New York Insurance Coverage Law Update

October 1, 2014 | Insurance Coverage

SUM Benefits Triggered In $300,000/$300,000 Policy Where Other Driver’s Policy’s Limits Were $100,000/$300,000

The insured alleged that he was injured in an accident caused by the driver of another car who was insured by a “split limit” policy providing a bodily injury liability limit of $100,000 per person and $300,000 per accident.  Because those limits were less than the $300,000/$300,000 limits available to the insured, the court ruled that the supplementary uninsured/underinsured motorist (“SUM”) provision of the insured’s policy was triggered.  [Government Empls. Ins. Co. v. Lee, 2014 N.Y. Slip Op. 05642 (2d Dep’t Aug. 6, 2014).]

Bicycle Rider’s Alleged Injuries From Open Taxi Door Arose Out Of “Use Of A Motor Vehicle,” Court Decides

The plaintiff alleged that she was injured while riding her bicycle when she was struck by an opened, rear passenger-side door of a taxi, which left the scene of the accident.  The plaintiff sued the Motor Vehicle Accident Indemnification Corporation, which argued that the plaintiff’s “hit and run” complaint should be dismissed.  The court denied the motion, finding that the opening and closing of the passenger door was “part of the use of a taxi” and that injuries caused by the door making contact with the plaintiff arose “out of the . . . use of a motor vehicle.”  [Samarskaya v. Motor Veh. Accident Indemnification Corp., 2014 N.Y. Slip Op. 32453(U) (Sup Ct. N.Y. Co. Sep. 18, 2014).]

Insurer Precluded From Denying Coverage Where It Had Not Copied Third Party Plaintiff On Disclaimer To Insured Third Party Defendant

A construction worker employed by Bando Construction alleged that he was injured while working at a site Bando leased from Key Fat Corporation.  The worker sued Key Fat, which filed a third-party action against Bando.  Bando’s insurer informed Bando and Key Fat’s insurer that it was disclaiming coverage, but it did not inform Key Fat of the disclaimer.  After judgment was entered in favor of the worker against Key Fat, Key Fat obtained judgment against Bando.  Key Fat and its insurer then sued Bando’s insurer.  The court concluded that Bando’s insurer was precluded from denying coverage because it failed to give Key Fat notice of its disclaimer in violation of N.Y. Insurance Law § 3420(d).  [Key Fat Corp. v. Rutgers Cas. Ins. Co., 2014 N.Y. Slip Op. 06060 (2d Dep’t Sep. 10, 2014).]

 Mechanic Injured While Driving Customer’s Loaner Car Could Recover SUM Benefits

A mechanic injured while driving a customer’s loaner car back to the dealer sought supplementary uninsured/underinsured motorist (“SUM”) benefits from the customer’s insurer.  The court rejected the insurer’s contention that the mechanic was not entitled to SUM coverage, finding that the loaner car was a “temporary substitute car” covered under the customer’s policy.  [Matter of State Farm Mut. Auto. Ins. Co. v. O’Brien, 2014 N.Y. Slip Op. 06096 (2d Dep’t Sep. 10, 2014).]

Policy Excludes Coverage For Claims Against Village Officials Arising From Alleged “Taking”

After property owners sued officials of the Village of Muttontown for allegedly violating their constitutional rights in connection with a “taking” of their real property, the Village’s insurance company asked a court to declare that it had no duty to defend or to indemnify the defendants.  The court agreed with the insurer, finding that the claims against the defendants all arose out of a “taking,” which was excluded from coverage by the policy’s “clear and unambiguous language.”  [Scotsdale Indem. Co. v. Beckerman, 2014 N.Y. Slip Op. 06071 (2d Dep’t Sep. 10, 2014).]

 Court Rules That Insured May Discover Reserve Information

A competitor sued HRB Tax Group, Inc., alleging false advertising.  HRB’s insurer denied coverage and sought a declaration of no coverage, claiming that it had insufficient information to value the claim because of HRB’s failure to cooperate.  HRB counter-claimed and sought to discover the insurer’s reserve for the underlying lawsuit.  The court acknowledged that a number of courts have refused to order discovery of reserve information, but it granted HRB’s motion under the circumstances of the case.  The court emphasized, however, that it was expressing no opinion as to the ultimate admissibility of that information at trial.  [National Union Fire Ins. Co. of Pittsburgh, PA v. H&R Block, Inc., 2014 U.S. Dist. Lexis 123966 (S.D.N.Y. Sep. 4, 2014)].

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