Florida Property Insurance Reform Round Three Brings Big Changes

Posted on June 01, 2022 by Chad A. Pasternack, John David Dickenson

For the third time since 2019, the Florida Legislature has enacted broad property insurance reforms with the goal of stabilizing the insurance market and curbing litigation filed by unscrupulous contractors. The bill, S.B. 2D, creates a reinsurance program, amends certain prohibited advertisement practices for contractors, permits issuance of personal lines policies with separate roof deductibles, and reigns in property insurance bad faith litigation and litigation by assignees. In this article, we will focus on the statutory changes that affect the handling and litigation of property insurance claims.

About The Authors

Tagged with: 624.1551, 627.428, 627.70152, AOB, attorney's fees, Bad Faith, Florida, Insurance, property
Posted in Uncategorized

New York Court Holds Coverage for Excavation Damage Precluded by Earth Movement Exclusion

Posted on May 04, 2022 by Alycen A. Moss, Elliot Kerzner

According to a recent ruling by a New York appellate court, coverage for excavation damage is precluded by the policy’s earth movement exclusion. In 3502 Partners LLC v. Great American Insurance Co. of New York, Case No. 2021-03449 (N.Y. App. 1st Dep’t Apr. 21, 2022), an insured sued its insurer under a first-party policy, alleging in its complaint that its property sustained damage as a direct result of excavation work at an adjacent lot.

About The Authors

Tagged with: 3502 partners, anti-concurrent causation, earth movement exclusion, excavation, Great American Insurance, man-made, New York, vibration
Posted in Uncategorized

Accepting Coverage for Part of a Claim May Subject an Insurer to the Appraisal Process Under Tennessee Law

Posted on April 11, 2022 by Elliot Kerzner, Alycen A. Moss

Accepting coverage for part of a claim may subject an insurer to a policy’s appraisal process when the extent of covered damage is in dispute, according to a recent ruling issued by the Eastern District of Tennessee. In Morrow v. State Farm Fire & Cas. Co., Case No. 1:21-CV-00133-DCLC-CHS, 2022 WL 885863 (E.D. Tenn. Mar. 22, 2022), a severe storm with strong winds and tornadic activity damaged the insured’s home in Manchester, Tennessee. After the storm, the insured promptly reported the damage to her home to her insurer. The insured’s policy covered direct physical loss to her home, other structures on her property, and her personal property. The insurer acknowledged that the damage to the insured’s home was covered under the policy and made a payment, following its own estimate of the damage, for her loss. The insured, however, alleged that the insurer failed to determine the actual cost of the damage to her home. She informed the insurer that its payment was insufficient to cover all of the damage and restore her home to its condition before the storm.

About The Authors

Tagged with: amount of loss, appraisal, Coverage, estimate, Morrow, state farm, Tennessee
Posted in Uncategorized

NY Appellate Court: Covid-19 Business Losses Don’t Constitute “Physical” Damage to Property, Don’t Trigger Commercial Property Policies

Posted on April 8, 2022 by Farrell Miller

Covid-19 may cause businesses to be unable to use their property, but loss of use doesn’t constitute the “direct physical loss or damage” necessary to trigger commercial property insurance coverage, according to a first-of-its kind New York appellate court decision issued Thursday.

About The Author

Posted in Uncategorized

Ninth Circuit Finds that “Subsidence Exclusion” Bars Coverage for Landslide Loss

Posted on March 29, 2022 by Dina R. Richman

The Ninth Circuit Court of Appeals recently issued an unpublished opinion in Atain Specialty Insurance Company v. JKT Associates, Inc., Case No. 20-16366 (9th Cir., March 11, 2022), finding that a liability policy’s “Subsidence Exclusion” barred coverage for a lawsuit arising out of a landslide.

About The Author

Tagged with: earth movement, landslides, liability insurance, property insurance, subsidence
Posted in Uncategorized

Renewal of Property Policy Requires Living Insured

Posted on March 23, 2022 by Elliot Kerzner, Alycen A. Moss

A policy renewal requires a living insured to form a valid insurance contract, the Sixth Circuit recently ruled. In Boby Davis, et al. v. Westfield Ins. Co., Case No. 21-2797 (6th Cir. Mar. 14, 2022), Della Shields received a yearly homeowner’s insurance policy covering her home in Muskegon, Michigan from 2013 until her death in March 2018. Shields was the sole named insured in the yearly policy declarations.

About The Authors

Tagged with: boby davis, death, estate, fire, insurance contract, loss, property insurance, renewal, shields, void, westfield
Posted in Uncategorized

True, False, or Simply Wrong? Florida Courts Disagree About Whether ‘False Statements’ Must Be Intentional

Posted on February 14, 2022 by Chad A. Pasternack

A Florida appellate court recently interpreted a “Concealment or Fraud” provision that voids coverage where an insured makes “material false statements” as requiring intentional deception, extending the split amongst the Florida appellate courts. In Vargas v. SafePointe Ins. Co., No. 3D19-1656, 2022 WL 108428 (Fla. 3d DCA Jan. 12, 2022), a homeowner reported a water loss to her property insurer following a plumbing leak. The insurer immediately requested repair invoices from prior claims and photographs of the pre-loss condition of the property. The homeowner, however, never provided this information. Instead, she submitted a sworn proof of loss with an itemized estimate.

About The Author

Posted in Uncategorized

Second Circuit Holds No Coverage for COVID-19 Business Interruption Losses

Posted on January 19, 2022 by Elliot Kerzner, Alycen A. Moss

The Second Circuit has now joined the Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits in holding that no insurance coverage exists for business interruption losses caused by the Covid-19 pandemic and the associated government orders. In 10012 Holdings Inc. v. Sentinel Insurance Co. Ltd., No. 21-80-cv, Slip. Op. (2d Cir. Dec. 27, 2021), the insured fine arts gallery and dealership in New York City sought coverage under three provisions of its insurance policy for losses and extra expenses incurred when it suspended its operations in accordance with government restrictions on non-essential businesses during the Covid-19 pandemic. When the insurer denied coverage, the insured filed suit asserting claims for breach of contract and declaratory judgment. The United States District Court for the Southern District of New York dismissed the claims with prejudice, and the insured appealed to the United States Court of Appeals for the Second Circuit.

About The Authors

Tagged with: 10012 Holdings, arts gallery, business interruption, civil authority, Coverage, New York, second circuit, Sentinel Insurance
Posted in Uncategorized

Major Victories for Insurers in Fifth Circuit Regarding COVID-19 Business Interruption Claims

Posted on January 7, 2022 by Karl A. Schulz

The Fifth Circuit Court of Appeals has joined seven other Circuits in finding no coverage for COVID-19 business interruption claims.[1] In Terry Black’s Barbecue, L.L.C. v. State Auto. Mut. Ins. Co., 2022 U.S. App. LEXIS 287 (5th Cir. Jan. 5, 2022) and Aggie Invs., L.L.C. v. Continental Cas. Co., 2022 U.S. App. LEXIS 393 (5th Cir. Jan. 6, 2022), the Fifth Circuit considered claims under all-risk policies. In Terry Black’s Barbecue, the policy included provisions for loss of business income and extra expense. To trigger such coverages, the policy required that the suspension of operations “must be caused by direct physical loss of or damage to property at the premises.” The policy’s definition of “period of restoration” was the period of time that begins at the time of loss or damage and ends when the property is “repaired, rebuilt or replaced” or when operations resume at a new location. Further, the policy contained a restaurant extension endorsement providing civil authority coverage “resulting from the actual or alleged … exposure of the described premises to a contagious or infectious disease.”

About The Author

Tagged with: business interruption, civil authority, covid-19, extra expense, Insurance
Posted in Uncategorized

Seventh Circuit Continues String of Insurer Victories in COVID-19 Business Interruption Litigation

Posted on December 21, 2021 by Karl A. Schulz

At least five Circuit Courts of Appeal have now come out in favor of insurers in COVID-19 business interruption lawsuits.[1] The latest is the Seventh Circuit Court of Appeals in Sandy Point Dental, P.C. v. Cincinnati Ins. Co., 2021 U.S. App. LEXIS 36399 (7th Cir. Dec. 9, 2021). The Court in Sandy Point resolved three claims in one opinion under Illinois law. The three plaintiffs were a dentistry practice, a hotel, and restaurant. Each business was allegedly impacted by orders issued by Illinois’ governor to stem the spread of COVID-19.

Each of the businesses’ policies included a familiar coverage threshold of a “suspension” caused by direct physical “loss” to property at a premises caused by or resulting from a Covered Cause of Loss. “Loss” was defined in the policies as “accidental loss or damage.” The Court observed that by “incorporating the stated definition of ‘loss,’ the [b]usinesses were covered for income losses resulting from direct physical loss or direct physical damage to property. Thus, to survive [the insurer’s] Rule 12(b)(6) motion, they needed to allege that either the virus or the resulting closure orders caused direct physical loss or direct physical damage to covered property.”

About The Author

Tagged with: appellate court business income, business interruption, civil authority, covid-19, extra expense, ingress, physical loss or damage, SARS-CoV-2, suspension
Posted in Uncategorized