Illinois Insureds are Contesting One Carrier's Universal Denial to Covid-19 Losses
May 11, 2020 —
Anna M. Perry - Saxe Doernberger & VitaIn response to the large number of COVID-19-related losses that businesses are experiencing, insurers have begun issuing statements informing their insureds of whether their policies will respond to the losses, and if so, what coverage will be afforded. Insurers cannot take a “one-size-fits-all” approach to the COVID-19 losses because, besides factual differences, the losses are occurring within all fifty states which means 50 different state law interpretations will apply.
Recently, on March 27, 2020, a number of restaurants and movie theaters located in and around Chicago (the “Insureds”) filed a declaratory judgement action, titled Big Onion Tavern Group, LLC et al. v. Society Insurance, Inc., against their property insurance carrier, Society Insurance, Inc. (“Society”), seeking coverage for business interruption resulting from the shutdown order issued by the governor of Illinois. The suit alleges that Society improperly denied their business interruption claims by using a boiler plate denial. The denial issued by Society is allegedly used for all COVID-19 losses regardless of the applicable jurisdiction’s interpretation of the policy language and the specific coverage purchased by the insured. Further, in its denial, Society takes the position that any loss related to a government-issued closure order is uncovered, even though the Insureds specifically purchased business interruption coverage and their policies did not contain an exclusion for losses caused by viruses.
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Anna M. Perry, Saxe Doernberger & VitaMs. Perry may be contacted at
amp@sdvlaw.com
Breaking the Impasse by Understanding Blame
January 13, 2020 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday (on a Thursday) here at Construction Law Musings, Victoria Pynchon (@vickiepynchon) joins us for the 4th time. Victoria is an attorney-mediator with ADR Services, Inc. in Century City; an arbitrator with the American Arbitration Association in Los Angeles, California; and, a negotiation consultant and trainer world-wide. Victoria co-founded She Negotiates Training and Consulting in 2010 and writes for ForbesWoman at its She Negotiates blog. She is the author of one of my favorite books on conflict resolution, A is for A*@!#, the Grownups’ ABC’s of Conflict Resolution reviewed at Musings here.
First Let’s Talk About Anger
Please raise your hand if your clients — corporate clients — are angry about the burdens of litigation. Irritated with the document “demands” and interrogatories. Frustrated about the e-discovery. Ticked off at the way opposing counsel asks them questions as if they’re lying. Hot under the collar about the mounting attorneys’ fees and the distance between the day suit was filed and the probable day on which a trial might eventually be scheduled. Simmering about the time the litigation consumes, time they’d prefer to be spending doing their actual jobs — planning for and implementing business strategies for a profitable future instead of fighting about the unprofitable past.
And we’re not even talking about your clients’ anger at the defendant who has stolen their intellectual property or stopped worked at the construction site or refused to release the remaining funds in the construction loan account. And if you believe that powerful people in highly successful and profitable businesses do not fear that litigation might hurt their careers, think again.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Washington Supreme Court Finds Agent’s Representations in Certificate of Insurance Bind Insurance Company to Additional Insured Coverage
February 03, 2020 —
Jason Taylor - Traub LiebermanIn T-Mobile USA Inc. v. Selective Ins. Co. of Am., 450 P.3d 150 (Wash. 2019) the Washington Supreme Court addressed whether an insurance company is bound by its agent’s written representation—made in a certificate of insurance—that a particular corporation is an additional insured under a given policy. The question arose in a case where: (1) the Ninth Circuit had already ruled that the agent acted with apparent authority, but (2) the agent’s representation turned out to be inconsistent with the policy and (3) the certificate of insurance included additional text broadly disclaiming the certificate’s ability to “amend, extend or alter the coverage afforded by” the policy. According to the Court, under Washington law the answer is yes: an insurance company is bound by the representation of its agent in those circumstances. Otherwise, the Court reasoned, an insurance company’s representations would be meaningless and it could mislead without consequence.
At the heart of this case were two T-Mobiles entities: T-Mobile USA and T-Mobile Northeast (“T-Mobile NE”), which were distinct legal entities. T-Mobile NE engaged a contractor to construct a cell phone tower on a rooftop in New York City. The contract between T-Mobile NE and the contractor required the contractor to obtain a general liability insurance policy, to annually provide T-Mobile NE “with certificates of insurance evidencing [that policy’s] coverage,” and to name T-Mobile NE as an additional insured under the policy. T-Mobile USA was not a party to the contract, but was nonetheless aware of it and approved the contract as to form.
The contractor obtained the required insurance policy from Selective. The policy provided that a third party would automatically become an “additional insured” under the policy if the contractor and the third party entered into their own contract that required the contractor to add the third party to its insurance policy as an additional insured. Because T-Mobile USA did not have a contract with the contractor, it did not automatically become an additional insured under the policy. Nevertheless, over the course of several years, Selective’s agent issued a series of certificates of insurance to “T-Mobile USA Inc., its Subsidiaries and Affiliates” that stated that those entities were “included as an additional insured [under the policy] with respect to” certain areas of coverage. The agent signed those certificates as Selective’s “Authorized Representative.”
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Jason Taylor, Traub LiebermanMr. Taylor may be contacted at
jtaylor@tlsslaw.com
Corps Proposes $4.6B Plan to Steel Miami for Storm Surge
June 22, 2020 —
Pam Radtke Russell - Engineering News-RecordA $4.6-billion U.S. Army Corps of Engineers proposal to protect Miami from future storm surge, largely by building massive sea walls and elevating infrastructure systems, is the latest of such plans the agency has developed for East Coast communities.
Pam Radtke Russell, Engineering News-Record
Ms. Russell may be contacted at Russellp@bnpmedia.com
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Zero-Energy Commercial Buildings Increase as Contractors Focus on Sustainability
February 10, 2020 —
Jeffrey S. Wertman - Construction ExecutiveImagine a functional, low energy commercial building that annually consumes only as much power as the building creates with on-site, clean, renewable resources. From coast to coast, there is considerable momentum for zero-energy (ZE) buildings, also known as ZEB’s or net-zero energy buildings (NZEBs). Although still an emerging market, the growth trend for ZEBs is steep.
The world’s net-zero energy market for commercial and residential projects is expected to exceed $1.4 trillion by 2035. The number of ZEBs across North America has dramatically increased since 2010 which encompasses about 80 million square feet of commercial building space. ZE has captured the attention of building owners, developers, architects, engineers, contractors, designers, policymakers and others who see its potential to efficiently use clean energy resources to reduce the substantial carbon footprint of buildings.
Real Applications of Net Zero
From 2012 to 2019, the number of ZE projects has increased ten-fold. According to the “2019 Getting to Zero Project List” released in May 2019 by the New Buildings Institute, a nonprofit organization striving to achieve better energy performance in commercial buildings, the total number of certified, verified and emerging ZE projects grew to 607 in 2019. New projects continue to appear regularly. Today, hundreds of ZE buildings, including commercial buildings of all types (including retail, office, warehouse, hotel, educational and government) are being developed.
Reprinted courtesy of
Jeffrey S. Wertman, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Just When You Thought the Green Building Risk Discussion Was Over. . .
May 25, 2020 —
Christopher G. Hill - Construction Law MusingsAs a reader of Construction Law Musings, you no doubt realize that I am a big proponent of “green” or sustainable building. I have also been known to sound a bit like Eeyore when discussing the charge into the breach of green building without considering the potential risks. Thankfully, and despite some of the risk predictions made here (and elsewhere for that matter) there have not been but so many major court cases relating to these risks.
However, as a recent article in ENR Magazine warns, this lack of litigation does not mean that you should let your guard down. Just because the economy, warnings by attorneys and others, and possible lack of financial incentive to sue have kept the litigation numbers down does not mean that the risks have gone away. LEED requirements, time horizons and other risks that have become evident during the process of vetting green building contracts and practices still must be dealt with in contracts and insurance policies. These risks are well laid out in the ENR article and in other places here at Musings so I won’t outline them in detail here.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
WARN Act Exceptions in Response to COVID-19
April 13, 2020 —
Yvette Davis & Kyle R. DiNicola - Haight Brown & BonesteelCalifornia’s WARN Act requires employers of certain covered establishments to provide 60 days written notice of any mass layoff, relocation, or termination. This notice is required to be given to employees and the Employment Development Department. An employer’s failure to comply with this requirement can result in being held liable for back-pay and value of the cost of any benefits to which the affected employee(s) may have been entitled for up to a maximum of 60 days.
Due to the COVID-19 crisis and emergency circumstances in which many employers now find themselves, the Governor of California has issued Executive Order N-31-20, which temporarily suspends the 60-days advance notice requirement and the provisions that impose liability and penalties on an employer for the duration of the COVID-19 emergency.
Reprinted courtesy of
Yvette Davis, Haight Brown & Bonesteel and
Kyle R. DiNicola, Haight Brown & Bonesteel
Ms. Davis may be contacted at ydavis@hbblaw.com
Mr. DiNicola may be contacted at kdinicola@hbblaw.com
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Liability Policy’s Arbitration Endorsement Applies to Third Party Beneficiaries, Including Additional Insureds
May 11, 2020 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc. (No. C082841; filed 12/31/19, ord. pub. 1/28/20), a California appeals court held that a binding arbitration clause in an insurance policy extends to a third party, such as an additional insured.
In Philadelphia v. SMG, Philadelphia issued a general liability policy to a youth organization, Future Farmers of America (FFA), that had contracted to use the Fresno Convention Center for its annual convention. The contract required FFA to obtain liability insurance and to name the property manager, SMG, and the City of Fresno, as additional insureds. Philadelphia issued FFA a commercial lines CGL policy with an endorsement affording coverage to “managers, landlords, or lessors of premises” for “liability arising out of the ownership, maintenance or use of that part of the premises leased or rented” to the named insured. It also covered “any person or organization where required by a written contract executed prior to the occurrence” but only for liability arising from the named insured’s negligence.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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