SDV Insights

As previously addressed in "Whose Contract Is It Anyway: Addressing the Contractual Privity Problem," additional insured coverage under Insurance Services Office, Inc. (ISO), standard blanket additional insured endorsements is often conditioned, in part, on the existence of a written contract requiring additional insured coverage.

In a major win for policyholders, the California Supreme Court recently held that a negligent hiring, supervision, or retention claim arising out of an employee's intentional misconduct constitutes an "occurrence," giving rise to coverage under a general liability policy.

The Supreme Court of Texas recently clarified that under certain circumstances, an insured can recover policy benefits as damages for bad faith even absent a finding that the insurer was in breach of contract. In USAA Texas Lloyds Company v. Menchaca, the court explored decades' worth of Texas precedent and distilled it into five simple rules that govern claims of this nature.

Five minutes after I parked my car, a tree fell on it. On Tuesday, May 15th I pulled into my driveway, in my small Connecticut neighborhood, under a grey sky. As soon as I walked in the house, the lights flickered. And then suddenly there was a loud "Crack!" and "Crash!" and the sound of breaking glass. I looked out the window and trees were bent 90 degrees, then snapping, and then flying up instead of falling down.

It has become quite common for large-scale construction projects to be insured under consolidated insurance ("wrap-up") programs, where the owner, general contractor, and a majority of subcontractors are covered under the same primary and excess liability policies. However, when a wrap-up is acquired, not all parties involved in the construction project are enrolled.

On January 17th, 2018, the PHP Ins. decision from the Ninth Circuit Court of Appeals solidified the broad duty to defend for insurers in California. The court used the long-established precedent that remote facts buried within the causes of action that may potentially give rise to coverage are sufficient to invoke the duty to defend and upheld the trial court's decision that the insurer's duty to defend was triggered.

In a recent victory in their home state of Connecticut, Saxe Doernberger & Vita partners, Jeffrey Vita and Theresa Guertin, representing owner-developer 777 Main Street, LLC, overcame a summary judgment motion filed by Liberty Mutual Fire Insurance Company. The Connecticut Superior court refused to adopt the insurer's broad interpretation of the "faulty workmanship" exclusion in an all-risk builders' risk insurance policy.

The California Supreme Court recently heard oral arguments over whether an insurer is required to cover allegations that a builder negligently failed to supervise an employee who sexually assaulted a middle school student while working at the student's school.

A New York court held that an employers' liability policy providing unlimited coverage was unambiguous and that, as a result, the insured's excess liability policy could not be triggered. This unusual result highlights the need for careful review of insurance policies to ensure that there are no unexpected exhaustion issues when a claim is made.

On December 19, 2017, the Pasiak decision of the Connecticut Supreme Court opened the door to finding coverage for punitive damages under an insurance policy related to certain common law claims. While the case involves a homeowner's policy, other policyholders may be able to use the court's reasoning when seeking coverage for punitive damages. The case also clarifies the amount of proof required for an insurer to prove that a policy exclusion bars coverage.