In Burnett v. GEICO, 389 P.3d 27 (2017) the Alaska Supreme Court, as a matter of first impression, held that a liability insurer can owe a tort duty to a third-party claimant when the insurer's claims handling actions affirmatively create a new and independent duty to the claimant. In Burnett, GEICO's insured crashed into a cabin which caused, in part, a fuel leak. The fuel leak was required to be remediated environmentally in accordance with the Alaska Department of Environmental Conservation (DEC) standards. GEICO hired a contractor to perform an environmental site assessment and to coordinate the necessary clean-up of the spill. However, GEICO delayed in the remediation effort. As a result, the fuel spill spread underneath the cabin itself. Because of this, the cabin owner sued not only the GEICO insured for the accident, but also GEICO for its negligent activities in timely cleaning up the environmental spill.
New York Law requires insurance companies to allocate continuous, progressive losses on a pro rata basis among all triggered policies based upon a time-on-the-risk allocation model. The New York Appellate Court recently rejected an invitation to create an unavailability exception to the allocation rule so that insurers were not required to indemnify the insured for periods when liability insurance was unavailable in the marketplace.