HNRK Coverage Corner

On July 10, 2018, Justice Schecter of the New York County Commercial Division issued a decision in J.T. Magen & Co., Inc. v. Atlantic Cas. Ins. Co., 2018 NY Slip Op 31584(U), holding that an unsigned purchase order could satisfy the requirement of a “written contract with the Named Insured” to qualify for coverage under an Additional Insured Endorsement to a CGL Policy. J.T. Magen & Co. involves a frequently-litigated coverage issue in construction-related matters – determining who qualifies as an additional insured under a blanket additional insured endorsement to a ...

On July 2, 2018, Justice Platkin of the Albany County Commercial Division issued a decision in Dan Tait, Inc. v. Farm Family Cas. Ins. Co., 2018 NY Slip Op 28205, holding that a series of thefts by an employee constituted a single “occurrence,” subject to a single $15,000 coverage limit, under the “Employee Dishonesty” section of a business insurance policy.

The employee stole a total of $500,000 from the insured, employing several different methods.  The insured argued that each of the employee’s schemes should be treated as a separate occurrence based on the common law ...

On July 6, 2018, the Second Circuit issued a decision in Medidata Solutions Inc. v. Federal Ins. Co., 17-2492-cv, holding that a computer fraud insurance policy covered losses resulting from an email “spoofing” attack.  As the Court explains, “spoofing” is “the practice of disguising a commercial e-mail to make the e-mail appear to come from an address from which it actually did not originate. Spoofing involves placing in the ‘From’ or ‘Reply-to’ lines, or in other portions of e-mail messages, an e-mail address other than the actual sender’s address, without ...

On July 7, 2018, Justice Masley of the New York County Commercial Division issued a decision in Jiang v. Ping An Ins., 2018 NY Slip Op 31534(U), holding that coverage under an excess D&O policy was not triggered because the insured settled its coverage claim with the primary insurer for less than the policy limit and did not “absorb the gap” between the settlement amount and the policy limit.

In Jiang, a corporate officer sought coverage for the defense of a federal criminal prosecution and a parallel SEC enforcement action.  The corporation had $5 million in primary D&O coverage ...

On June 28, 2018, the First Department issued a decision in Bernstein Liebhard LLP v. Sentinel Ins. Co., Ltd., 2018 NY Slip Op 04842, reversing a decision by Justice Masley of the New York County Commercial Division that granted summary judgment to a law firm on a claim for business interruption coverage. (See our previous post on Justice Masley’s decision here.)

The plaintiff, a mass tort law firm, sought coverage for loss of business income after a fire destroyed its offices.  Although the policy only covered income that would have been “earned” during the 12 months after fire ...

On July 2, 2018, Justice Edmead of the New York County Supreme Court issued a decision in M&M Realty of N.Y., LLC v. Burlington Ins. Co., 2018 NY Slip Op 31399(U), holding that a property owner was entitled to coverage under a contractor’s CGL policy because extrinsic evidence demonstrated “the parties’ intent to confer additional insured status” on the property owner. In M&M Realty, a property owner (M&M) sought additional insured coverage under the CGL policy of a contractor (L&M) for a personal injury claim by the contractor’s employee.  L&M’s policy had a standard ...

On June 29, 2018, Justice Grossman of the Putnam County Supreme Court issued a decision in Nationwide Mut. Fire Ins. Co. v. Oster, 2018 NY Slip Op 51018(U), awarding attorneys' fees to an insured in a declaratory judgment action commenced by the insurance company, explaining:

New York has followed the rule that an insured may not recover in an affirmative action to determine its rights, but may do so, where, as here, the insured has been "cast in a defensive posture by the legal steps an insurer takes in an effort to free itself from its policy obligations (see Johnson v. General Mutual Ins ...

On June 27, 2018, Judge Oetken of the SDNY issued a decision in Liberty Ins. Corp. v. WSP USA, Inc., Case No. 17-cv-4398(JPO), holding that coverage under a CGL Policy was excluded by a professional liability exclusion.

The insured, WSP, was hired by the Washington State Department of Transportation to “evaluate the repair or replacement of the Alaskan Way Viaduct, a highway project in Seattle.” WSP “agreed to develop an environmental impact statement and to perform ‘associated design work’ for the viaduct project." WSP was sued for negligence by a contractor that worked ...

On May 17, 2018, Justice Lebovits of the New York County Supreme Court issued a decision in Tishman Constr. Corp. of N.Y. v Scottsdale Ins. Co., 2018 NY Slip Op 30991(U), reconsidering a prior order in light of the Court of Appeals’ decision in Burlington Ins. Co. v. NYC Transit Auth., 29 N.Y.3d 313 (2017), and holding that a construction manager was not entitled to indemnity coverage, under a subcontractor's liability policy, for the settlement of a personal injury lawsuit, where the subcontractor did not proximately cause the underlying injuries.

The subcontractor’s liability ...

On June 18, 2018, Justice Bannon of New York County Supreme Court issued a decision in Union Mut. Fire Ins. Co. v. 72nd Forest Hills Ass'n, 2018 NY Slip Op 31265(U), holding that an insurance carrier properly rescinded a commercial liability policy, under Insurance Law § 3105(a), based on material misrepresentations in the insurance application.  The Court also granted summary judgment for the carrier on the separate ground of “accord and satisfaction,” finding that the insured consented to the rescission by accepting and depositing a check from the insurance company returning ...