Archives: Insurance General

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Raccoons as legal roadkill: The Western District of Pennsylvania denies coverage for damage caused by masked bandits

Reviewing philosopher Mark Rowlands’ 2012 work Can Animals Be Moral?, Jessica Pierce wrote in the Notre Dame Philosophical Reviews, “The question, ‘Can animals be moral?’ has suffered the worst kind of philosophical denial: an almost complete lack of interest by ‘serious’ philosophers.” No longer.  In an effort to apply “general canon[s] of contract interpretation,” the … Continue Reading

In historic vote, U.S. House passes SAFE Banking Act; but, what will U.S. Senate do?

In a historic moment, the U.S. House of Representatives, yesterday, voted 321 to 103 in favor of H.R.1595, the Secure and Fair Enforcement Banking Act of 2019, also known as the “SAFE Banking Act.”  If ultimately enacted into law, this legislation would provide insurers, as well as banks and other institutions, a “safe harbor” to … Continue Reading

Review state cannabis regulations for insurance requirements

Like any business, a business operating in the U.S. cannabis industry needs both first-party and third-party liability insurance.  Unlike other types of businesses, however, a cannabis-related business’ insurance needs may be dictated at least in part by state regulations.  Although not every state that has legalized cannabis for medical and/or adult use has promulgated specific … Continue Reading

Artificial Intelligence: The New Frontier for Assessing Insurance Coverage

U.S. and international businesses are accelerating their use of artificial intelligence (AI)[1] at an unprecedented rate. The second AI Index Report published in December 2018 by a Stanford University-led group concluded that “AI activity is increasing nearly everywhere and technological performance is improving across the board.” The AI Index Report further found that “the number … Continue Reading

Self-insured retentions are not a windfall for excess insurers looking to avoid coverage

In Deere & Co. v. Allstate Ins. Co., 2019 WL 912151 (Cal. Ct. App. Feb. 25, 2019), a California Court of Appeal recently held that an insured’s self-insured retention (SIR)[1] was considered part of the underlying limit of liability such that it need not be satisfied again and again just to access excess insurance policies. … Continue Reading

Lightening the load: New York Appellate Division rejects heightened pleading standard for policyholders seeking Bi-Economy Market consequential damages

In a recent unanimous decision, the Appellate Division First Department provided clarity on the pleading requirements for policyholders seeking special or consequential damages allowed under the landmark decision of Bi-Economy Market v. Harleysville Insurance Company of New York, 856 N.Y.S.2d 505 (N.Y., Feb. 19, 2008). Under Bi-Economy, policyholders may seek special or consequential damages resulting … Continue Reading

Federal court’s E-Cig decision provides cautionary tale

Every policyholder in every industry should make sure that it in fact has obtained insurance covering the actual, specific risks presented by its line of business. That point is the critical one driven home by the U.S. District Court for the Central District of California in United Specialty Insurance Company v. E-Cig Vapor Emporium, LLC, … Continue Reading

Federal crop insurance grows: Hemp to be covered

Federal crop insurance will soon be available for hemp.  The federal Agriculture Improvement Act (H.R. 2) (the Act) – which has been approved by both houses of Congress and is now just awaiting the president’s signature – will amend the Federal Crop Insurance Act, 7 U.S.C. §1501, et seq., so that hemp will be a … Continue Reading

Tangible property doesn’t have to be physically lost to find coverage

A California Court of Appeal recently held that the alleged loss of use of a premises as a nightclub qualified as “property damage” under a general liability insurance policy. Thee Sombrero, Inc. v. Scottsdale Ins. Co., 2018 WL 5292072 (Cal. Ct. App. Oct. 25, 2018). Thee Sombrero, Inc. (Sombrero) owned and operated a nightclub in … Continue Reading

California Supreme Court rules broadly in favor of insureds

On Monday, June 4, 2018, the California Supreme Court ruled that an insurance company must provide liability coverage to its corporate insured against claims of negligent hiring, retention, and supervision of its employee, who allegedly sexually assaulted a 13-year-old child. The case is Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc., Case … Continue Reading

CannaBeware: Make sure insurance actually covers the risks your business faces

It should go without saying that when a business purchases any insurance policy – including, but not limited to, a commercial general liability (CGL) insurance policy – the business expects the policy to provide coverage for its line of business and the specific risks it faces. Cannabis-related businesses are no different. However, they must be … Continue Reading

Final Mass. “adult-use” marijuana regulations require “Marijuana Establishments” to have liability insurance

As part of its “adult-use” marijuana regulations, which are expected to take effect next week, the Commonwealth of Massachusetts will require that “Marijuana Establishments” – which include cultivators, manufacturers, and retailers – procure commercial liability insurance in established amounts. Massachusetts’ new regulations are the most recent reminder that cannabis-related businesses must be aware of state regulations and their … Continue Reading

Ten important steps a cannabusiness should consider when purchasing insurance

Purchasing insurance for a cannabusiness can feel like a daunting task, but it does not have to be one. In addition to grappling with many of the same issues and questions that any business confronts when seeking insurance, a cannabusiness encounters certain additional, unique challenges due to the industry in which it operates. That is … Continue Reading

Should the Cannabis Industry Fear the Sixth Circuit and K.V.G.?

Although any case has the potential to go sideways, the appeal in K.V.G. Properties, Inc. v. Westfield Insurance Company – which involves a policyholder’s right to insurance coverage for property damaged by a third party’s marijuana growing operation – should not be cause for alarm in the cannabis industry. As driven home by the opening … Continue Reading

Recent New York decision offers hope for long-overdue end to Resolute’s free pass

In a promising development for policyholders, a New York state trial court recently signaled a potential end to the free pass courts often have provided to third-party claims administrators (TPAs), such as Resolute Management, Inc. (Resolute), that has enabled TPAs to act with near impunity when handling or adjusting claims on behalf of their insurer clients. … Continue Reading

“Myopic” ruling limits policyholders’ ability to recover for common law bad faith in West Virginia

The Supreme Court of Appeals of West Virginia has made it harder for policyholders to prevail on claims of common law bad faith against insurers in that state. In State of West Virginia ex rel. State Auto Property Insurance Companies v. Stucky, No. 17-0257, 2017 WL 4582607 (W. Va. Oct. 10, 2017), West Virginia’s highest … Continue Reading

Marijuana and the “Illegal/Dishonest Acts Exclusion”: Making Sense of K.V.G. Properties, Inc. v. Westfield Insurance Company

A recent federal court decision in “a property loss insurance case” involving the unauthorized growing of marijuana could have a negative impact on the enforceability of insurance policies sold to legitimate marijuana-related businesses. How much of an effect remains to be seen, but there is reason to think it should be minimal. At issue in … Continue Reading

In Wake of Disasters, Do Not Just Assume No Coverage Available for Cannabis-Related Losses

As reported extensively in the media over the past week, the cannabis industry has been hit hard by recent natural disasters. While companies doing business in this industry may face some unique challenges in purchasing insurance, and when attempting to obtain coverage for losses, insurance coverage – contrary to certain media reports – nevertheless may … Continue Reading

“Smoking Gun” Still Not Necessary To Prove Insurer Violated Pennsylvania’s Bad-Faith Statute

In Rancosky v. Washington National Insurance Company, No. 28 WAP 2016, the Pennsylvania Supreme Court confirmed that, to prevail on a claim pursuant to Pennsylvania’s bad-faith statute, a policyholder does not have to prove that an insurance company acted with a “motive of self-interest or ill-will.”  While the Pennsylvania Superior Court had reached the same … Continue Reading

When Assessing Insurance Needs, Medical-Marijuana Dispensaries Must Consider Pennsylvania Regulations

Pennsylvania’s burgeoning medical-marijuana industry is and will be carefully regulated. When purchasing insurance, medical-marijuana dispensaries should pay careful attention to the Commonwealth’s regulations, in particular to the regulations relating specifically to dispensaries. Pennsylvania’s medical-marijuana regulations are only temporary, and most of them (including the ones relating to dispensaries) will expire in 2018 Certain of those … Continue Reading

Texas Legislature Votes to Restrict Policyholders’ Rights

Texas lawmakers are now on the fast track to restrict policyholders’ rights when their insurance companies fail to pay property insurance claims arising out of weather events, such as storms involving heavy winds and hail. Now that the Texas Senate has approved House Bill 1774, Governor Abbott is almost sure to sign it.  Unfortunately, this … Continue Reading

Reps & Warranties Insurance Case Highlights the Need for New Expertise and Old-Time Common Sense

A rare lawsuit concerning coverage under a reps & warranties policy presents two issues of interest to M&A lawyers: If the insured under a reps & warranties insurance policy fails to obtain the insurer’s consent to a settlement, coverage for that settlement is forfeited, even if the settlement was “panicked” and on a short timeframe. … Continue Reading

Pennsylvania Court Confirms Multiple Trigger for Environmental Claims

Recently, the Commonwealth Court of Pennsylvania gave policyholders another victory in the continuing battle with insurers over application of the “multiple trigger” doctrine.  In Pennsylvania Manufacturers’ Association Insurance Co. v. Johnson Matthey, Inc., the Commonwealth Court held that the multiple-trigger approach – which expands the number of policies potentially available to provide coverage for long-tail … Continue Reading

Schrödinger’s Coverage: When a Risk is Covered and Not Covered by Insurance

When is a person an “employee” under one insurance policy but not an employee under another?   Conflicting or inconsistent definitions across multiple policy lines issued to the same company can give rise to significant gaps in insurance coverage, as a recent opinion of the U.S. Court of Appeals for the Seventh Circuit instructs, Telamon Corp. … Continue Reading
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