Claims And Issues

GEORGIA ON MY MIND THREE TIMES: NATIONAL RULES WIN.

          In a recent decision, Georgia law as applied in that case matched national rules and decided the outcome.  First, an Insurer could not both deny a claim for defense and attempt to reserve the right to assert a different defense in the future.  Bank of Camilla v. St. Paul Mercury Insurance Co., 2013 WL 1333519 *5 (M.D. Ga. March 29, 2013).

           In that case, the Federal Court held that the Insurer did not deny a claim for defense.  It was instead a claim for advancement of defense costs which were not covered, and so there was no breach of contract when the Insurer did not advance those defense costs.

           Second, defense coverage depends only on the allegations of  the underlying liability complaint.  Bank of Camilla v. St. Paul Mercury Insurance Co., 2013 WL 1333519 *9 (M.D. Ga. March 29, 2013).

           In this case, the Federal Court held that the allegations of the ULC did not trigger defense coverage.

           Finally, since there is no Coverage in this case, the Federal Court concluded that not only the breach of contract claims should be dismissed, so should the claims for alleged Bad Faith be dismissed as well.  Bank of Camilla v. St. Paul Mercury Insurance Co., 2013 WL 1333519 *11 (M.D. Ga. March 29, 2013).

 

          Please Read The Disclaimer.

INSURANCE COMPANY'S LETTER SAYING "EXCESS" IS NOT A DENIAL, SAYS ILLINOIS DCA.

          A District Court of Appeal in Illinois holds that a letter from a First-Party Insurance Carrier to its Insured which says that the Carrier's Coverage is "excess" to the Coverage of another Carrier because of their competing "other insurance" clauses, is not a denial of Coverage.  Burress-Taylor v/ American Security Insurance Co., 2012 Ill. App. (1st) 110554, 980 N.E.2d 679, 685-86 ¶¶ 20 & 21, 2012 WL 5292848 *5 ¶¶ 20 & 21 (Ill. 1st DCA October 26, 2012)("Nothing in the letter indicates that plaintiff's claim was denied....  At most, the letter apprises plaintiff of the status of her claim and the policy's limits.  This is not tantamount to a denial.").

Please Read The Disclaimer.

Disclaimer Letters and Catch-Alls: No Waiver? Prejudice?

     Disclaimer Letters usually end with a 'catch-all' sentence.  It follows a list of specific reasons why the Insurance Company has concluded there is no Coverage for a claim.  The catch-all sentence usually goes something like this:  'Nothing in this letter nor any investigation undertaken by or for the Insurance Company waives or is intended to waive any rights of any of the parties to the Insurance Policy.'  Ever wonder why Disclaimer Letters have that language, or if this language is any good to actually stand up against a claim of waiver because a provision in the Policy was not specifically mentioned in the Disclaimer Letter?

     In a recent decision, a Federal Court in New York has held that similar language in a Disclaimer Letter allowed a Business Owners Property Insurance Company to deny Coverage for a reason that the Insurance Company did not mention in its Disclaimer Letter.  Not only did the Insurance Company not mention the particular Policy provision in its Disclaimer Letter, but the applicability of the provision apparently came to light for the first time in the lawsuit that was filed by the Policyholders against the Insurance Company after it disclaimed all coverage.  Here is a link to the Official Report:  Dalton_v. Harleysville Worcester Insurance Co. (E.D.N.Y. Case No. 05.CV.2020, Opinion Filed July 23, 2007).pdf.  This decision is also accessible by subscription at 2007 WL 2120403.   A Notice of Appeal was filed on August 16, 2007 and an appeal is apparently still pending in this case.  Here is what happened in the Trial Court.