Last week, in Pichel v. Dryden Mutual Ins. Co., — N.Y.S. 2d —, 2014 WL 1923736 (May 15, 2014), an intermediate level appellate panel in New York brought the state into line with the interpretation of water backup adopted by a number of other jurisdictions. The decision held that policy references to a “plumbing system” mean the plumbing system on the insured premises itself. As a result, a loss caused by water which backs up through sewers and drains is covered if the overflow originated within the insured’s property but excluded if the backup originated off site, as from a clogged municipal sewer system for example. The policyholder owned an apartment complex that was insured by Dryden Mutual. The structure…
Monthly Archives: May 2014
Third Circuit Says No to Insured’s Request for Reserve Information
In a victory for insurers, the United States Court of Appeals for the Third Circuit recently rejected an insured’s discovery request for reserve information in a first-party bad faith action. In its April 29, 2014 decision in Mirarchi v. Seneca Speciality Insurance Company, — Fed.Appx. —, 2014 WL 1673748 (3d Cir., April 29, 2014), the Court of Appeals upheld the district court’s denial of the policyholder’s request for the reserves and, in doing so, endorsed the numerous district court decisions that have previously held such information to be non-discoverable. In Mirarchi, a fire damaged the insured’s property. The insurer paid the entire undisputed amount, and the parties proceed to appraisal on the remainder of the claim. An umpire entered an award close…
Congress Moves Towards Reauthorization of TRIA
Congress returned last week from an extended spring recess with few legislative days left on the calendar before the mid-term elections and a long list of must-do legislation. One piece of legislation that seems certain to get attention will be a bill reauthorizing the Terrorism Risk Insurance Act (TRIA). In testimony presented over the last year before committees in the House of Representatives and the Senate, insurance industry representatives have made it clear that the federal backstop provided under TRIA is still relevant and essential to ensuring that terrorism risk insurance is both widely available and affordable. This has led to bipartisan and bicameral support for a reauthorization of TRIA that now seems certain to happen. Only two questions remain:…
