Insurance Update

Cases discussed in our January Insurance Update answer these questions:

• A commercial crime policy covers property that the insured “holds for others.”  In the context of a phishing scheme, does “hold” mean the insured must possess the diverted funds or simply have some control over them?
• Federal and state agencies order a manufacturer to close and remediate its ponds.  The manufacturer complies and then notifies its insurer after the cleanup is done.  Was it reasonable for the policyholder to first notify its insurer after it finished the cleanup?  Was the insurer prejudiced?
• A pharmaceutical company is embroiled in opioid litigation.  It’s defended by its primary insurer but doesn’t notify an excess insurer for more than two years.  Was notice too late under the excess claims-made and reported policy?  Must the excess insurer show that it was prejudiced?
• A “driver’s helper” is injured when the truck he is riding in skids off the road.  His contract with the trucking company describes him as an independent contractor.  Does that mean the employee exclusions in the auto policy do not apply?
• A contractor is hired to renovate a school but disturbs asbestos in the process.  Its liability policy has an asbestos exclusion.  Does the efficient proximate cause theory override the exclusion?
• A manufacturer stores its goods in a warehouse.  A windstorm cuts a hole in the roof and damages the manufacturer’s goods.  Plastic sheeting is installed to temporarily cover the hole.  A week later, the plastic sheeting fails, activating the warehouse’s sprinkler system and damaging more goods.  How many deductibles apply?  Must the warehouse’s liability policy contribute with the manufacturer’s property policy as “other insurance”?

We hope that you find these cases informative.

Rob Tugander and Greg Mann