September 27, 2011
Last week, we summarized Susan Miller’s interview and how she created Miller’s Standard Insurance Policies Annotated. This week she highlights property/casualty insurance hot topics to tackle with Miller’s focusing on property coverage cases.
During the last 20 years, there has been enormous growth in the litigation of property insurance coverage provisions. No doubt this growth has been caused, at least in part, by the variety of new coverages offered by the insurance industry. Consider, for example, business interruption coverage. As a result of the attack on the World Trade Center, the insured have filed a variety of cases seeking business interruption coverage to compensate for the revenues lost during the aftermath of 9/11. Some property owners did not suffer direct physical loss, but only indirect losses from business formerly conducted with WTC tenants. This issue and many more, including the insurer’s failure to settle business interruption claims in “good faith”, have been litigated. These coverage provisions, as well as their annotations, are all included in Miller’s.
Recent hurricanes in the Gulf States as well as on the East Coast, in particular Hurricane Katrina in 2005, have also generated many coverage disputes which are still being litigated. Homeowners, and many commercial property owners, are often surprised to discover that their policies do not cover losses caused by “water”, a coverage which is available only under the Standard Flood Insurance Policy. However, both the Homeowners Policy and the Commercial Property Policies cover losses caused by “wind”. Many of the hurricane coverage cases address whether, and to what extent, the insured’s losses were caused by “wind” or by “water”, the efficient proximate cause doctrine, and the “anti-concurrent cause of loss clause” which now appears in both the Homeowners and Commercial Property Policies. These coverage provisions, thoroughly litigated in the hurricane cases, are also annotated in Miller’s.
Six years to the day after Hurricane Katrina, Hurricane Irene struck the Northeast. Vermont was particularly hit hard. And with such horrific damage, 250 roads buckled and closed, leaving people homeless, without water, electricity, etc. Very few people in Vermont have purchased flood insurance, and they will undoubtedly try to obtain coverage under the Homeowners and Commercial Property Policies. Some courts will find, at least to some extent, that losses were caused by wind and therefore covered. But an issue that will also undoubtedly arise in all the Northeastern states affected by Hurricane Irene is whether the insurance agent had a duty to obtain flood insurance coverage. Miller’s annotates not only the cases interpreting all the relevant provisions in the Homeowners, Commercial Property, and Standard Flood Insurance Policies; it even annotates cases litigating the agent’s failure to procure flood insurance, or enough flood insurance.
Lastly, another hot topic is “collapse” coverage, i.e., at what point has a home or a commercial building “collapsed” and therefore a covered loss? Although the insurance companies substantially revised the definition of “collapse” a few years ago, subsequent decisions by state and federal courts have demonstrated that the policies’ current definition of “collapse” is still unclear. In some jurisdictions, a structure with a sagging roof, leaning walls, or rotting beams, but still standing, may nevertheless be found by the court to have “collapsed”. The term “collapse” will continue to generate litigation for years to come.
About the Author – Susan Miller
If you have other related hot topics, please leave a comment. We would love to know.