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DIRECTORY AND CAPABILITIES

Will European Insurers’ Positive Response to COVID-19 Claims Influence US Insurers?

August 10, 2020 — Sergio F. Oehninger & Daniel Hentschel - Hunton Insurance Recovery Blog
Last month we wrote a piece concerning AXA’s agreement to pay COVID-19 related business interruption claims by a group of restaurants in France after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under its insurance policies. AXA reportedly has already agreed to pay over 200 COVID-19 related claims. Another European insurer recently made headlines for similar reasons. Despite initially denying liability, Swiss insurance company, Helvetia Insurance, announced that most of its policyholders in the hospitality industry have accepted settlements following coverage disputes for COVID-19 related business interruption losses. The settlements reportedly included policyholders from Switzerland, Austria, and Germany. The positive response from the European insurers appears to have influenced the insurance industry across the continent. For instance, in the U.K., the Financial Conduct Authority announced that it is taking certain insurers to court to seek clarity as to coverage for COVID-19 related losses. In Germany, the government and a group of insurers reached an agreement whereby the government will pay for 70% of business interruption losses for policyholders in the hospitality industry, and the insurers will pay for half of the business interruption losses not covered by the government. Reprinted courtesy of Sergio F. Oehninger, Hunton Andrews Kurth and Daniel Hentschel, Hunton Andrews Kurth Mr. Oehninger may be contacted at soehninger@HuntonAK.com Mr. Hentschel may be contacted at dhentschel@HuntonAK.com Read the court decision
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Revamp to Nationwide Permits Impacting Oil and Gas Pipeline, Utility and Telecom Line Work

March 29, 2021 — Alex P. Prochaska, Jones Walker LLP - ConsensusDocs
To avoid delay costs and penalties, contractors involved in pipeline and utilities construction maintenance, repair and removal need to understand how the 43 year old Nationwide Permit (NWP) regime has changed specific to the NWP 12 and what is now required for compliance. This change is important for contractors who construct, maintain, or repair pipelines that cross or impact waters of the United States, including wetlands. NWPs are a useful tool to streamline construction of a pipeline project, but it is important for contractors to know when certain terms and conditions still apply to the particular NWP and those that have been eliminated. On January 13, 2021, the United States Army Corps of Engineers (the Corps) published a final rule that reissued and modified twelve existing NWPs and issued four new NWPs that will take effect on March 15, 2021.1 The remaining 40 NWPs that were not reissued or modified under this rule will continue under the general conditions and definitions of the January 6, 2017 final rule. Read the court decision
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Reprinted courtesy of Alex P. Prochaska, Jones Walker LLP
Mr. Prochaska may be contacted at aprochaska@joneswalker.com

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Insurance Policy Language Really Does Matter

August 19, 2015 — Craig Martin – Construction Contractor Advisor
The debate continues on whether a subcontractor’s faulty work constitutes property damage and an occurrence such that the insurer must cover the claim. The most recent court to weigh in on this issue is the New Jersey appellate court (one step down from the New Jersey Supreme Court) in Cypress Point Condominium Association, Inc. v. Adria Towers, LLC. In this case, the condominium association sued the general contractor, who also acted as the developer, and subcontractors for faulty workmanship. The condominium association also sued the insurer for the general contractor, demanding payment of consequential damages caused by a subcontractor’s faulty work. The trial court granted summary judgment to the insurer, holding that the subcontractor’s faulty work was not property damage and thus not an occurrence under the Commercial General Liability (CGL) insurance policy, so no coverage. The appellate court reversed the trial court’s decision, finding that the claims for consequential damages caused by faulty workmanship constituted property damage and an occurrence as defined in the policy. This was a shift from earlier opinions in New Jersey. Read the court decision
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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

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Insurer Springs a Leak in Its Pursuit of Subrogation

August 21, 2023 — Katherine Dempsey - The Subrogation Strategist
In Nationwide Prop & Cas. Ins. Co. v. Fireline Corp., No. 1:20-cv-00684, 2023 U.S. Dist. LEXIS 104241, the United States District Court for the District of Maryland (District Court) considered whether the events giving rise to the plaintiff’s claims fell within the scope of a previously formed agreement, thereby rendering the plaintiff’s claims subject to the agreement’s time limitation and waiver of subrogation provisions. The District Court found that the claims fell within the scope of the agreement. The plaintiff, Nationwide Property & Casualty Insurance Company (Insurer), provided property insurance to Maple Lawn Homeowners Association, Inc. (Maple Lawn) for common property located in Fulton, Maryland, including a community center (the Subject Premises). On January 18, 2018, Maple Lawn entered into an Inspection Agreement (the Agreement) with defendant, Fireline Corporation (Fireline), wherein Fireline agreed to provide:

• annual fire alarm inspection and testing services,
• quarterly sprinkler inspection and testing, and
• annual portable fire extinguisher testing and inspection.

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Reprinted courtesy of Katherine Dempsey, White and Williams LLP
Ms. Dempsey may be contacted at dempseyk@whiteandwilliams.com

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May Heat Wave Deaths Prompt New Cooling Rules in Chicago

July 25, 2022 — The Associated Press (Don Babwin) - Bloomberg
Chicago (AP) -- A month after three women were found dead inside their stifling hot apartments at a Chicago senior housing facility, the City Council on Wednesday passed new cooling requirements for residential buildings. Under the rules approved by the Council's Zoning Committee on Tuesday and the full Council on Wednesday, any new construction of senior facilities and larger residential buildings must include permanent air conditioning, giving them the same requirements already in place for nursing homes. Any time the heat index climbs above 80 degrees, those buildings must run their air conditioning systems. Existing housing for older people can use portable cooling and dehumidification until May 2024, when they will be required to have permanent equipment installed. Read the court decision
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Reprinted courtesy of Bloomberg

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Surety’s Several Liability Under Bonds

March 20, 2023 — David Adelstein - Florida Construction Legal Updates
When a payment or performance bond is issued on behalf of its bond-principal, the surety is jointly and severally liable with its bond-principal. This means the surety has several liability under the bond, i.e., you don’t need to pursue the principal of the bond to pursue liability under the bond, which is a separate written intrument. Thus, if you are claiming damages of $500,000, by way of example, you can sue both the principal and surety under the bond, you can ONLY sue the principal under the bond (which is rarely practical), or you can ONLY sue the surety under the bond (which, oftentimes, is very practical). In many instances where I am pursuing a bond claim on behalf of a client, particularly a payment bond claim, I only sue the surety and do not sue the bond-principal unless there are certain strategic reasons in doing so. This is because of the surety’s several liability under the bond and there may be solvency issues with the principal or contractual reasons that, strategically, make much more sense to exclude the principal from the action. In MJM Electric, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2023 WL 2163087 (M.D.Fla. 2023), an electrical subcontractor was hired to perform electrical work by the prime contractor. The prime contractor had a payment bond. The project was delayed for two years. The electrical subcontractor claimed the prime contractor failed to compensate it for significant delays and out of scope work. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Where Standing, Mechanic’s Liens, and Bankruptcy Collide

September 17, 2018 — Christopher G. Hill - Construction Law Musings
I have spoken often about mechanic’s liens and the implications of such liens as they relate to bankruptcy here at Construction Law Musings. A recent case out of Loudoun County, Virginia added another wrinkle to this discussion, that of standing and what happens on conveyance of the property and what interest in the property is required to allow a party to seek removal of the mechanic’s lien. In Leesburg Bldg. P’rs LLC v. Mike Berger Inc. the Loudoun County Circuit Court faced the following scenario. Leesburg Building Partners developed certain condominiums and hired Lansdowne Construction to perform the work as general contractor and paid Landsdowne in full for the work. Lansdowne hired Mike Berger, Inc. (“MBI”) to perform concrete work for the project. Landsdowne didn’t pay MBI approximately $48,000.00 and subsequently filed for bankruptcy. MBI, seeking to protect it’s interest in the money it was owed, recorded a mechanic’s lien on the property. Leesburg Building Partners filed an action to declare the lien invalid and have it removed from the property based upon its “payment defense” and the fact that it had paid Landsdowne in full. A relatively simple scenario and one that has been discussed before here at Musings. Not so fast. . . Read the court decision
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Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Deductibles Limited to Number of Suits Filed Against Insured, Not Number of Actual Plaintiffs

December 08, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The court limited the number of deductibles to the counterclaims filed against the insured, not the more than 600 plaintiffs who were parties to the three underlying lawsuits. Probuilders Spec. Ins. Co. v. Yarbrough Plastering, 2016 U.S. Dist. LEXIS 134959 (E.D. Calif. Sept. 29, 2016). Yarbrough entered into contracts with Lenox Homes to provide stucco and drywall services in the homes Lenox would build. Each contract required Yarbrough to indemnify Lenox for any claims resulting from property damage arising out of the performance of the contract. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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