At least a couple of times a week we hear from another dry cleaner who, facing a lawsuit by his landlord or has received notice from the state environmental agency. He has already turned to his insurance agent for coverage for the damage to soil and groundwater allegedly caused by his operations over the years. The dry cleaner, who failed to keep copies of his old policies, had been hoping that his long-time insurance agent would have them. He is surprised by his insurance agent’s excuse. “ The new record retention plan only requires that we keep records for seven years.” Continue reading “Defending Dry Cleaners with Old Insurance Policies”
Category: Blog
Second District California Court of Appeal’s Rulings on Equitable Contribution Relax Notice Requirements to Trigger Cost Sharing Obligations, Use Allocation Agreements to Determine Payments Exceed “Fair Share”
Within the last twelve months, the Second District California Court of Appeal has been busy clarifying the cost-sharing obligations of insurers , who in defending against long-tail claims, seek to bring their policyholder’s other insurers into the fray.
The Second District California Court of Appeal ruled last summer in One Beacon America Insurance Co. v. Fireman’s Fund Insurance Company (2009) 175 Cal. App. 4th 183, that an insurer’s obligation of equitable contribution for defense costs arose where, after notice of litigation, a diligent inquiry by the insurer would have revealed the potential exposure to a claim for equitable contribution. Continue reading “Second District California Court of Appeal’s Rulings on Equitable Contribution Relax Notice Requirements to Trigger Cost Sharing Obligations, Use Allocation Agreements to Determine Payments Exceed “Fair Share””
California Supreme Court Decision Expected In District Court Conflict Over “Stacking of Policy Limits” in Progressive Property Damage Cases Director of Investigations
The issue of whether it is legal in California to “stack” policy limits to determine the amount of recovery to which an insured is entitled in a continuous and progressive property damage claim scenario is once again the million dollar question of unsettled California insurance coverage law. The California Supreme Court has previously defined “stacking” as “the ability of the insured, when covered by more than one policy, to obtain benefits from a second policy on the same claim when recovery from the first policy would alone be inadequate to compensate for the actual damages suffered.” The question of whether the “stacking” of policy limits would be allowed in California had been settled it seemed, until recent events have proven otherwise. Continue reading “California Supreme Court Decision Expected In District Court Conflict Over “Stacking of Policy Limits” in Progressive Property Damage Cases Director of Investigations”
U.S. Circuit Court Finds Limits to Indiana’s Kiger Decision In Federated’s Unambiguous Policy Language
The question of how broadly the Indiana Supreme Court’s ruling in American States Insurance Company v. Kiger, 662 N.E. 2d 945 (Ind. 1996) can be interpreted was further decided on March 25, 2010 when the United States Court of Appeals, Seventh Circuit reached a decision in the West Bend Mutual Insurance Company v. U.S. Fidelity and Guaranty Company case. The original Kiger ruling enabled insured parties to avail themselves of a defense against environmental claims after insurance carriers started using Absolute Pollution Exclusionary language in their policies (roughly post 1985-1986) because the Supreme Court ruled that Pollution Exclusion was ambiguous. This appellate decision is a caution to those owners and operators of retail gasoline service stations, who have been waiting to have their properties tested for pollutants in reliance on the effect of the Kiger ruling. They will now be carefully reviewing the pollution exclusionary and definitions clauses in their policies to determine whether the Kiger or West Bend rules apply to their situations. Continue reading “U.S. Circuit Court Finds Limits to Indiana’s Kiger Decision In Federated’s Unambiguous Policy Language”
The Road Goes On Forever And The Trial Never Ends
The Environmental Corner
By: John C. Bird, P.G., Vice President of EnviroForensics
The City of Modesto, California, began monitoring ground water in September 1984 to test 25 percent of its municipal water supply, as required by California Assembly Bill 1803. Of the 24 wells tested, 12 wells were found to be contaminated. Municipal Supply Well #11 was found to be contaminated with 16.7 parts per billion (ppb) of perchloroethylene (PCE); the State Maximum contamination Level is 5 ppb. The well was taken out of service. The City obtains all its drinking water from wells. An estimated 142,000 people obtain drinking water from Modesto municipal wells within 3 miles of the site. The California Department of Health Services (CDHS) and the Stanislaus County Environmental Health Department have identified Halford’s Cleaners, which is less than 0.5 mile upgradient of Municipal Supply Well #11, as a likely source of the PCE contamination. These agencies found up to 176,000 ppb of PCE in soil at Halford’s where a buried storage tank was being excavated and determined that Halford’s discharge to the sewer was contaminated. CDHS also found 84.6 ppb of PCE in a private well adjacent to Halford’s. Not long after, the United States Environmental Protection Agency (US EPA) took over the investigation and cleanup under the Superfund Program. This individual site is currently being remediated under S EPA control. The Halford’s Cleaners site was just the tip of the iceberg in Modesto. Continue reading “The Road Goes On Forever And The Trial Never Ends”
As Lumbermens Mutual Liquidation Looms, Dry Cleaners Will Scramble to Find Old Policies
Time is running out for dry cleaners who purchased their business insurance policies from subsidiaries of the Kemper Insurance Company in the 1970’s and 1980’s. While many state courts have ruled that the qualified pollution exclusions in these vintage general liability policies will respond to property damage claims occasioned by solvent spills, dry cleaners who have not yet filed claims may soon find that the value of these policies has dramatically diminished. Continue reading “As Lumbermens Mutual Liquidation Looms, Dry Cleaners Will Scramble to Find Old Policies”
Wouldn’t a Product Liability Analysis of Historical CGL Policies Issued to Small Businesses Be A More Reasonable Approach?
We have long lived in a country where most insurance policies have been comprised of standard forms. Most general liability insurance “products” issued by the same insurer to small businesses throughout the United States have long been uniform within a given industry. For instance, if two similarly situated small businessmen in a given state purchased general liability policies from the same insurer during the same policy period, they could reasonably expect that their policies were comprised of the same standard forms. Continue reading “Wouldn’t a Product Liability Analysis of Historical CGL Policies Issued to Small Businesses Be A More Reasonable Approach?”
Using Old Insurance to Cover Investigation and Clean-up Costs
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As Seen in the September 2009 Issue of Western Cleaner & Launderer
Written By: Steve Henshaw, President & CEO of EnviroForensics.
I heard from some readers that my last few articles were a little too technical and in addressing those comments, I’ve decided to go back to basics. That is to say, what are basic concerns that dry cleaners have? Since this is the Environmental Corner and staying with that topic, it is my experience that one of those basic concerns that dry cleaners might have deals with the questions, “How am I going to pay for an environmental investigation and clean-up?” Old insurance policies may be an answer. Continue reading “Using Old Insurance to Cover Investigation and Clean-up Costs”
How Insurance Archeology Can Assist Dry Cleaners When Environmental Contamination Claims Threaten Their Business
The dry cleaner had gone to the attic in search of his old business package policies. He explained that he had no idea before visiting an attorney that these old expired insurance policies could be of any use to him. Since they were package policies, they contained more than one line of insurance. Parts of the policy provided coverage against damage to his building, against break-ins, storm damage and even workers compensation coverage. As far as he knew, all of this coverage had long ago expired. Why would he still have copies of these old policies? There was no reason, he thought, that he would have kept them. They would have to be in a box or two that he had neglected to put in the dumpster. Continue reading “How Insurance Archeology Can Assist Dry Cleaners When Environmental Contamination Claims Threaten Their Business”
Insurance Archeology is More than Insurance Audits
Insurance archeology may be the science of recreating past insurance programs by assembling various types of evidence of insurance contracts, but the focus and methods used by different insurance archeologists vary. Unlike other disciplines for which standards and methods have been agreed upon by associations organized by practitioners, insurance archeology has yet to become standardized. The result is that various law firms, risk management firms and consultants provide different sorts of services under the same heading. All practitioners have the same purpose: the location and retrieval of evidence of historical insurance policies. Where they deviate is in (1) where they go to find old insurance records and (2) what they do once they go there to retrieve the policy evidence. Continue reading “Insurance Archeology is More than Insurance Audits”