Tag: general liability

California Bill Aims to End Statute of Limitations for Child Sexual Abuse

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On February 6, just over a month after California’s Child Victims Act reviver statute ended, California Assembly member Dawn Addis and Senator Nancy Skinner introduced AB 452, the “Justice for Survivors Act”. 

While California’s Child Victims Act provided childhood survivors of sexual abuse a 3-year period to file civil lawsuits against their abusers and associated institutions, this ‘lookback window’ closed on December 31, 2022. 

Currently, people who were sexually abused as minors in California can file civil lawsuits until they are 40 years old. If passed, AB 452, which awaits referral to its first policy committee, would eliminate those time constraints.  

OLD GENERAL LIABILITY INSURANCE POLICIES CAN HELP
Whether states enact lookback windows, or when new legislation is passed that removes or reduces the statute of limitations for sexual abuse civil suits, organizations that are linked to alleged abuses can get caught in the crossfire between plaintiffs and alleged offenders. Occurrence-based Commercial General Liability (CGL) policies issued to these organizations during the policy periods in which the alleged abuse occurred can respond to these new claims – even if the alleged abuse happened several decades ago.

WHY SHOULD YOU CONSIDER INSURANCE ARCHEOLOGY?
Upon receiving notice that a lawsuit has been filed against them under a reviver statute, or under a new law, defendant organizations typically first contact their attorneys, who then suggest contact should be made with their current insurance agents and brokers to find insurance. 

However, because of standard document retention practices, these organizations quickly learn their current agent/broker has no information dating back decades. Often, policyholders will next contact insurance companies, expecting that their old coverage information is still stored within the insurance company’s ‘old files’. These requests are often fruitless, as the burden of proving the existence of historical liability coverage falls to the policyholder. Furthermore, the insurance company is not required to keep a policyholder’s information. It’s at this point that defendant organizations should consider Insurance Archeology.

Insurance Archeology is the practice of locating and retrieving proof of the existence, terms, conditions, and limits of lost or destroyed insurance policies. PolicyFind’s expertise is finding and bringing to light old insurance coverage for our clients. Under current and future reviver statutes and emerging new laws across the country, historical CGL policies issued to businesses, schools, churches, and other organizations, are the first line of assets to be explored to pay for claims against them.

Contact PolicyFind today to learn more about how to discover and reconstruct your organization’s historical liability insurance portfolio.

District Court Sends Valentine to Washington State Policyholders Finds that PRP “Scarlet Letters” Trigger Duty to Defend

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David A. O’Neill, JD

PolicyFind

 

On February 10, 2017, the U.S. District Court for the Western District of Washington issued its opinion in King County v. Travelers Indemnity Co. et al.  The District Court held in that case that letters from state and federal regulatory authorities designating the County as a PRP at a property damage site were the “functional equivalent of a suit,” triggering its insurers’ duty to defend under its historical general liability insurance policies.

Although its insurers argued that mere PRP notice letters were not “adversarial and coercive” enough to trigger a duty under their policies, the District Court found that the USEPA and Washington State Department of Ecology had “assumed an adversarial posture by exercising their statutory authority to designate King County as a strictly-liable PRP.” In its opinion, the court reasoned: “Once a party bears the scarlet letters ‘PRP,’ it may be called upon at any time to assume responsibility for the cleanup effort.”

Noting that both CERCLA and the Washington state MTCA are “strict-liability schemes that require responsible parties, once notified, to participate in and fund all remedial action,” the District Court found that once notified,  “It makes no difference whether an insured voluntarily cleans up contamination or waits until government intervention—it is liable either way.”

The King County decision relied on the Washington Court of Appeals 2014 ruling in Gull Industries v. State Farm. In that case, the court had found that the term “suit” in general liability policies was ambiguous and may encompass claims for administrative enforcement actions if they are “adversarial and coercive” in nature.  Noting that the Gull Industries decision had gone for the insurer, Travelers argued that the PRP notices in the King County case were “exactly the type of letter that the Gull court expressly found did not trigger a duty to defend.” The District Court however distinguished between the letters in Gull and those in King County, noting that the agency letters to Gull Industries stated that it had not yet determined that it was a PRP, while in the King County case the PRP designation was clear. The DOE’s letter in Gull had been a “passive acknowledgement” that voluntary remediation was underway. The Kings County letters clearly identified it as a PRP.

Defense Lawyers Risk Federal Court Sanctions for Failure To Investigate and Present Applicable Insurance Evidence

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Increasingly, America’s civil courts are demanding that insurance defense attorneys be duly diligent in the handling of their client’s evidence of applicable insurance. Where attorneys fail to investigate and present what coverage may be available in their client’s insurance portfolio, they risk court sanction.

Tenth Circuit Upholds Counsel’s Duty to Investigate Coverage

Federal Rule of Civil Procedure 26(a)(1)(A)(iv) requires that parties to civil litigation in possession of insurance policies that may provide coverage be forthcoming even before discovery requests for insurance policies are made. It reads:

“[A] party must, without awaiting a discovery request, provide to the other parties… any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment.” Fed. R. Civ. P. 26(a)(1)(A)(iv).”

So when Sun River Energy’s trial counsel argued before the District Court that it had born no duty to examine his client’s Director’s & Officer’s Liability insurance policy to see whether it provided coverage for securities violations and present it to opposing counsel, the 10th Circuit Court of Appeals found his argument wanting. In the case styled Sun River Energy v. Nelson decided in September, 2015, the appellate court determined that the District Court had not abused its discretion in sanctioning trial counsel for not disclosing its client’s policy until coverage had lapsed. It ruled that the attorney’s obligation “inherently includes an exercise of legal judgment regarding the possible availability of coverage under the specific terms of any insurance policies held by a party.” Where Sun River’s trial counsel “never took a serious look at whether there was applicable insurance,” the appellate court found that sanctions were in order even without a finding of intentional misrepresentation.

North Carolina Attorney Sanctioned for Failing to Disclose Umbrella Coverage

Not only is it necessary to investigate insurance coverage and present it to opposing counsel in discovery but it is necessary to present all the evidence of insurance in the client’s possession in addition to that policy under which you are providing a defense. In the recent case styled, Inc. Palacino v. Beech Mountain Resort, the U.S. District Court for the Western District of North Carolina found it necessary to sanction an insurance defense attorney for failing to properly discuss and review applicable insurance in her client’s insurance program. There, the attorney had revealed the first $1 million layer of commercial general liability insurance coverage but had failed to make additional inquiry that would have revealed a $10 million umbrella policy above the underlying coverage.

Insurance Archeology a Necessary Part of Defense

Given the growing insurance expertise demanded of insurance defense counsel, the hiring of an insurance archeologist to assist in the preparation of insurance evidence during discovery makes increasing good sense. Defense attorneys can likely protect against sanctions by showing that they were duly diligent in the accumulation and evaluation of applicable insurance documents at trial.

Does Buss Stop Here? California’s Insurer Right to Recoup Rejected by Other State Courts

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Written by David O’Neill, JD

Director of Investigations, PolicyFind

 

The California Supreme Court recognized an insurer’s right to recoup defense costs for claims proven to be non-covered in its 1997 holding in Buss v. Superior Court.1  Finding precedent in state law for the rule that an insurer’s duty to defend in a commercial general liability (“CGL”) insurance policy is indeed broader than its duty to indemnify, the Supreme Court singled out an issue before it as one of first impression. The issue to be determined was whether the insurer’s costs in exercising its duty to defend could be passed to the policyholder should claims defended later be determined to include those for which coverage did not apply.

Basing its decision on contractual principles, the Buss court opined that because the insurer had defended potentially uncovered claims, the policyholder had received a benefit for which it had not bargained.  It found that the insurer’s right to recoup these defense dollars was implied in law even if not expressly stated in the insurance contract.   Continue reading “Does Buss Stop Here? California’s Insurer Right to Recoup Rejected by Other State Courts”

Indiana House Examines Insurance – Lobby Backed Bill to Exclude Pollution Coverage

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Written by Justin Gifford, General Counsel, PolicyFind

 

Out of the blue on January 16, 2014, Representative Martin Carbaugh (R – Ft. Wayne) introduced a bill sponsored by the Indiana Insurance Institute that attempts to do what a decade and a half of insurance company litigation couldn’t accomplish in Indiana courts: give the word ‘pollutant’ an unambiguous definition in Commercial General Liability (CGL) policies. In other words, allow insurers to unilaterally disclaim one of the biggest risks many businesses seek insurance for.

Every other year (including 2014) in Indiana is a short session, meaning that the House and Senate have a short window to get legislation through, which also means that bills like HB 1241 can rocket through the Statehouse without much discussion. In this case, serious discussion is what’s needed, particularly considering the impressive financial impact this bill would have on Indiana’s residents and businesses.

Continue reading “Indiana House Examines Insurance – Lobby Backed Bill to Exclude Pollution Coverage”

New Mexico Supreme Court Finds Coverage in Pre-1986 Policy Language; Meaning of “Sudden” in Pollution Exclusion is “Unexpected” not “Abrupt”

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Written By David O’Neill, Director of Investigations, PolicyFind

 

The New Mexico Supreme Court has ruled that the term “sudden” in the “sudden and accidental” exception to general liability policy pollution exclusion is ambiguous and as such does not limit covered occurrences only to abrupt releases of pollutants.

In United Nuclear Corp. v. Allstate Ins. Co., No. 32, 939 (N.M. August 23, 2012), New Mexico’s high court determined that general liability insurance policies issued to an uranium mining company in the 1970’s and early 1980’s could be applied to address claims for the cost of cleaning pollution at several uranium mines it operated in that state during those years.  One of the claims involved a 1979 spill of 94 million gallons of tailings pond liquids into a nearby river, a record release of radioactive pollutants.  Continue reading “New Mexico Supreme Court Finds Coverage in Pre-1986 Policy Language; Meaning of “Sudden” in Pollution Exclusion is “Unexpected” not “Abrupt””

INDIANA SUPREME COURT REVERSES STANDARD FUSEE DECISION; “INTIMATE CONTACTS” REPLACES “SITE SPECIFIC” CHOICE-OF-LAW RULE IN MULTIPLE ENVIRONMENTAL SITE INSURANCE COVERAGE DISPUTES

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By David A. O’Neill, J.D.

The Indiana Supreme Court reached its decision in National Union Fire Insurance Company of Pittsburgh, PA et al. v. Standard Fusee Corp. on December 29, 2010.  In its soon to be published opinion, the Court announced its decision to overturn the Court of Appeals ruling that Indiana law governed the interpretation of general liability insurance policies in environmental remediation proceedings involving Standard Fusee sites in multiple states.

Given that Indiana insurance law concerning an insurer’s duty to defend is notoriously more policyholder friendly than that of most states, the “intimate contacts” rule outlined in the Supreme Court’s decision can be expected to discourage corporations with environmental contamination sites in Indiana and in additional states from bringing declaratory judgment actions in Indiana courts.  This is because the location of the contaminated property will no longer be the predominant factor in determining which state’s law the court will use to interpret the policies under which defense or indemnity for the characterization and remediation of the pollution is sought. Continue reading “INDIANA SUPREME COURT REVERSES STANDARD FUSEE DECISION; “INTIMATE CONTACTS” REPLACES “SITE SPECIFIC” CHOICE-OF-LAW RULE IN MULTIPLE ENVIRONMENTAL SITE INSURANCE COVERAGE DISPUTES”

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