HNRK Coverage Corner

On September 21, 2018, the Second Circuit issued a decision in SPARTA Ins. Co. v. Technology Ins. Co., Inc., Case No. 17‐3441, holding that a liability insurer that assumed the defense of a claim was estopped from disclaiming coverage based on a nine-month delay in asserting coverage defenses and resulting prejudice to the insured. In SPARTA Ins. Co., a subcontractor’s liability carrier (SPARTA) assumed the defense of a property owner and general contractor in an injury lawsuit brought by the subcontractor’s employee, without a reservation of rights.  In later ...

On September 18, 2018, Justice Hagler of the New York County Supreme Court issued a decision in Aspen Specialty Ins. Co. v. Zurich Am. Ins. Co., 2018 NY Slip Op 32328(U), holding that property owners and their construction manager were not entitled to defense coverage under a CGL policy based on a stop work order issued by the New York City Department of Buildings.

The standard CGL policy at issue in Aspen Specialtyrequired the insurer to defend a “suit,” defined as “a civil proceeding in which damages because of . . . ‘property damage’ . . . to which this insurance applies [is ...

On August 22, 2018, the Second Department issued a decision in Tiffany Tower Condominium, LLC v. Insurance Co. of the Greater N.Y., 2018 NY Slip Op 05886, holding that insureds stated a cause of action against a property insurer for breach of the covenant of good faith and fair dealing based on the failure to pay a claim arising from damage suffered during Hurricane Sandy.

Unlike other states, New York does not recognize a separate cause of action against an insurance company for bad faith claims handling.  Section 2601 of the Insurance Law forbids certain specified “unfair claim ...

On July 23, 2018, Justice Edmead of the New York County Supreme Court issued a decision Tricon Constr., LLC v Main St. Am. Assur., 2018 NY Slip Op 31721(U), holding that additional insured coverage for a general contractor under a sub-contractor’s CGL policy was primary over the GC’s own liability coverage. In Tricon, a general contractor (Tricon) sought coverage for a personal injury action as an additional insured under the CGL policy of its subcontractor (Boyle), issued by Main Street America Insurance Company (MSA). Tricon also had its own CGL policy issued by Grange Mutual ...

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 ...