Category Archives: Liability Policies

Additional Insurance: When “Ongoing Operations” Coverage Extends To Damages After Completion

One of the areas of insurance coverage law that can make a legitimate claim to being the most challenging is the area of problems arising out of additional insured status. Additional insurance is frequently required in the construction industry by general contractors, and additional insurance arrangements are extremely common. This involves the GC requiring a subcontractor to add the GC to the subcontractor’s insurance policy as an insured to the extent the GC becomes liable for the negligence (sometimes it is stated as the subcontractor’s "fault," a broader concept than negligence, or sometimes simply "acts," "omissions," "conduct," "activities," "operations" or similar word). 

Stemming out of the explosion of construction defect litigation in the 1990s, "long tail" liability for construction defect damages became a frequently litigated reality, and insurers responded with a number of measures including exclusions for injuries in progress, multi-unit construction, losses for which pre-policy notice was provided and stacking of multiple policies. Part of this was designed to bring more certainty to indemnity issues under "occurrence" liability policies, but another part was designed to relieve insurers of the duty to defend in many instances — construction defect cases are often massive and expensive to defend, with defense costs exceeding indemnity exposure in a high percentage of cases. 

Insurers also sought to limit AI responsibilities by producing an endorsement form that specified that the coverage applies to "ongoing operations."  More about that in a minute. One of the great challenges of insurance coverage law is that this field is really just out of its infancy.  Widespread commercial liability insurance is a relatively new product — since about the early to mid-1960s — and has been evolving continuously. As a result, in many states, key questions have not even been addressed by the judiciary, or the decisions that do exist aren’t very helpful and are perhaps not the most sophisticated or insightful analysis that could be done. This is why I call insurance coverage The Great Workshop of the Common Law. It’s a work in progress — an "ongoing operation," if you will. 

Now, back to AI endorsements.  In 1993 and 1997 the Insurance Services Office produced additional insured endorsements that were supposed to limit exposure to damage that occurred during ongoing operations. The problem is that, many times, courts said the language of the endorsement didn’t actually say that: for example, ISO form CG 20 10 03 97 (which as the last four numbers of the form indicate was produced in March 1997) says AI coverage is in respect to "liability arising out of your [the subcontractor’s] ongoing operations performed for [the additional insured]." Some courts have said this language actually covers not just damages that occurred during ongoing operations, but damages that occurred after completion. Because the vast majority of construction defect liability stems from water intrusion and related damages that occur after completion of a project, these cases present a problem for insurers. 

I saw a recent Ninth Circuit case that highlights this language: Tri-Star Theme Builders, Inc. v. OneBeacon Insurance Co. The case was decided under Arizona law. This case appears to me to involve the 20 10 03 97 form, judging by the language the court analyzed. The Ninth Circuit found that the "arising out of ongoing operations" did not limit the GC’s coverage to just liability for damages that the subcontractor caused before completion, but also for damages that occurred after completion, as long as they happened during the policy period. "During the policy period" isn’t as much of a restriction as you might think, or the Ninth Circuit appeared to believe — in the absence of a continuing loss or other exclusion, damages that begin during a policy period are usually covered by a commercial general liability policy if they continue after the policy period.  

The Ninth Circuit said that damages that occur after completion necessarily must have arisen out of ongoing operations — if the subcontractor didn’t do any ongoing operations, there wouldn’t have been anything completed. The court said it wasn’t going to consider the drafter’s history, which I think is a legitimate call, and was going to hold the insurer to what it actually said. I think there is an argument for what the court said, but there is one aspect of its analysis I think is lacking.  The court examined exclusion (j)(6) in the body of the subcontractor’s policy, it appears, to show that if the endorsement didn’t provide coverage for completed ops damages, there was no coverage at all. Exclusion (j)(6) is the one that precludes coverage for "that particular part of any property that must be restored, repaired or replaced" because the insured’s work "was incorrectly performed on it." There is an exception in the exclusion for damages that occur after completion, meaning it applies only to ongoing operations. I take it the Ninth Circuit’s point is that, if the AI endorsement excludes completed operations and (j)(6) excludes ongoing operations, there is no coverage and that is ridiculous.

If that is what the court is saying, my reaction is this: (j)(6) might indeed limit the subcontractor’s coverage to completed operations only, but as to the additionally insured GC, there is potential coverage for ongoing operations as well as completed ops because the definition of "your work" in a commercial general liability policy has an exception that allows coverage for a GC when work was performed for it by a subcontractor.  In other words, the (j)(6) exclusion will be applied differently to a GC insured as an AI under the policy than to the named insured subcontractor. If this seems weird, don’t forget that there is a Separation of Insureds or Severability of Insureds clause in such policies that instructs you to analyze coverage separately as to each insured. 

Because of case law like this, ISO put out an AI form in 2004 that changes the coverage language and contains an express exclusion for damages that occur after completion. But even seven years after this AI form was produced by ISO, not every insurer uses it. Many still use old forms, or use manuscript forms of their own devising, or modify the ISO form. 

I could go on and on and on about AI insurance, but this is a good place to stop for today. There are something like 28 current ISO AI forms, and many, many old ISO forms, out there. Also, there are dozens if not hundreds of manuscript and adapted forms out there, so this issue is one we will keep seeing being constructed and deconstructed again and again upon our visits to The Great Workshop of the Common Law. 

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Anti-concurrent cause, Ontario style

I saw an interesting case on anti-concurrent cause language in a liability policy on the blog for the Cavanagh Williams firm in OttawaHere’s a copy of the case, Appin v. Economical Ins. Co., in the Ontario Court of Appeals.  The decision was handed down in mid-February.

The court referred to it by another name — the concurrent exclusion clause — but it is worded more or less the same as the kind of anti-concurrent cause clauses we have discussed at length here, except for one thing: this provision is in the liability form of a Commercial General Liability policy, and is attached to a mold exclusion.

The purpose of the anti-concurrent cause language in the policy appears to be to reinforce the exclusion’s status as an "absolute" mold exclusion — no matter what combination of origins, causes, effects, happenings, events, or whatever word you come up with, the insurer does not intend to pay for any liability if the harm is caused in any way by mold.

To consider this clause in the proper context, let’s broaden our perspective for the moment.  Anti-concurrent cause language, as I’ve written about at length, is merely one way of addressing what I have called the Unbearable Lightness of Causation (with apologies to Kundera).  Causal relationships are among the most intellectually perplexing constructs of human thought, and theories of concurrent and sequential causation are likewise theoretically complex.   I’ve written about it in this article for New Appleman: Critical Issues from last year, and a second article on anti-concurrent causation and Fifth Circuit Katrina cases will come out in the same publication next month.  Anti-concurrent cause language posits an arbitrary analysis of causation — arbitrary in the sense that the areas of inquiry are limited so that, when certain factors are present, the result of the analysis each time will be the same: no coverage.

These clauses were developed to deal with adverse court precedent in first-party property policies, however, and I have expressed some skepticism about how well the language transfers to liability policies.  Consider this: property insurance causation has traditionally been viewed far differently from tort causation — the blurring of the distinction between the two, in fact, resulted in the development of the modern anti-concurrent cause clause. But tort causation is what liability insurance is all about, so whenever anti-concurrent cause language is inserted into the liability portion of a policy, sharp lawyers will look to attack it as incompatible with the underlying concept behind liability insurance — tort law can and does impose liability for concurrent causes of damage, so limitations on that theory of causation, some will say, are inherently ambiguous. 

OK, enough mumbo jumbo, right?  Let’s look at the case, and the language of the exclusion.  Now, I know what any normal person is thinking when they look below: "You expect me to read on past this point when the headline is ‘Fungi and Fungal Derivatives? See you later’."  Quite true, but those interested in reading a post on anti-concurrent cause language are by definition not normal people, and I have every confidence that those who have stuck with me this far won’t let a little fungus deter them from reading to the end.  I have put the anti-concurrent cause language in bold to make it easier to find among the fungi.

This insurance does not apply to:

7. FUNGI AND FUNGAL DERIVATIVES
(a) “bodily injury”, “property damage”, “personal injury”, or Medical Payments or any other costs, loss or expense incurred by others, arising directly or indirectly, from the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, presence of, spread of, reproduction, discharge or other growth of any “fungi” or “spores” however caused, including any costs or expenses incurred to prevent, respond to, test for, monitor, abate, mitigate, remove, cleanup, contain, remediate, treat, detoxify, neutralize, assess or otherwise deal with or dispose of “fungi” or “spores”; or

(b) any supervision, instructions, recommendations, warnings, or advice given or which should have been given in connection with (a) above; or

(c) any obligation to pay damages, share damages with or repay someone else who must pay damages because of such injury or damage referred to in (a) or (b) above.

This exclusion applies regardless of the cause of the loss or damage, other causes of the injury, damage, expense or costs or whether other causes acted concurrently or in any sequence to produce the injury, damage, expenses or costs.

Here, I am not sure the anti-concurrent cause language adds anything to what was already said: we do not cover any liabilities arising in any way from harm caused by mold.   The appellate court agreed with the trial court — both found the exclusion ambiguous and unenforceable. The reason the court did so, is that the insurer denied the duty to defend the insured against allegations that the claimant was harmed by exposure to mold (uncovered) and bacteria (covered). The court explained it this way:

We disagree with the insurer’s position. The language in clause 7(a) is both unclear and ambiguous in its effect. A plain reading of the provision does not support the insurer’s position. Indeed, the clause is worded in a fashion that would leave most people guessing as to its meaning. For example, on another possible interpretation, the clause could be taken to mean that wherever injury from mould is alleged in a claim, even if it is ultimately established that the injury arose solely from a covered peril, such as bacteria, the claim would exclude both the duty to defend and the duty to indemnify. This would effectively extend the exclusion to otherwise non-excluded perils. 

Now, to me, the key is not whether bacteria might ultimately be proven a cause of harm, therefore calling for indemnity.  The key for the duty to defend question is whether, under the allegations, mold and bacteria are concurrent or sequential causes of the harm claimed.  These are terms with highly specialized meanings in insurance.  Concurrent means independent causes that combine to produce a result that would not have occurred but for the existence of one of the causes.   Sequential can be ruled out — it refers to dependent causes, one cause causing the other.  It seems highly unlikely that the allegations were that the mold illness caused the bacterial illness or vice versa. 

So the question for anti-concurrent cause is this — can the allegations be read only one way, that is to say, that no illness at all would have occurred but for the combination of mold and bacteria?  It the allegations can be read to say that harm would have occurred because of bacteria alone, then we are talking about two separate single causes of two separate harms, not multiple causes of one harm.  If the allegations can be read that way, a powerful argument exists that anti-concurrent cause language is not relevant. 

As I mentioned, I’m not sure the anti-concurrent cause language added anything here.  The insurer admitted that if bacterial harm were proven, the insurer would have to pay for the liability.  From what I can see of the allegations from the court’s analysis, it is dubious whether a denial of the duty to defend can stand under such circumstances.  There may be things I don’t know about this case that were not in the opinion, but from what I see here the court’s call is well-reasoned.  I would have liked to see an analysis closer to the one I have explained above — then I could see if my assumptions about the case are correct.  If courts would use an analysis similar to the one I propose here, their jobs would be easier and their opinions clearer and more bulletproof. 

 

 

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Bloomberg: Canada auto insurers win in Supreme Court

This Bloomberg story is fascinating: Canada’s Supreme Court overturned lower courts that had required insurers to pay for losses arising "directly or indirectly" from the use of an automobile in the following situations: 

  • Todd Farmer and Anthony Raynor, high on drugs and alcohol, dropped a 30-pound boulder from an overpass onto a passing car.  The men were later convicted and sentenced to prison. Damages suffered by the driver were assessed at $996,850, plus interest. Farmer’s auto insurance had a policy limit of $25,000.

    Farmer transported rocks to the overpass in the back of his truck, which the Canadian court of appeal said was enough to trigger the auto insurance coverage. 

  • In a 1999 hunting case, Ontario resident Fred Wolfe arrived at a designated stand before sunrise and saw a flash of white in the headlights of his truck. Wolfe was outside his vehicle.  He fired his gun and shot Harold Herbison, a member of his hunting party, about 1000 feet from the vehicle. The court of appeal also said this was sufficient connection to the use of a vehicle to trigger coverage.

You know, when you think how much we use our cars, it doesn’t take too much creativity to find a link, direct or indirect, between any injury and an automobile.  I once ripped the leg of my pants at a St. Louis Cardinals baseball game, which I would not have been at if my brother-in-law hadn’t driven me there.  A link?  Oh yes.  The only question in my mind is whether the link is direct or indirect.   

Incidentally, here in the U.S., there are frequent disputes about when someone "occupies" a vehicle, a concept with a similar ability to expand or contract, depending on who is doing the judging.  If a person is not a first named insured on a policy, UIM coverage is often available only if the person occupies the vehicle. Some courts say that standing near a car after an accident is not occupying it. Some say that being crushed between two vehicles is occupying one of them.  Some say that a fall on ice near the rear of a vehicle you are unloading is not occupying the vehicle.  The scenarios go on and on.  I’ve never looked to see if there is one, but I presume that somewhere, someone got roped into writing a 600-page ALR entry on this very subject, compiling the seemingly endless variety of ways humans can be injured in proximity to cars.    

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Florida U.S. District Court: known loss provisions did not bar coverage despite insured’s prior knowledge of cause of damage

Who among us has not wondered to what extent courts will enforce the extensive "known loss" provisions found in most CGLs these days?  A judge in the U.S. District Court for Southern Florida recently denied summary judgment to an insurer that sought summary judgment on the duty to defend based on a number of policy provisions, including the pre-existing condition, or known loss, clause.  This provision bars coverage where the insured knew of damage, in part or whole, before the inception of the policy period.   As the skateboarder set says: Dude, Harsh!

In fact, the insured, a roofing contractor, was aware that the roof was leaking and causing interior damage before the policy period began.  But, the court reasoned, the lawsuit by the homeowners against the roofing contractor alleged the homeowners suffered "mold related injuries" — apparently not expressly excluded by the policy.  This, the judge said, was damage that the insured did not know about before the policy period began, and so, based on that allegation, the duty to defend existed.  The case is Transportation Insurance Co. v. the Regency Roofing Companies, Inc.. Click here to read the case. 

Hat tip to Law and Insurance, which keeps its eyes on coverage in the Lone Star State, and a few other places too.

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Would A Homeowners Insurance Policy Provide A Defense To This Lawsuit?

I loved this story about the lottery winners in Oregon who said they were going to use the money to help people fight drug addiction.  Instead, according to the story, they allegedly "held four months of parties with public sex, fights and signs of drug dealing," prompting the city of Portland to file a complaint charging them with being a public nuisance. Here is another story on the matter, from the local newspaper.  (Warning — you may encounter a registration process that is short and painless but nonetheless annoying). I notice that the lede of this version of the story does not say they were going to use the money to fight drug addiction, but rather that they "talked of helping young people with addictions to drugs and alcohol." Hmmmm. There are at least three ways of reading that phrase, only one of which means to help folks get rid of addictions.

This story intrigued me because it made me wonder what would happen if the residents of the house tender the lawsuit to their homeowners insurer.  I don’t know if the lawsuit seeks more than injunctive relief, I’m guessing probably not, because a municipality is the plaintiff.  I also don’t know if only the residents were sued or also the property, but I doubt that makes any difference in the analysis. Usually, and this has come up a lot in lawsuits against gun companies and gun stores, a suit that seeks only injunctive relief does not give rise to an insurer’s duty to defend because injunctive relief is not "damages" as defined by the policy.  The duty to defend arises whenever any allegation in the complaint, whether true or not, could under any scenario be covered under the policy.  At the very beginning of a liability policy, it says the insurer is obligated to pay for covered damages.  However, "damages" in the legal sense almost always means money, and does not include other relief like injunctions.

I would also add that most liability policies predicate coverage not only on the existence of damages, but state that the damages must be on account of bodily injury or property damage, the latter of which is usually defined to mean physical injury to tangible property. Again, because of who the plaintiff is and the type of claim, I doubt either one is alleged.  So, with no damages, no bodily injury and no property damage, there’s a pretty good possibility the insurer would give the skunk eye to a tender of defense. However, if anything is left of those lottery winnings — and that may be a big if considering all the alleged goings-on in that house — they should be able to afford their own lawyer to defend them and wage a coverage fight with the insurance company. 

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Should Insurers Be Sued For Bad Faith For Drafting Hard-To-Decipher Policies?

Last week I posted about Harvard 3L Chris Robertson’s post regarding ambiguity in insurance contracts.  I didn’t buy his analysis that insurers intentionally make them vague as a form of consumer deception. When you’re up against a rule, as insurers are, that ambiguities will be decided against you, what sense does it make to place them in your policies intentionally?  That’s like me throwing a punch at Superman.  If I connect, all I do is break my hand.   

Now Chris has a Part II out, about which he was kind enough to e-mail me earlier this week, so I took a read.   Regrettably, I also fail to buy this post, but the thing I buy the least is the argument that ambiguities are present in insurance policies because insurers left them ambiguous when they couldn’t get their harsher terms past state regulators, who have to approve the language of insurance contracts sold in the state.  In almost every coverage dispute I can think of, the ambiguity did not stem from any differences between the way the clause read in one state as opposed to another.

There simply are limits to human expression, especially when you have lawyers billing by the hour going over a policy trying to find ambiguity any way they can.  I do this myself.  When I represent policyholders and make an ambiguity argument, what I need to do is present an interpretation that is reasonable in the totality of the policy and contradicts the insurer’s interpretation. To win, my interpretation doesn’t have to be better or even as good.  It just has to be reasonable.  Then there is ambiguity, and it is decided against the drafter.  What I see being found ambiguous are terms that are standard terms. I’m open to other evidence, but I simply have not seen it.   

As far as things I don’t buy about the post, in a very close second place is the concept that the tort of bad faith should be extended to drafting of policies, because insurers know consumers may think they are covered but they really are not.  This has some resemblance to the doctrine of reasonable expectations, which in the insurance coverage field has pretty much been bounced around like a Bobo doll.  Instead of this reasonable expectations standard, courts say policies have some objectively reasonable meaning whether you read them or not, or whether you understand them or not.  What, now bad faith is going to be extended to some undocumented, subjective belief people may have?  What if they haven’t thought about it at all, does that mean the insurer acted in good faith, bad faith or in-between faith?

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Do Insurers Intentionally Introduce Ambiguities Into Policies?

Now this is an impressive post on ambiguities in insurance contracts, complete with footnotes, by Chris Robertson, a third-year law student at Harvard. I hesitate to link to it, for fear anyone will expect footnotes from me. If they are waiting for this, they will wait a long time.

The post is well-researched with sources ranging from Judge Richard Posner to Ralph Nader.  The gist of the post is that insurers perhaps intentionally make policy terms and conditions ambiguous as a strategy to deter and intimidate policyholders.  Chris acknowledges that courts decide ambiguities against the insurer, but says insurers may prefer to take their chances knowing that many people won’t sue and that sometimes courts will side with insurers.  Chris wrote this post in a scholarly vein, so I hope he won’t mind if I take issue with it. The post is in line with a lot of popular sentiment, so I want to address it. 

If this is a strategy by any insurance company in this world, let me give you some free advice: give it up, it won’t work.  Instead, don’t put any ambiguities in policies and use the same strategy of refusing to pay no matter what, and you will achieve better results.  Let’s look at the economic argument in the post this way.  Suppose the market is saturated with insurers whose business strategy manual has one page that contains one sentence: AT ALL TIMES, ACT IN BAD FAITH.  They take in premiums but don’t pay. Let’s also just say there are no state regulators who will prosecute them or revoke their licenses to sell insurance in the state.  If I come along and start an honest insurance company, or as honest as I can make it considering I may have to hire employees from companies that trained them to operate in bad faith, I will be able to charge higher prices and still dominate the market, because people know with me, they at least have a chance of getting a claim paid.  Whereas with the other companies, giving them money is like making a loan to your brother-in-law.  Neither I nor the bad companies have any incentive to make policies ambiguous — doing so only gives some judge a free shot at me, and for the other guys, why bother, since they aren’t going to pay no matter what the contract says. 

Not to mention that we know that almost all terms in widely used policies originated with the Insurance Services Office or some other trade group that debated endlessly about language to address specific concerns, in response to specific legal developments, and had a specific intention to broaden coverage to include certain things but not others, or to contract coverage to exclude certain things but not others.   These things are written about as well as they can be written.  Plain English doesn’t work.  The less that is said about a given thing, and the less technical the term, the more ambiguous you can make it out to be. 

In any event, a good, thought-provoking post.

UPDATE: Make sure you check out the comment below from Prof. Seth Chandler.  He gives you two weeks of course work on ambiguity condensed into a 60-second bite, and you don’t have to pay any law school tuition to get it.  

SECOND UPDATE: You’ll also want to read Martin Grace’s post on ambiguity at RiskProf, and check out Ted Frank’s post at PointofLaw.  

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Boy, 8, Sues Parents With Their Consent For Negligence In Fastening Child Safety Seat

Ted Harrison, Jr. v. Amy Harrison is an unusual, sad case.  Ted Harrison, Jr. is Teddy Harrison, 8, who was three when his parents’ SUV was in a crash, and he was thrown clear of the vehicle and injured because his child safety restraint didn’t hold.  After the accident, Minnesota state police found a coin was lodged in the buckle mechanism, and when it was latched by Teddy’s father, it gave a false click, making one think the buckle was engaged when it was not.  Teddy’s father apparently failed to notice the coin even though he frequently cleaned the car seat.  A product-liability lawsuit against the child safety seat manufacturer was settled.

This lawsuit, which was appealed from the Minnesota Court of Appeals and argued before the state Supreme Court last week, is a negligence action by Teddy against his parents, with their consent (his grandmother is acting as his guardian ad litem for this suit) for the liability coverage of their auto policy.  Teddy’s parents are being defended by the actual target, Progressive Insurance.

The question argued to the high court was the implication of Minnesota’s statute barring introduction of evidence of the use or failure to use seat belts.  The statute has an exception for “an action for damages arising out of an incident that involves a defectively designed, manufactured, installed, or operating . . . child passenger restraint system.”    The statute became law in 1963 to encourage car makers to install seat belts at a time when they were not in widespread use.  The exception was passed much later so that seat belt makers could not use the law as a shield in product liability cases.  It is agreed that if the statute is interpreted so that evidence of the negligence of the parents in failing to clean or properly fasten the seat belt is excluded, the lawsuit will not succeed.  If the evidence is introduced, it agreed that Teddy will win. The fight is over whether the exception was meant to apply only to product liability cases, or whether it is to be broadly construed.  One drawback to the argument for broadly construing the law: the word "operating" could be construed broadly as "use," which would contradict the main text of the statute, which, remember, bars evidence of the use of or failure to use seat belts.

The Court of Appeals earlier upheld a trial court that allowed the evidence, saying the word "installed" in the statute includes installation by parents, broadening the exception beyond product liability cases. Here is a link to the Minnesota Court of Appeals decision. 

Here’s a good story in the St. Paul Pioneer Press about the case.  Here is another good story from the StarTribune, the other daily paper in the Twin Cities.  I also wanted to point out that the Minnesota Supreme Court has streaming video of oral arguments on this case, some of which I watched, and which you can see here.  A great idea by the court, although the production values could stand a little juicing.  My compliments to both sides, by the way, for fine arguments, and to the justices for good questions.

It appears the liability aspect of the case may have been settled, and that a high-low agreement is in effect depending on how the court rules. (Teddy can get no more than the agreed-upon high figure, and even if he loses, will receive no less than the low figure agreed upon). 

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Maniloff’s Top 10 Coverage Decisions Of 2006

It is hard to write excellent legal prose for a number of reasons, not the least of which is the surprising resistance one encounters to good writing from many people who treat legal writing as if it is not an art but merely an industrial process, like bleaching wood pulp. These people treat any attempt at originality, creativity or — heaven forbid — humor as if you had showed up at a job interview with a Harley tattoo on your forehead. In addition, writing anything good is just plain hard, often agonizing, work.  Strangely enough, really good writing does not bear the marks and bruises of all this laboring, but instead reads as if it flowed naturally from the author’s fingertips with little effort.  Good writing glides, turns, shoots and scores like The Great One in his prime.     

So here is an example of legal writing that is really good, by Randy Maniloff, of White and Williams in Philadelphia.  Here is a link to Randy’s upcoming article in Mealey’s Litigation Report: Insurance on the year’s 10 most significant insurance decisions.  When I praise the writing, don’t take that to mean I slight the substance, because good writing is substance.  I place this article in my highest category of legal writing — the Steve Buscemi class — named after the actor who always brings something fresh, surprising and original to a role, who puts maximum effort into each part without letting you see the effort, and who worked as a firefighter for four years before becoming a star, and then showed up for work at his old firehouse the day after 9/11, working 12-hour shifts at Ground Zero while disdaining publicity. 

I can’t quibble with Randy’s case selection — I’ve written about many of them myself — although for sentimental reasons, I found myself wishing at least one of the Hurricane Katrina coverage cases, which I have spent so much time analyzing and of which I have grown so fond, had made the list.  My favorite analysis in Randy’s piece is French v. Assurance Co. of America (4th Cir. 2006), particularly this excerpt that brings clarity to a construction defect issue that often seems murky:

However, the flaw in this argument is that the subcontractor exception to the your work exclusion is not called the subcontractor exception to the occurrence requirement. The French Court recognized this and concluded that, notwithstanding that the EIFS was defectively installed by a subcontractor, such defective application does not constitute an accident, and, therefore, is not an occurrence under the CGL policy. 

My favorite lede from the analysis of the cases is this one, from Standard Fire Ins. Co. v. Spectrum Community Assoc., 46 Cal.Rptr.3d 804 (Cal.App. 2006):

What’s the difference between a John Grisham novel and the continuous trigger? Answer: Nothing.  They are both legal fiction.

And here’s a great short summary of Brannon v. Continental Casualty Co.:

— Supreme Court of Alaska gave an insurer a chilly reception to its argument that the statute of limitations on an insured’s action for breach of the duty to defend began to run from the time of the disclaimer . . . .

Print the article out and read the whole thing.  At 23 pages, it will take a little time, but it’s worth it.

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Insurance Agent Liability And Applicable Standard Of Care

Here is a recent article from National Underwriter magazine about insurance agent standard of care and liability, including a discussion of the recent Hurricane Katrina-related Leonard case in Mississippi and the less recent Harts v. Farmers Insurance case in Michigan.  I was among the people National Underwriter interviewed for the story and am quoted in it.

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