In Lamorak Ins. Co. v. Kone, Inc., 2000 Ill. App. (1st) 163398 (Ill. App. May 15, 2018), the Illinois Appellate Court found that in policies containing self-insured retentions, that the SIR was to be treated as a primary policy that had to be exhausted before the insured could tap into the excess layer of coverage.
Illinois Court Treats SIR As A Primary Policy Requiring Exhaustion
Is The Insurer Obligated To Notify The Insured Of Any Inadequacy Of Automobile Liability Coverage?
The question of whether an insurance company had an obligation to provide advice to the insured on the adequacy of liability coverage was recently addressed by the Washington Court of Appeals in Junfang He v. Norris v. Farmers Ins. Co. of America, 415 P.3d 1219 (Wash. App. Div. I, 2018). In this case, the Washington Appellate Court found that there were insufficient grounds to support the insured's claim that the insurance company was responsible for inadequate bodily injury limits that the insured purchased.
In For One, In For All Rule Does Not Apply To Title Insurers In Pennsylvania
Under the so-called "in for one, in for all" rule, if there is one covered claim on a multi-count complaint while other claims are not covered, the insurer is required to defend the entire action. Recently, the US Court of Appeals for the Third Circuit in Lupu v. Lone City, LLC, 903 F.3d 382 (3rd Cir. 2018) (interpreting Pennsylvania law) held that a title insurer was entitled to limit its duty to defend only to covered claims. The court found that title insurance policies differed from general liability policies because title insurance policies are limited to loss from defects that cloud or invalidate a title. Because title insurers cover past defects in title, title insurers were entitled to limit their risk by searching the public records before issuing a policy. This was different than general liability insurance which typically provided insurance against future events. Additionally, general liability insurance companies typically promise to defend "a suit" or "any suit" seeking damages for covered acts or omissions. In contrast, title insurers promise to defend only claims arising from defects in title.
Corroborating UIM Claims
Under South Carolina law, insureds can receive the benefit of uninsured motorist coverage for injuries that are caused by a phantom driver, provided that the insured can establish three conditions set forth in S.C. Code Anno. §38-77-170. One of the three conditions requires that there either be physical contact with the unknown phantom vehicle or that the accident was witnessed by someone other than the owner or operator of the insured vehicle.
Once is Enough!
The Kentucky Supreme Court in Allstate Insurance Co. v. Smith, 487 S.W.3d 857 (Ky. 2016) held that the insurer had a duty to advise its insured of the availability of underinsured motorist coverage when the policy was initially purchased. However, the insurer had no duty to advise the insured of the availability of UIM coverage after the insured renewed the policy for the first time. Although it was undisputed that the designation of UIM coverage was not listed on the declarations page of the insured's policy, the evidence also showed that Allstate sent a form to the insured with each renewal, notifying the insured about the ability to purchase higher limits for UM and UIM coverage.
In Louisiana, Insurers Are Not Vicariously Liable For The Negligence Of A Roofer Who Was Provided To The Insured Under The Insurance Company's "Direct Repair Contractor Program"
In Rubin v. American Insurance Co., 193 So. 3d 408 (La. App. 2016), American Insurance Company had a direct repair contractor program which was a list of approved contractors. If the insured used one of the approved contractors, the program provided that AIC would "be responsible" for the roof it provided. In this case, the insureds agreed to use the approved contractor provided by AIC to repair a roof damaged by a hail storm. The insureds alleged that the roofer was negligent when it removed the roof, but did not adequately protect the roof thereafter, nor did the approved contractor return to the job for several days while it was raining. It was alleged that mold grew in the house because of this negligence. The insureds sued AIC, alleging that AIC was responsible for the contractor's negligence under theories of vicarious liability or joint venture. The case was tried to a jury, which rendered a verdict in favor of the insureds, although the jury found that the insurance company was not, itself, negligent. The trial court then granted AIC's motion for a directed verdict as to the complaint.
The Ohio Supreme Court Broadly Interprets An Abuse Or Molestation Exclusion, Finding That It Could Apply Vicariously
In World Harvest Church v. Grange Mutual Casualty Co., 148 Ohio St. 3d 11, 68 N.E.3d 738 (Ohio 2016), reconsideration denied, 146 Ohio St. 3d 1473, 54 N.E.3d 1270., the Ohio Supreme Court upheld an abuse or molestation exclusion in a CGL policy which stated that there was no coverage under the policy for abuse or molestation "by anyone." The Court found the policy language to be simple and unambiguous. The Court found that the language of the policy excluded coverage for abuse "by anyone," including any liability premised upon the negligent employment, supervision, or retention of persons who committed the abuse or molestation.
Criminal Acts Exclusion Conclusively Applies In Cases Where The Insured Is Convicted Of A Crime
In Country Mutual Insurance Co. v. Dahms, 116 Ill. App. (1st) 141392, 2016 WL 2941713 (Ill. App., May 19, 2016) the Court found that a criminal conviction extinguished the insurance company's obligation to defend the insured. The Court held that prior to a criminal conviction the insurance company was required to defend its insured in a mixed complaint, alleging both negligence and criminal activity, because there was the potential for coverage based upon the non-criminal allegations. However, when the insured was convicted by a jury of aggravated battery, the criminal acts exclusion became applicable and the duty to defend ceased. Following the conviction, the insurance company could rely upon the jury verdict, which was based on the highest burden of proof known to the American legal system.
Insured's Duty To Defend Could Not Be Based On Speculation Over Whether Unpled Claims Existed Or Not
While it is an obvious conclusion, the Montana Supreme Court recently held in Fire Insurance Exchange v. Weitzel, 371 P.3d 457 (Mont. 2016) that the insured's duty to defend could not be based on speculation over whether unpled claims existed or not. The Court found that the complaint in question did not potentially seek damages for false imprisonment or bodily injury where the sole allegation was that the insured defrauded an elderly person. The Montana Supreme Court noted that a complaint did not need to expressly allege a covered cause of action to trigger the insurer's defense obligation, the complaint did need to contain facts that would support a covered claim.
A Pedestrian's Being Struck By A Motor Vehicle Did Not Give Rise To "Occupancy" During The Sequence In Which The Pedestrian Was In Physical Contact With The Vehicle
In Hahn v. GEICO Choice Insurance Co., 420 P.3d 1160 (Alaska 2018), the Alaska Supreme Court held that UIM benefits did not extend to a person falling on an insured vehicle after it struck him. In this case, the insured was sitting on his motorcycle while stopped at a traffic signal. The tortfeasor's vehicle struck the insured's motorcycle, throwing the insured backward onto the tortfeasor's vehicle's hood, windshield, and roof. The motorcyclist then landed on the pavement. Focusing on the "upon" language in the GEICO UIM coverage, the motorcyclist attempted to argue that he was an occupant of the tortfeasor's vehicle which was insured by GEICO. The Alaska Supreme Court found this argument to be unreasonable. The Court found that the policy insured covered persons who were actually occupying the vehicle, and not persons who happened to be "upon" the insured vehicle. According to the Court, the concept of "occupying" meant "in, upon, getting into, or getting out of" in accordance with the policy's language. When the phrase was read in context rather than in isolation, the term "upon" was a subset of "occupying." The Court found that no reasonable person would come to the conclusion that the fortuity of where a person's body bounced enroute to being thrown to the pavement allowed for UIM coverage attachment.
