Category - Insurance

1
IMPORTANT ALERT: New California “Construction” Legislation
2
Share, But Be Aware: Growing Up with the Sharing Economy
3
CGL Exclusions Common to Construction-Related Claims
4
Pokémon Go: Green Light for Future Litigation
5
Distinguishing License Bonds From Insurance: The Contours of California Contractor License Bonds
6
Don’t Fall Into the Hole: Potential Exposures for Construction Owners
7
Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal
8
Cover Me
9
An Additional Insured’s Reasonable Expectations may be Different from the Named Insured’s and Must be Considered to Determine whether the Additional Insured is Entitled to Defense from the Insurer of a Commercial Excess & Umbrella Liability Policy
10
An Insurer Cannot Rely Satisfaction of a SIR as a Prerequisite to Defend its Insured Unless the Policy Language Expressly Sets Forth in Clear and Unambiguous Terms that the Defense is Conditional on Satisfaction of the SIR

IMPORTANT ALERT: New California “Construction” Legislation

By: Richard H. Glucksman, Esq. and Chelsea L. Zwart, Esq.
October 2, 2018

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Governor Jerry Brown signed two potentially impactful Senate Bills relating to the construction of apartment buildings late last month.  These Bills, discussed further below, were introduced, in part, in response to the Berkeley balcony collapse in June 2015, which was determined by the California Contractors State License Board to be caused by the failure of severely rotted structural support joists the repair of which were deferred by the property manager, despite indications of water damage. 

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Share, But Be Aware: Growing Up with the Sharing Economy

By: Richard H. Glucksman, Esq. and Chelsea L. Zwart, Esq. in collaboration with Bob Wright, property broker with AmWINS Insurance Brokerage of California in San Francisco.
June 20, 2017

Published by AmWINS – Download Article

Most, if not all of us remember being told, “Don’t talk to strangers,” while we were growing up. In today’s economy, that rule has become a distant memory. In the sharing economy, millions of people daily rely entirely on strangers to provide services and goods to them through various online platforms.

For example, a visitor to a metropolitan city can rent a stranger’s house through Airbnb, be driven around the city by an Uber driver or rent a fellow vacationer’s car through Getaround, have their laundry picked up at their door, washed, and returned within 24 hours by Rinse, and get their meals delivered by a GrubHub driver or have a stranger grocery shop for them through TaskRabbit, all while their dog is boarded at a stranger’s house instead of a kennel back home. Not to mention that the vacation was paid for by a peer-to-peer loan via LendingClub.1

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CGL Exclusions Common to Construction-Related Claims

By: Dominic J. Fote
Published by AmWINS Group, Inc.

The Commercial General Liability policy (CGL) is an essential factor in the equation that consists of building planning, financing, construction, operation, and protection from risk. While its coverage potential is determined by claim professionals and insurance coverage counsel daily throughout the country, it is useful to step back and consider application examples of some of the standard form’s most prominent provisions. The following is a primer on three of the CGL form’s exclusions which most commonly come into play in the world of construction defect claims.

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Pokémon Go: Green Light for Future Litigation

By: Zachary P. Marks
September 30, 2016

Though it debuted to the public just two months ago, Pokémon Go, the latest gaming craze to sweep the nation, broke mobile app download records within one week of its release and achieved more daily active users than any other game on the market.  The game allows users to see animated creatures, known as Pokémon, on their cell phones while the user traverses the real world, with the goal being to “catch” as many Pokémon as possible.  The viral phenomena has already led to numerous claims and violations across the nation, with some bizarre examples to include the following:

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Distinguishing License Bonds From Insurance: The Contours of California Contractor License Bonds

By: Ravi R. Mehta
September 30, 2016

A commonly overlooked potential for recovery when a claim arises is the license bond.  Distinct from insurance, a license bond is intended to respond to liability related to a contractor’s violation of Contractors State License law.  It is mandatory for all California contractors to procure a license bond, or alternatively to place a cash deposit with the Contractors State License Board (“CSLB”). The license bond requirement is currently $15,000.00.  However, in the event of license suspension or revocation, the CSLB may require a separate disciplinary bond in an amount between $15,000.00 and $150,000.00. The types of claims to which a license bond may be subject, as well as the types of persons who are eligible to submit a claim against a license bond, are limited.  However, if a claimant’s circumstances fit within the confines of the following limitations, a license bond claim may be better suited to provide redress as compared to an insurance claim.  The following list contains the most common types of allowable license bond claims.

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Don’t Fall Into the Hole: Potential Exposures for Construction Owners

By: Grace A. Nguyen
Published by AmWINS – Download Article
June 9, 2016

As always with construction projects, it is important that owners of new developments understand insurance coverage to ensure that there is adequate insurance to address any potential risks during and after the construction of the project. While most owners maintain commercial general liability policies or rely on project-specific policies, these policies may not fully protect the owner against any and all risks that they may face during and after construction. This article addresses two unique areas in which owners should take special note to ensure that they are covered for these particular risks: third party action over claims and products-completed operations coverage.

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Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal

By: Ravi R. Mehta and Katherine J. Flores
May 10, 2016

In general, insurers are permitted to limit the risks they assume through provisions within the policy terms.  For example, many policies attempt to preclude coverage in instances where another insurance policy providing for defense is available to the insured. California courts generally disfavor these types of “other insurance” or “escape” clauses based on public policy concerns.  In two recent decisions, the California Court of Appeal found such clauses unenforceable.

In Underwriters of Interest Subscribing to Policy Number A15274001 v. ProBuilders Specialty Insurance, Co. (2015) 241 Cal.App.4th 721, Plaintiff, Underwriters of Interest Subscribing to Policy Number A15274001 (“Underwriters”), insured Pacific Trades Construction & Development, Inc. (“Pacific Trades”).  Additionally, ProBuilders Specialty Insurance Company (“ProBuilders”) insured Pacific Trades.

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Cover Me

The Transfer of Risk Through Express Indemnity does not Always Lessen Uncertainty when a Claim Arises

By: Daniel A. Cribbs and Ravi R. Mehta
November 30, 2014
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The transfer of risk through express indemnity does not always lessen uncertainty when a claim arises

Additional insured endorsements and express indemnity provisions are common risk transfer mechanisms, but they have generated uncommonly complex and difficult-to-reconcile judicial holdings. Litigation concerning priority-of-coverage disputes that include consideration of the vertical and horizontal exhaustion doctrines is necessarily complex, but it is part of an evaluation of the risks, rights, and obligations of clients engaging in commercial contracts. Courts must consider the insurance policies of the parties as well as the agreements between the insureds to determine the order in which each party’s policies must respond to a given loss. As one court has observed, “[E]stablishing a pecking order among multiple insurers covering the same risk…has been characterized as ‘a court’s nightmare.…’”1

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An Additional Insured’s Reasonable Expectations may be Different from the Named Insured’s and Must be Considered to Determine whether the Additional Insured is Entitled to Defense from the Insurer of a Commercial Excess & Umbrella Liability Policy

Transport Insurance Company v. Superior Court (2014) 222 Cal.App.4th 1216.

By: Richard H. Glucksman, Jon A. Turigliatto, and Kacey R. Riccomini
June 4, 2014

The Second District Court of Appeal’s recent decision, Transport Insurance Company v. Superior Court (2014) 222 Cal.App.4th 1216, immediately affects builders and contractors (collectively “builders”) who are often named as additional insureds (AIs) to contractors’ general liability policies. The decision is an important tool for builders’ counsel because the builder’s reasonable expectations can alter the interpretation of ambiguous terms in policies issued to subcontractors. Essentially, the builder’s intent is relevant to the interpretation of policy terms because the subcontractor’s intent in requesting additional coverage depends on the agreement it made with the builder. The salient aspects of the facts, the Appellate Court’s reasoning, and practical considerations are discussed below.

Transport Insurance Company (Transport) issued a commercial excess and umbrella liability policy (Policy) to Vulcan Materials Company (Vulcan), naming R.R. Street & Co., Inc. (Street) as an AI for its distribution of a solvent. The Policy provided that Transport would indemnify and defend the insured for loss caused by property damage if (1) it was not covered by “underlying insurance” but was within the terms of coverage of the Policy, or (2) if the limits of liability of the “underlying insurance” were exhausted during the Policy period due to property damage. The Policy included a Schedule of Underlying Insurance (Schedule) that listed policies issued to Vulcan. Thereafter, Vulcan and Street were named as defendants in several environmental contamination actions (Underlying Actions).

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An Insurer Cannot Rely Satisfaction of a SIR as a Prerequisite to Defend its Insured Unless the Policy Language Expressly Sets Forth in Clear and Unambiguous Terms that the Defense is Conditional on Satisfaction of the SIR

American Safety Indemnity Co. v. Admiral Ins. Co. 2013 WL 5397890 (Cal.App.4 Dist.)

By: Jon A. Turigliatto and David A. Napper
October 15, 2013

The Fourth District Court of Appeal held that a self-insured retention (“SIR”) in a commercial general liability policy does not necessarily excuse the insurer from providing a defense to an insured that had not first satisfied the SIR through payment of defense costs. The Court once again applied the well-establish principle that any limitation on the coverage provided by a liability insurance policy must be express and consistent with the reasonable expectations of the insured.

Following a landslide alleged to have resulted from grading deficiencies, homeowners sued several defendants, including the developer and the grading contractor. The developer was insured by Admiral Insurance Company (“Admiral”) and the grader was insured by American Safety Indemnity Company (“ASIC”). The developer was named as an additional insured on the ASIC policy and tendered its defense to ASIC. ASIC initially declined to defend. But after the developer sued for bad faith, ASIC agreed to defend the developer and its related entities (collectively “Developer”).

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