Photo of Adrienne N. Kitchen

Following the February 3, 2023 derailment of 38 train cars carrying hazardous materials, resulting in a chemical spill and controlled burn in East Palestine, Ohio, several lawsuits have been filed seeking medical monitoring for people living in the affected areas.

Medical monitoring programs may allow for the early discovery and treatment of latent injuries even years after exposure to toxic substances, but such programs also present a substantial expense for any company. Medical monitoring claims may be covered by insurance, but coverage heavily depends on the underlying facts, policy language, and the law governing policy interpretation.Continue Reading Coverage issues for medical monitoring claims

On October 4, the California First Appellate District in Amy’s Kitchen, Inc. v. Fireman’s Fund Insurance Company, 2022 Cal. App. LEXIS 836, reversed a trial court’s order granting the insurer’s demurrer in a COVID-19 property damage claim, and remanded to allow the policyholder to amend its allegations of loss under a communicable disease coverage extension.  In so doing, the court applied correctly the pleading standards in California, and a process of careful evaluation of the policy language in context, existing physical loss or damage law in California, ultimately applying the clear language in the policy in a common sense manner.  The Amy’s Kitchen decision is important because it interpreted the policy in the way a reasonable layperson would read its language, focusing on the actual policy language, not terms of art defined by case law.  

The facts

Amy’s employs more than 2,500 people to manufacture meals at facilities in California, Oregon and Idaho.  As alleged in Amy’s complaint, COVID-19 was present at Amy’s locations because some of Amy’s employees had confirmed cases, prompting Amy’s to take measures to mitigate, contain, clean, disinfect, monitor and test for COVID-19.  Public health orders also required Amy’s to implement various measures, including decontamination, disinfection and sanitization of its facilities to continue operating.Continue Reading Amy’s Kitchen: A step in the right direction

Part II: exclusions, considerations, filing a claim, and tips

This is the second part of a two-part blog series titled, “Music to my ears: Insurance coverage for musical instruments”. Part I covers policy options.

Professional and amateur musicians alike can purchase insurance to cover their instruments.

Musical instrument policies are subject to exclusions and requirements, which may vary. Requirements under the policy are another important component.

Exclusions

Some common exclusions in musical instrument coverage include:

  • Wear and tear, inherent defect, deterioration, and vermin damage.
  • Breakage of strings, reeds, or drumheads while the instrument is being played.
  • Neglect, such as the failure to maintain or properly store the instrument.
  • Loss or damage during maintenance, repair, or restoration.
  • Humidity, aridity, or temperature extremes (unless caused by storm or fire); condensation; dampness; frost; dust; effects of sunlight; fading; and changes in color, texture, or finish.
  • The cost to obtain an estimate or quote to replace or repair the musical instrument.
  • Damage or loss while the instrument is in an unattended vehicle (though cover may be obtained, sometimes limited by the night-time clause, excluding coverage for loss or damage of instruments left in a car between 10 p.m. and 6 a.m. There may be no coverage without forced entry).
  • Transit by air, postal, or other delivery transit.
  • Costs as a result of being unable to use the musical instrument (which may be covered by business income loss coverage under a commercial policy).
  • Unexplained disappearance.
  • Intentional damage.
  • Damage due to pollutants.
  • Governmental or military action, war, and terrorism (though cover for terrorism may be purchased from some carriers as an endorsement for an additional premium).
  • Nuclear hazard.

Some exclusions may include anti-concurrent causation language, precluding coverage when the excluded cause of loss is involved, whether there are other causes or not. In particular, the nuclear hazard, war and military action, and pollution coverages may be excluded regardless of whether any other covered cause of loss is also present.

Other considerations

  • Valuation issues

Insurance carriers providing agreed value coverage require an appraisal for valuation purposes when they issue and/or renew a policy. Appraisals should be reviewed at renewal time, and they should be updated at least every three years. If the instrument is extremely rare, insurers may request their own appraiser prior to issuing coverage.

The value of the insured instruments may be determined at the time of loss or damage, even though an appraisal was required at the time of placement. The insurer may force the insured into arbitration or litigation regarding valuation. If your instrument is more than three years old, the policy should include new for old cover so you can get full replacement value.Continue Reading Music to my ears: Coverage considerations for musical instrument insurance (Part II of II)

Part I: Policy options

This is the first part of a two-part blog series titled, “Music to my ears: Insurance coverage for musical instruments”. Part II covers exclusions, considerations, filing a claim, and tips.

Musical instruments can cost significant sums running from a few hundred or thousand dollars to a million dollars or more. And that is to say nothing of the special bond musicians have with their instruments (the authors are both amateur musicians, and when the violist even thinks her viola has been bumped while in its case, she feels as though her own person has suffered injury). Professional and amateur musicians, as well as collectors of highly valued or rare instruments, may require or desire insurance to protect their instruments from loss or damage.

Instrument insurance covers the instrument, and usually covers accessories like bows, sheet music, cases, bags, and stands, unless specifically excluded. High-value accessories should be individually listed on the policy.

Musicians may need coverage if the instrument is used routinely for performances or teaching, or if it travels to school, work, lessons, rehearsals, or concerts. Collectors with expensive and rare instruments may want coverage. Professional musicians may need a commercial musical instrument policy (discussed below) to limit the time they spend without their instrument if it needs repair, if they need to rent a temporary instrument while repairs are made or if they need to purchase a new instrument.

Musical instrument coverage can be customized, with policyholders choosing the amount of coverage they need and the amount of the deductible. Musical instrument carriers, which may be specialty insurers, frequently divide instruments into categories, and coverage may also include electronic instruments, recording equipment, and electronic gear.

Some policies have a maximum amount they will insure per instrument. Commercial musical instrument policies provide several valuation options, such as payment for a claim based on an agreed-upon value determined when the policy is placed, the instrument’s value, or its replacement value at the time of loss.

Coverage counsel can assist with placement, review, and renewal for musicians, collectors, and ensembles, and if valuation or coverage disputes arise in the event the unthinkable occurs.

Musical instrument coverage for amateur musicians

Amateur musicians are those who play a musical instrument (or several), but who do not receive compensation for playing the instrument, including people learning to play an instrument, and those who play as a hobby alone or in a group. A musician who makes any income from his or her playing is not an amateur for coverage purposes and may require business insurance.

Some homeowner’s or renter’s policies cover musical instruments, but they are subject to some limitations. Frequently, they contain limits for the home’s total property damage and may have applicable per-item limits or sub-limits for musical instruments, which may be lower than the musical instrument’s value. Many only cover damages occurring while the instrument is in the covered residence. Even when there is off-premises coverage, that amount is limited to 10 percent of the policy’s dwelling coverage limit, which may not cover the loss. Homeowner’s and renter’s policies only cover damage from “named perils” such as fire and theft, but not for unnamed perils. Typically, such policies only provide actual cost value, so it can be difficult to receive compensation for the instrument’s replacement value.Continue Reading Music to my ears: Coverage considerations for musical instrument insurance (Part I of II)

Under standard property policies, insurers are broadly claiming that the pollution exclusion applies to bar coverage for losses caused by the COVID-19 pandemic. But the insurer in Essentia Health v. ACE American Insurance Company, which involved a Premises Pollution Liability Portfolio Insurance Policy, made the precise opposite argument. Essentia alleged that COVID-19 was a covered pollution condition, while ACE claimed that COVID-19 did not involve pollution. Essentia Health v. ACE American Insurance Company, No. 21-cv-207 (ECT/LIB) (D. Minn., May 25, 2021). Because Essentia turns the usual COVID-19 arguments upside down, it may provide helpful precedent for policyholders seeking coverage. In particular, ACE argued that a separate limitation on virus coverage demonstrated that insurers recognized the risks from a virus pre-COVID-19, and accordingly chose to limit the coverage for losses from diseases that are transmitted from person to person.

The court agreed with ACE that pollution condition could not include a virus (the opposite claim to that made by insurers relating to COVID generally), particularly when read with an endorsement providing limited coverage for viruses

The court granted ACE’s motion, because Essentia sought coverage only on the ground that COVID-19 was a “pollution condition,” reasoning that “pollution condition … read in conjunction with other provisions of the policy in this case, cannot reasonably be understood to include a virus.”Continue Reading Consistency not a concern for insurers fighting COVID-19 business loss claims, but policyholders can take advantage of divergent coverage positions