Milling attorneys are involved in many aspects of insurance law on both insurance coverage and defense issues.  Our attorneys are often appointed to defend insureds against all types of liability claims. In addition, Milling attorneys provide coverage opinions to either insurers regarding coverage available under particular insurance forms and policies. Often coverage issues are litigated on behalf of insurers to determine coverage. Our attorneys are experienced with numerous type of insurance policies and forms including, but not limited to, those that contain the following terms and issues:

ABSOLUTE POLLUTION EXCLUSION

For decades “comprehensive” and/or commercial general liability (CGL) insurers experimented with language to exclude coverage for pollution liability after years of catastrophic claims by third-parties resulting from pollution incidents. In 1986, the insurance industry entity, the Insurance Services Office, Inc. (ISO), developed a standard pollution exclusion that has been used in many post-1986 CGL policies. This exclusion earned its name due to its removal of the “sudden and accidental” exception to the 1973 CGL’s standard pollution exclusion. While it does remove coverage for most pollution events, there are still some exceptions related to products and completed operations liability, and certain off-premises work by contractors, among others. Because the exclusion is not truly “absolute,” a more appropriate description for it is “broad form pollution exclusion.” Other insurance entities have developed their own manuscript exclusions with the intent of excluding liability for pollution claims altogether.

ADDITIONAL INSURED

Often, a contract will contain an obligation for one party to name another party, person, or organization as an “additional insured” under an existing liability insurance policy so as to bolster an obligation to provide indemnity. The additional insured coverage serves as a way of backing up the promise of indemnification. If the indemnity agreement proves unenforceable for some reason, the indemnitee may still be able to obtain coverage for its liability by making a claim directly as an additional insured under the indemnitor’s CGL policy. These types of claims may often run afoul of state “anti-indemnity” statutes intended to prevent inequities foisted upon smaller contractors by larger commercial entities. Both Louisiana and Texas have such statute.[1]

ALL RISKS COVERAGE

Some policies of property insurance cover nearly all risks of loss arising from any fortuitous cause except those that are specifically excluded. This is in contrast to named perils coverage that restricts coverage to specific listed causes of loss. Because the term “all” suggests that there are no exceptions or exclusions, some insurers use the term “open perils” or “special perils” instead of “all risks.”

AUTOMOBILE INSURANCE

Insurance that provides both first-party property coverage and liability coverage for automobiles and certain other vehicles is referred to as “auto insurance.” This coverage may include liability coverage together with collision and/or comprehensive coverage for damage to the vehicle itself or property located therein. The policy’s liability coverage extends coverage for certain personal injuries or property damage to third parties. In addition to these two types of coverage, an insured may also purchase Uninsured/Underinsured Motorist Coverage that provides coverage where another motorist has caused harm to an insured but has no coverage or inadequate coverage to compensate the claimant.

BAD FAITH EXTRA-CONTRACTUAL EXPOSURE

“Bad Faith” is a term describing actionable, unfair conduct by an insurance company that exceeds mere negligence, to rise to the level of arbitrary and capricious refusal or delay of payment of a claim without probable cause. Bad faith damages, also known as extracontractual damages, are often substantial and are addressed by specific state statutes that provide remedies where insurance bad faith occurs.[2]

BUILDERS RISK POLICY

“Builders Risk Policy” is a type of property insurance policy that covers property in the course of construction, including buildings and other structures, vessels and drilling rigs and work platforms, among other risks. There are many different available forms including manuscript, and some are written on inland marine (rather than commercial property) forms. Coverage is usually written on an all risks basis and may apply not only to property at the construction site, but also to property at off-site storage locations and in transit. Builders risk insurance can be written on either a completed value or a reporting form basis; in either case, the estimated completed value of the project is used as the limit of insurance.

BUSINESS INCOME COVERAGE

While some commercial property insurance covers physical damage to property, other coverage is available for loss of income suffered by a business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations. Coverage typically applies to loss suffered during the time required to repair or replace the damaged property. Business income coverage (BIC) is also referred to as business interruption coverage.

CASUALTY INSURANCE

One of the largest markets for insurance involves legal liability to third parties imposed on an insured business for personal injuries or death of third parties or for damage to property of others. This coverage may be provided on any number of forms available in the insurance market or generated by an insurer’s own manuscript form and typically contains a number of exclusions to coverage depending on the needs and risk exposure of a particular insured.

COMMERCIAL GENERAL LIABILITY (CGL) POLICY

Most businesses obtain a standard insurance policy to protect them against liability claims for bodily injury (BI) and property damage (PD) arising out of premises, operations, products, and completed operations; and advertising and personal injury (PI) liability. The CGL policy was introduced in 1986 and replaced the “comprehensive” general liability policy.

DIRECT ACTION

Some States allow an injured third-party to pursue a claim directly against a tortfeasor and the tortfeasor’s liability insurer for payment under a liability policy. Absent a specific statute allowing for such a claim, an injured third-party would normally not be able to sue the tortfeasor’s insurer directly since the injured party has no rights under the tortfeasor’s insurance policy. Louisiana has such a statute.[3]

EXCESS

Many individuals and commercial entities will obtain primary insurance up to a certain limit but also obtain “excess” insurance above that primary limit to cover unanticipated or catastrophic losses. There are many different forms of excess insurance including umbrella, following form, bumbershoot and pure excess. Some of these policies may include language for a self-insured retention which remains the responsibility of the insured for losses not covered by the primary policy. In addition, excess coverage can be specific excess, which begins paying when any single claim reaches the preestablished retention, or aggregate excess, which begins paying when the cumulative cost of all claims reaches the preestablished retention.

EXCLUSIONS

While a policy may ensure certain risks, most policies also contain provisions referring to hazards, perils, circumstances, or property not covered by the policy. Exclusions are usually listed in the “Declarations” page and are also contained in the coverage form or causes of loss form used to create the insurance policy.

HOMEOWNERS POLICY

Most homeowners obtain a package insurance policy providing property and liability coverages for damage from wind, hail, fire and other risks which damage their homes. Various forms are available depending on the type of dwelling insured and the scope of protection to be covered. It is the most commonly used insurance policy protecting homes in the United States. Particularly important in Louisiana, these policies often contain a “Hurricane Deductible” which provides for a higher deductible in the case of a “named storm”, usually based upon a percentage of the value of the insured dwelling. These policies usually contain an exclusion for flood risks which must be covered by a separate flood insurance policy. Homeowner policies often result in coverage disputes requiring arbitration or litigation.

INLAND MARINE COVERAGE

While this type of coverage mentions the word “marine”, this coverage generally applies to transit over land, certain types of moveable property, instrumentalities of transportation (such as bridges, roads, and piers), instrumentalities of communication (such as television and radio towers), and legal liability exposures of bailees. Many inland marine coverage forms provide coverage without regard to the location of the covered property; these are sometimes called “floater” policies. These policies may also include particular “riders” for specific types of equipment to be included in the coverage afforded. As a group, inland marine coverage forms are generally broader than property coverage forms.

MARINE INSURANCE

This type of insurance may provide commercial ocean marine coverage (primarily “blue-water” based risks) as well as coverage for coastal, inshore and river commercial risks (“brown-water”). As the coverage has been available for centuries, there are many unique but established forms including hull (first party property/named perils), Protection & Indemnity (“P & I”) (liability), bumbershoot (excess), marine general liability (“MGL”), yacht and cargo, as well as specialized endorsements such as the marine employer’s liability (“MEL”) endorsement.

MEDICAL MALPRACTICE INSURANCE

These types of policies provide coverage for the acts, errors, and omissions of physicians and surgeons, encompassing physicians professional liability insurance, hospital professional liability (HPL) insurance, and allied healthcare (e.g., nurses) professional liability insurance. Although the majority of policies are written with a claims-made coverage trigger, such coverage is sometimes available on an occurrence basis. Typical exclusions are for: intentional/criminal acts, punitive damages, sexual misconduct, and specialized procedures (e.g., radial keratotomy) for which coverage may be “bought back” in return for additional premium. In addition to commercial insurers, medical malpractice coverage is also available in most states through physician-owned insurance companies known as “bedpan mutuals.”

OPERATORS EXTRA EXPENSE (OEE)

The unique liabilities and risks of the oil and gas exploration and production industry require a specialized policy available to oil or gas well “Operators” that covers losses resulting from a well “blow-out.” This coverage includes “control of well”, pollution, stuck drill stem, evacuation expense, delays, and care, custody, or control (CCC) exposures.

OTHER INSURANCE CLAUSE

When two or more insurers may provide coverage for a particular risk and a loss occurs, ultimate liability is usually determined by a provision found in both property and liability insurance policies establishing how loss is to be apportioned among insurers when more than one policy covers the same loss. These provisions vary: some policies provide no coverage when other insurance is in place, some pay a pro rata share, and others apply in excess. They are intended to avoid duplicate payments for the same loss.

POLLUTION INSURANCE

In this day and age significant legal liability often arises out of the release of noxious, hazardous or toxic substances, including oil -related products and compounds into air, water, and/or on land. Typically, liability from pollution is normally excluded to some degree by the general, auto, and umbrella liability policies. As a result, a market has arisen for pollution insurance to cover such liabilities. These may include response costs for responding to a particular spill or release, remediation expenses to restore third-parties’ damaged property, and liability coverage to third parties for other liabilities including liability for personal injuries.

PROPERTY INSURANCE

First-party property insurance normally indemnifies the owner or user of property for its loss, or the loss of its income-producing ability, when the loss or damage is caused by a covered peril, such as fire or explosion. In this sense, property insurance encompasses inland marine, boiler and machinery (BM), and crime insurance, as well as what was once known as fire insurance, now simply called property insurance: insurance on buildings and their contents.

SUDDEN AND ACCIDENTAL

For many decades coverage disputes arose as a result of pollutants which seeped onto or within real property resulting in pollution liability claims. The insurance industry developed a pollution exclusion to avoid liability for such risks. An exception to the 1973 comprehensive general liability (CGL) pollution exclusion preserved coverage with respect to pollution incidents that were “sudden and accidental.” Prolonged litigation tested whether the term sudden meant merely unexpected, as some dictionary definitions specify, or whether the term necessarily has a temporal element—referring to a brief time period, or being synonymous with all at once. A majority of courts eventually adopted the latter view.

WHARFINGER LEGAL LIABILITY COVERAGE

This is a type of marine insurance that affords coverage to a wharf or pier owner-operator for the liability exposures encountered in the course of business. The policy provides care, custody, and control (CCC) coverage to the owner-operator for the damage to vessels and the vessels’ cargo while moored at the owner-operator’s facility for which the owner-operator is legally liable.

WAIVER OF SUBROGATION

Waiver of Subrogation is an agreement between two parties in which one party agrees to waive subrogation rights against another in the event of a loss. The intent of the waiver is to prevent one party’s insurer from pursuing subrogation against the other party. Generally, insurance policies do not bar coverage if an insured waives subrogation against a third party before a loss. However, coverage is excluded from many policies if subrogation is waived after a loss because to do so would violate the principle of indemnity.

Please contact Milling attorneys to address your insurance defense and coverage issues.

ATTORNEYS