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Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

April 2018 Archives

Nebraska Supreme Court Finds That Insureds Can Assign Their Right To Receive Policy Proceeds After A Loss Has Occurred Notwithstanding The Policy's Anti-Assignment Clause

In Mallard Gutter Co. v. Farm Bureau Property and Casualty Insurance Co., 295 Neb. 419, 2016 WL 7486374 (filed 12/30/16), the insured's home was damaged by a storm. In order to repair the storm damage, the insured brought in a roofing company, Millard Roofing and Gutter (Millard) to repair the roof. Millard believed that a complete roof replacement was required. At some point the insured signed an "Assignment of Claims" form presented by Millard, which assigned to Millard "any and all claims or moneys due or to become due" to the insured from the insurer, Farm Bureau Property and Casualty Co. Farm Bureau believed only two slopes of the roof needed to be replaced. The insured proceeded to replace the entire roof and then assigned to Millard "any and all claims or monies due or to become due" under the insured's homeowners policy. However, the homeowner policy contained a standard non-assignment clause which required Farm Bureau's consent to any assignment of policy benefits. Prior to the assignment, the insured had not obtained Farm Bureau's written consent to the assignment. When Farm Bureau refused to pay the roofing contractor, the roofing contractor sued Farm Bureau based upon the assignment.

Allegations That The Insured Unlawfully Acquired And Resold Sprint Phones Did Not Constitute Product Disparagement

In Wireless Buybacks, LLC v. Hanover American Insurance Co., 223 F.Supp.3d 443 (2016) the court held that Hanover had no duty to defend its insured under its policy's coverage for product disparagement against allegations that the insured had unlawfully acquired and then resold Sprint smart phones. The insured, Wireless Buybacks, LLC, purchased a CGL policy through Hanover which contained "personal and advertising injury" coverage. This coverage applied to injuries arising out of product disparagement.

Timing is Everything

The West Virginia Supreme Court holds that when the insurance company is fulfilling its duty to defend, courts had no jurisdiction to adjudicate the bad faith claim.

Minnesota Court Finds Insurer Could Not Rescind Policy Notwithstanding Insured's Agent's Knowledge of Her Own Embezzlement at Time of Application

In Minnesota insurers are entitled to rescind their insurance policy when an application contains a material misrepresentation that increases the risk of loss. In National Credit Union Administration Board v. Cumis Insurance Society, Inc., 241 F.Supp.3d 934 (D. Minn. 2017) the court held that a credit union's employee's misrepresentations on the Fidelity Bond application regarding her own fraud could not be imputed to the credit union for purposes of coverage for the agent's embezzlements.

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