We previously reported that the California Supreme Court would be addressing the split in California authority on the issue of whether an excess insurer may sue a primary insurer for failure to settle a case within primary limits in the absence of an excess judgment against the insured.
Continue ReadingUpdate: Ace American Ins. Co. v. Fireman’s Fund Ins. Co. Settled
Ninth Circuit Holds That Diamond Heights Represents Controlling California Law On The Duty Of An Excess Insurer To Accept A Reasonable Settlement
In Teleflex Medical Inc. v. Nat’l. Union Fire Ins. Co. of Pittsburgh, PA (March 21, 2017) 2017 WL 1055586, the Ninth Circuit affirmed a jury verdict in a bad faith case against an excess insurer for rejecting a settlement approved by insured and primary insurer, and refusing to take over the insured’s defense.
Continue ReadingNinth Circuit Affirms Lower Court’s Determination That Business Risk Exclusions Broadly Bar Coverage For General Contractor
General liability policies contain what are called “business risk” exclusions which generally exclude coverage for damage to: (1) “that particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations”; and (2) “that particular part of any property that must be restored, repaired or replaced because Your Work was incorrectly performed on it.” These exclusions have been interpreted by California courts to be an expression of a general principle of insurance law; that insurers are not warrantors of their insureds’ products. (See, Armstrong World Indus., Inc. v. Aetna Cas. & Sur. Co.(1996) 45 Cal.App.4th 1, 110-111.) Specifically, courts have repeatedly held that “the risk of replacing and repairing defective materials or poor workmanship has generally been considered a commercial risk which is not passed on to the liability insurer.” (Maryland Cas. Co. v. Reeder (1990) 221 Cal.App.3d 961, 972.)
Continue Reading“Other Insurance” Clause Enforced Where Competing Clause Was Ambiguous
In St. Paul Fire and Marine Insurance Company v. Insurance Company of the State of Pennsylvania (N. D. Cal. March 7, 2017), 2017 WL 897437, the district court recently compared “other insurance” clauses in insurers’ excess policies and enforced a clear “excess” clause over a clause in another policy that conflicted with other language in that policy.
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