The United States Court of Appeals, Fourth Circuit, recently took a close look at the application of a “controlled insurance program exclusion” (wrap-up exclusion) to additional insureds on a commercial general liability policy. In Cont’l Cas. Co. v. Amerisure Ins. Co., 886 F.3d 366 (4th Cir. 2018), the Fourth Circuit examined the interplay of an enrolled party’s additional insured status on an unenrolled party’s commercial general liability (“CGL”) policy with a wrap-up exclusion. The court applied North Carolina law and found that pursuant to the policy’s own language, the exclusion only applied to the original named insured, not the additional insureds.
The United States District Court for the Northern District of Florida recently issued an order in Morette Company v. Southern-Owners Insurance Company,  where the Court addressed whether an insurer, Southern-Owners Insurance Company (“Southern-Owners”), had duties to defend and indemnify various parties against state court claims for property damage due to allegedly defective work performed by two of its insured subcontractors, Etheridge Construction, Inc. (“Etheridge”) and Wallace Sprinkler & Supply, Inc. (“Wallace”). Morette Companybegan in August 2008, when Little Sabine, Inc. (“Sabine”), the developer and owner of Margaritaville, hired Morette Company, Inc. (“Morette”) as general contractor for the Margaritaville project. Morette subcontracted work to Etheridge and Wallace. The terms of the respective subcontracts required each subcontractor to defend and indemnify Morette for all damages claims “occasioned by” the subcontractor’s work and to reimburse Morette for all expenses incurred, including reasonable attorney’s fees, as a result of such claims.
Commercial General Liability (CGL) policies typically include a “your work” exclusion, excluding coverage for “’property damage’ to ‘your work’ arising out of it or any part of it and included in the ‘products-completed operations hazard.’” These CGL policies define “your work,” in pertinent part, as “work or operations performed by you or on your behalf.” Read More…
Failing to plead damage to other property, even in the face of record evidence supporting damage to other property, can result in a ruling that there is no duty to defend. In Florida, a commercial general liability (“CGL”) insurer’s duty to defend its insured is determined by examining whether the allegations in the complaint against Read More…
The Florida Supreme Court issued its opinion in Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., Case No., SC16-1420, which answered the following certified question from the United States Court of Appeals for the Eleventh Circuit: Is the notice and repair process set forth in Chapter 558 of the Florida Statutes a “suit’” Read More…
Insurance carriers can breathe a little easier. The Eleventh Circuit recently ruled, in EmbroidMe.com, Inc. v. Travelers Property & Casualty Co. of America, that an insurer did not have to pay attorneys’ fees incurred by its insured before the insured notified it of the litigation.
For a variety of reasons, additional insureds (and even named insureds) under commercial general liability policies will sometimes wait months, and even years, to tender the defense of a claim or lawsuit, incurring significant legal fees in the interim. When the claim finally is tendered, a dispute often arises over who should pay the pre-tender defense costs. Surprisingly, there is very little Florida legal authority specifically dealing with this issue. However, the recent federal 11th Circuit Court of Appeals case of EmbroidMe.com, Inc. v. Travelers Property Casualty Co. of America, No. 14-10616, 2017 U.S. App. LEXIS 368 (11th Cir. Jan. 9, 2017), applying Florida law, addresses the issue head-on and provides CGL carriers with a large hammer in refusing to pay pre-tender fees.
The Southern District of New York recently made the importance of notice requirements in a claims-made policy abundantly clear. Generally, there are two kinds of insurance policies: (1) claims-made; and (2) occurrence. The Florida Supreme Court defines an occurrence policy as “a policy in which coverage is effective if the negligent act or omission occurs within the policy period, regardless of the date of discovery or the date the claim is made or asserted.” Conversely, its definition of a claims-made policy is a “policy wherein the coverage is effective if the negligent or omitted act is discovered and brought to the attention of the insurer within the policy term.” The fundamental difference between the two forms of insurance is that under a claims-made policy, it does not matter when a negligent or omitted act actually took place. The important date is the date on which “a claim” concerning the negligent or omitted act is made. The essence of a claims-made policy “is notice to the carrier within the policy period.”
Most, if not all, commercial general liability policies contain a workers’ compensation exclusion, which have been widely interpreted to exclude claims made by employees directly against their employers.[i] However, that exclusion can be avoided in certain circumstances where a party that was liable for the employee’s injuries seeks indemnity back against the employer, as outlined in a recent South Florida case.[ii]
Recently, in Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., the United States Court of Appeals for the Eleventh Circuit addressed an issue of first impression. In Altman, the Eleventh Circuit evaluated whether an insurer has a duty to defend and indemnify an insured who receives a Notice of Claim pursuant to Chapter 558, Florida Statutes (“Notice of Claim”). The Southern District of Florida previously ruled that a Notice of Claim did not constitute a suit, and thus, does not trigger a duty to defend and indemnify. The insured then appealed that ruling to the Eleventh Circuit, which ruled that the terms “suit” and “civil proceeding,” as found in the subject Commercial General Liability (CGL) insurance policies, may be ambiguous as used in the policies. Due to important public policy considerations, the Eleventh Circuit certified the following question to the Florida Supreme Court: “Is the notice and repair process set forth in Chapter 558 of the Florida Statutes a ‘suit’ within the meaning of the GCL policies issued by C&F to ACI?”