

You probably know that a standard home insurance policy protects you if your home is damaged by wind, fire and hail. But did you know that a standard policy usually also protects you from the following:

Planes and automobiles
Yep, you might not worry too much about an airplane crashing into your house. But if one does, you’re likely covered for the damage it causes. Your policy typically would pay for damage to the house and other structures on your policy and your possessions – clothes, electronics, furniture, and so on. It also probably would pay for additional living expenses if you’re displaced while repairs are being made.

It’s probably more likely that a car could crash into your house, particularly if you live on a sharp curve. And yes, you’re also covered for this.

Meteors
You read that right. You’re covered in case a meteor or other space debris hits your house.

Riot
Again, the prospect of a riot in your subdivision in the ‘burbs might not seem that likely. But whether one breaks out there or in a city setting, you’re covered.

Explosion
Chances are, there’s never been an explosion at your house. But you can rest assured that if there is one, it’s typically covered by home insurance. Again, you could receive compensation, up to your policy limits, for damage to the structure of your house, other buildings on the property and your possessions and for additional living expenses if you’re displaced for repairs.

What’s not covered
Hold on a minute! There’s one situation in which damage from an explosion definitely wouldn’t be covered. Your house is not protected if there’s damage from an act of war. And terrorism? There’s no definitive answer on that – providers often consider terrorism as an act of war; the courts haven’t given a final answer.

You probably know that floods are not covered by standard home insurance. You might not know that the following aren’t covered: Structures used for business, personal aircraft kept on your property, losses caused by power failure, water backup, the property of any boarders who aren’t related to you, earthquakes, or sinkholes.

Don’t get taken for a ride

The situation is a bit more complicated – imagine that – for auto insurance. There’s really no such thing as a standard policy – states have different requirements and policies can be heavily customized. But for the purposes of this post, let’s say a typical policy would include personal and property liability coverage, uninsured/underinsured motorist protection, medical payments coverage, and collision and comprehensive protection.

You’re probably covered, up to your policy limits, for the following:

• Hit and run. This is where your uninsured/underinsured motorist coverage comes in.
• You can use comprehensive coverage for this – but you have to meet your deductible first.
• Flooding and earthquakes. Again, you can use your comprehensive coverage, and there’s a deductible.
• Missiles and explosion. Comprehensive coverage and deductible.
• Hitting an animal. You can see where this is going.

We’ll say it again. Comprehensive coverage is not required by your state, but your lender might mandate that you have it. Otherwise, it is optional.

What’s not covered
You’re not covered if you intentionally cause a wreck, or if you’re transporting people for a fee, or for Acts of War. War – uh – what is it good for? Absolutely nothing, when it comes to home and auto insurance.

We hope you’ll leave this post knowing more about your policy. Talk to an agent if you have further questions about coverage.

Photo credit for photo image: Flickr user/Mike Lewinski

 

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Insurance Online : Testimony from Insureds' Expert Limited By Motion In Limine

   The court considered the scope of testimony to be offered by the insureds' expert regarding a policy written for sanitation districts. Binghamton-Johnson City Joint Sewage Bd. v. Am. Alternative Ins. Corp., 2015 U.S. Dist. LEXIS 112210 (N.D. N.Y. Aug. 25, 2015).   The city of Binghamton and the city's Sewage Board sued American Alternative Insurance Corporation (AAIC) for coverage for a collapsed wall. AAIC sought the limit to testimony of the insureds' expert, Paul B. Nielander, through a motion in limine.     AAIC argued that Nielander was not qualified as an expert in interpreting insurance policies. His knowledge and experience was limited to insurance practices in other states and the words contained in policies other than AAIC policies. He had no experience with (i) negotiating, drafting, or performing under an AAIC policy, (ii) handling claims or interpreting policies written in New York State,  or (iii) drafting policies or otherwise participating in what he conceded was a "niche market" of providing insurance to sanitation districts. Further, Neilander was not qualified to offer expert analysis of when the structural failure of the wall occurred because he had no training or experience as an engineer.    The court granted in part, denied in part, AAIC's motion in limine. Mr. Nielander's testimony would be limited to assisting the jury in (a) understanding the general standard practices and customs of the insurance business, (b) understanding how this particular policy was structured and how its provisions related to each other, and (c) understanding what any ambiguous terms in the policy were typically understood to mean in other insurance policies.     Mr. Neilander's testimony would otherwise be precluded. He would not be permitted to testify as to the usage of the terms "all risk," "ensuing loss" and/or "collapse" in standard insurance policies. Nor could he testify on how standard form ISO policies compared to the AAIC policy here. Further, he could not testify what the customs, practices or standards were in the industry of insuring sanitation districts. Finally, Mr. Neilander could not testify on when the structural failure of the wall occurred, or what the cause of the collapse was. 

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Insurance Online : Keep Your Belongings Safe in Storage

Over the years, you accumulate all sorts of possessions that have sentimental value – treasured holiday ornaments handed down through families, prized stamp collections that have been a hobby of yours since you were young, and photos and videos that preserve some of your favorite memories. These items must sometimes be stored in basements, attics, and/or storage units as it’s not always feasible to display them in your home.

However, storing these items can often leave them subject to damage from water or high temperatures. Here are a few tips for keeping your beloved belongings safe from these perils.

Invest in Reliable Containers

With the holiday season quickly approaching, you’ll be digging out decorations – for Halloween, Thanksgiving, Hanukkah, Christmas, New Year’s Eve, Valentine’s Day, Saint Patrick’s Day, etc. –  and storing one after another for the next few months.

Plus, storing important documents such as birth certificates, passports, Social Security cards, the deed to your home, a home inventory, and a copy of your insurance policy is a best practice. If you keep these items – along with photos and videos, you must make sure they’re stored properly.

Basements in particular are at risk for sump pump failures, bursting pipes, flooding, and so on. Severe weather and power outages only increase the probability of these events taking place.

Place your valuable items in sealed, waterproof containers and place them high on shelving units in your storage space – albeit not on a shelf against a concrete wall or one near an exterior door, which could leave your items vulnerable to leaks, humidity, and high temperatures. High temperatures can cause photos, documents, and decorations to stick together, leaving them susceptible to damage when you attempt to pull them apart.

Take the Safe Route

If you want to feel most confident in your method of storing valuable documents, opt for a safe. Some safes can be more resistant to high temperatures. Plus the lock-and-key or confidential combination aspect can keep you at ease knowing your valuables are secure from potential thieves.

If you choose this route, it’s still wise to place the safe on a higher shelf.

Consider Storing Valuables at Other Locations

If you’re too worried that your basement or attic could mean ruin for your treasured possessions, consider moving them to a storage unit or safe deposit box.

You can also upload photos and videos to websites like Flickr, which will allow them to always be accessed, even if the originals are harmed or destroyed.

Maintain Your Storage Space

Conduct annual inspections of your sump pump and check it when severe weather is rolling through your area to help prevent water damage to your basement. And keep an eye on the exterior of your abode so that you know when to replace roof shingles to protect your attic and its contents.

Make sure all storage areas are kept as clean as possible to keep pests from ruining important decorations and documents.

If your home insurance policy doesn’t include protection for your rare coin collection that you’ve stowed, call your agent and ask about upping your coverage limits or scheduling an endorsement.

Photo credit for preview image: Flickr user/Peter Dutton

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