NEWS
We closely monitor the courts and the legislature for changes in insurance laws, and report on them in the Insurance Law Alert, our free newsletter.
Insured Cannot File One Suit for Contract Damages and Another Suit for Bad Faith Damages
The California Court of Appeal has held that an insured seeking recovery for breach of contract and bad faith cannot file separate suits against the insurer, and must assert all theories of recovery in a single action. (Lincoln Property Company, … Read More
Under Claims-Made Policy, Claim is “First Brought” Insured Where Receives Demand Letter
The California Court of Appeal has held that, under a claims-made policy, a claim is “first brought” at the place the insured receives a third party’s demand letter. (National Cas. Co. v. Sovereign Gen. Ins. Svcs. (2006) 40 Cal.Rptr.3d 591) … Read More
Insurer Can Rescind Based on Material Misrepresentation in Application
The California Court of Appeal has held that a D&O insurer properly rescinded a policy based on the insured’s material misrepresentation in the application. (TIG Insurance Company of Michigan v. Homestore, Inc. (2006) 137 Cal.App.4th 749) Facts Homestore, Inc. (Homestore) … Read More
Indemnity Agreements: Indemnity Clause Imposes Duty to “Defend” Even in Absence of Duty to “Indemnify”
The California Court of Appeal has held that a contractual indemnity clause required a subcontractor to “defend” a developer against claims involving the subcontractor’s work, even though the subcontractor was later found not negligent and thus had no duty to … Read More
No Liability for Negligent Investigation Where Loss is Not Covered
The California Court of Appeal has held that a first-party insurer can have no liability for the negligent investigation of a first-party property claim where the policy did not cover the cause of the damage. (Benavides v. State Farm General … Read More
EPL Exclusion Does Not Apply Where Subcontractor’s Employees Sue Insured
The California Court of Appeal has held that an employment practices liability exclusion in a CGL policy did not apply where a subcontractor’s employees sued the insured for a wrongful employment practices and false imprisonment. (North American Bldg. Maintenance, Inc. … Read More
D&O Insurer Not Obligated to Defend HOA for Breach of Contract
The California Court of Appeal has held that a D&O insurer had no duty to defend a homeowner’s association for alleged breach of contractual obligations under a construction contract. (Oak Park Calabasas Condominium Association v. State Farm Fire & Casualty … Read More
Agents and Brokers: Surplus Lines Broker Can Owe Duty of Care to Third Party
In a rather unusual case, the California Court of Appeal has held that a surplus lines broker who failed to obtain adequate coverage for an insured can owe a duty of care to a third party who was unable to … Read More