California Insurance Litigation Blog

California Insurance Litigation Blog

Category Archives: Policy Interpretation

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Helpful Tips to Policyholders: Pay Close Attention to Plan’s Limitations Provisions

Posted in Case Updates, Disability Insurance, ERISA, Insurance Questions and Concepts, Policy Interpretation, Statute of Limitations
Do you have a disability insurance policy, health insurance policy or life insurance policy through your work?  If you do, you should read this article as you may miss some important deadlines if you do not. The Supreme Court’s recent  holding that the limitations periods in employer-sponsored plans are enforceable, even where such limitations periods … Continue Reading

The Reasonable Expectations of the Covered Party, Even an Additional Insured, Determines the Interpretation of Ambiguous Policy Language

Posted in Case Updates, Duty to Defend, General Liablity, Policy Interpretation
In California, courts have long held that where a policy provision is ambiguous because it is susceptible to multiple interpretations, the reasonable expectation of the covered party governs.  But which parties’ objectively reasonable expectations should govern where there are both a named insured and an additional named insured claiming coverage?  In its significant decision in … Continue Reading

Supreme Court Looks at ERISA Plan Terms to Govern Limitation Periods to File Lawsuits

Posted in Case Updates, Disability Insurance, ERISA, Policy Interpretation, Statute of Limitations
In a highly anticipated decision, a unanimous United States Supreme Court held that insureds with employer-sponsored plans are contractually bound by the limitations periods set forth in their plan documents.  These limitations periods, which specify when insureds must file any legal actions under the Employee Retirement Income Security Act of 1974 (“ERISA”), are enforceable so … Continue Reading

Insurers Have a Duty to Defend at the Outset of Litigation Even If a SIR Has Not Been Exhausted

Posted in Case Updates, Commercial General Liability Insurance, Duty to Defend, General Liablity, Policy Interpretation
Insurers providing general liability insurance cannot shirk their duty to defend insureds at the outset of litigation by relying on self-insured retention (SIR) provisions in those policies unless the policies expressly and unambiguously make the insurer’s duty to defend contingent upon the SIR.  So held the Fourth District Court of Appeals in American Safety Indemnity … Continue Reading

Property Insurers May Be Liable to Owners for Loss of Rents Resulting from Damaged Property

Posted in Breach of Contract, Case Updates, Insurance Bad Faith, Policy Interpretation, Property & Casualty Insurance
Commercial property owners may recover lost rental income from their insurer if they are unable to rent out damaged property, absent clear policy exclusions.  The California Court of Appeal recently held the owner of commercial property has a reasonable expectation of coverage for loss of rent, even if the property was not leased out at … Continue Reading

Insurer’s General Reservation of Rights Does Not Entitle Insured to Cumis Counsel

Posted in Commercial General Liability Insurance, Directors & Officers Insurance, Duty to Defend, Policy Interpretation, Property & Casualty Insurance
In a recent ruling, the California Court of Appeal held that an insurer’s general reservation of rights to deny coverage of damages outside its policy does not create a conflict of interest with the insured, such that the insured in entitled to Cumis counsel.  The decision in Federal Insurance Co. v. MBL, Inc. __ Cal. … Continue Reading

California Court of Appeal Affirms Ruling That a Mental Disorder Accompanied by Physical Symptoms is Not Subject to a Policy’s Two-Year Limitation for Mental Claims

Posted in Disability Insurance, Insurance Bad Faith, Policy Interpretation
In 2009, the California Court of Appeal in Bosetti v. The United States Life Ins. Co., 175 Cal. App. 4th 1208 (2009) addressed whether a two-year benefits limitation on disability insurance payments for “mental, nervous or emotional disorder[s]” could properly serve to limit benefits payable to an insured who was disabled from depression and anxiety, … Continue Reading

Failure by ERISA Administrator to Comply With Its Duties of Proper Notification and Review May Result in Its Failure to Assert the Statute of Limitations

Posted in Case Updates, Disability Insurance, Policy Interpretation
Recently, the Ninth Circuit Court of Appeals ruled that an ERISA administrator must make a “clear and continuing repudiation” of a claim, in compliance with its duties of proper notification under ERISA, in order for a claim to “accrue” and thus start the statute of limitations clock on filing a lawsuit.  In Withrow v. Basch … Continue Reading

Why Does The Pollution Exclusion in California Insurance Policies Exclude Asbestos Building Contamination But Not Pesticide Building Contamination?

Posted in Case Updates, Commercial General Liability Insurance, Duty to Defend, Homeowners Insurance, Insurance Bad Faith, Legal Articles, Policy Interpretation, Property & Casualty Insurance
According to a recent California appellate court decision, a contractor’s negligent release of asbestos fibers during the removal of asbestos-containing acoustical spray in a condominium complex is excluded by the pollution exclusion in a homeowner association’s property and liability policy, despite a 2003 California Supreme Court ruling that a contractor’s negligent spraying of pesticide in … Continue Reading

New ED CA Decision is a Feast of First-Party and Third-Party Insurance Coverage and Bad Faith Principles

Posted in Case Updates, Commercial General Liability Insurance, Duty to Defend, General Liablity, Insurance Bad Faith, Policy Interpretation, Property & Casualty Insurance
Every now and then a court decision comes along that is a virtual one-stop shop for basic insurance coverage and bad faith principles—a primer for newbie insurance attorneys and a refresher for seasoned litigators.  Chief Judge Anthony Ishii’s recent decision granting in part and denying in part an insurer’s motion for summary judgment on a … Continue Reading

New Ninth Circuit Decision Says California Law Requires Strict Compliance with Insurance Policy Warranty

Posted in Case Updates, Insurance Bad Faith, Policy Interpretation, Property & Casualty Insurance
Noting a paucity of recent California Supreme Court precedent on whether strict or merely substantial compliance with an insurance warranty is required to invoke coverage, the Ninth Circuit Court of Appeals recently held that California law requires strict compliance with a pilot warranty in an aviation insurance policy as a condition precedent to coverage.  Trishan … Continue Reading

Court of Appeals Limits the Application of the Genuine Dispute Doctrine in Third Party Insurance Coverage Cases

Posted in Insurance Bad Faith, Policy Interpretation
The genuine dispute doctrine received another blow as the California Court of Appeals held that the doctrine may not be used to refuse settlement in third party coverage cases.  The recently decided case of Howard v. American National Fire Ins. Co.,  __Cal. App. 4th __,  2010 WL 3156851 (decided August 11, 2010), involved allegations of … Continue Reading