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Insurance Coverage
Insurance Coverage Update September 2013
04.27.2015
NEW YORK  
Wrongful Acts - - Employment Practices
Wrongful Touching Claims Triggered D&O Employment Practices Coverage Grant; Insurer Waived Right to Disclaim Under Ins. Law Section 3420.  
 
Jewish Cmty. Ctr. of Staten Island v. Trumbull Ins. Co., 2013 U.S. Dist. LEXIS 102063 (E.D.N.Y. July 16, 2013)
 
The Eastern District of New York concluded that the wrongful acts alleged in an underlying lawsuit fell squarely within the insuring clause because they 'arose solely out of' the discharge of [an employee's] duties for the insured" and that the insurer had waived its right to disclaim coverage.  
 
Duty to Defend - Named Driver Exclusion 
Court Grants Judgment on Pleadings as Named Driver Exclusion Does Not Apply to Bar Coverage
 
Century Sur. Co. v. Marzec, 2013 U.S. Dist. LEXIS 106469 (S.D.N.Y. July 30, 2013)
 
The Southern District of New York holds that the insured is entitled to coverage for a personal injury suit arising out of the insured's garage operations.
 
The insurer of a garage operator brought suit seeking a declaration that it was not obligated to provide defense and indemnity for a personal injury suit brought against its insured.  The insurer sought coverage for an accident that occurred while one of its employees struck an individual while operating a vehicle within the garage.  The insurer declined coverage pursuant to the "Named Driver Exclusion."  The exclusion applied to "bodily injury," "property damage," or "medical payments" associated with all incidents in which a covered automobile is driven by "any individual shown in the schedule above."  The schedule did not include the employee involved in the accident. 
 
Construction Defect - EIFS Exclusion  
Court finds Policy Excludes Coverage for Collapse of a Portion of a Building's Exterior Facade
 
FSLM Assoc. LLC v. Arch Ins. Group, 2013 N.Y. Misc. LEXIS 3296 (N.Y. Sup. Ct. July 23, 2013)
                    
The insurer of a contractor and developer properly denied coverage under the Exterior Insulation and Finishing System (EIFS) Exclusion as to developer and general contractor for a property damage claim that occurred when a section of an exterior facade of a building collapsed.
    
NEW JERSEY
Bad Faith - Settlement Communications
Insurer May Question Insured About Some Privileged Settlement Negotiation Communications in Context of Bad Faith Claim
 
V.K. v. New Jersey Mfrs. Ins. Co., 2013 N.J. Super. Unpub. LEXIS 2111 (App. Div. Aug. 26, 2013)
 
An insurer defending against a policyholder's bad faith claim is allowed to depose the policyholder regarding efforts to negotiate a settlement in the underlying matter, a New Jersey appellate panel ruled.  Although actual communications between an attorney and client are generally not discoverable, a policyholder is obligated to provide an explanation of the circumstances surrounding negotiation tactics - information that is directly relevant to whether the insurer made a good faith effort to settle the case.
 
Additional Insureds - Notice of Cancellation
Notice of Cancellation to Named Insured Did Not Bar Trucking Entity's Claim for Additional Insured Status
 
Willey v. DD Transp., 2013 N.J. Super. Unpub. LEXIS 2125 (App. Div. Aug. 27, 2013)
 
Following a fact-specific inquiry, the New Jersey Appellate Division conferred additional insured status upon a trucking entity that had not received notice that the policy under which it sought coverage had been cancelled due to the named insured's non-payment of premiums, and considered a separate contractual agreement as evidence of the additional insured's reasonable expectations of coverage. 
 

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