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January 8, 2015  

 
75px_malecki   Remembering Don Malecki

The insurance world in general and the National Underwriter Company in particular have lost a colleague and a friend. Don Malecki passed away on Friday, December 12th.

Don was a recognized insurance and risk management expert who spent over 50 years in the business as a writer, consultant, and expert witness. Don began his career as a fire underwriter and later as a supervising casualty underwriter. He began his writing career when he joined the staff of the Fire, Casualty, and Surety (FC&S) Bulletins, the National Underwriter Company, in 1966. Don left the National Underwriter Company in 1984 to start his own consulting practice, a practice in which he contributed his every working hour toward understanding the insurance business, and sharing that understanding and knowledge with all those seeking his guidance. Don was a recognized expert witness who was called upon numerous times over his career to testify in courts around the country as to the history and meaning of insurance policy language. Don was also an author and co-author of many books on insurance and risk management. He was past president of the Cincinnati Chapter of Chartered Property Casualty Underwriters (CPCU) and a member of the Society of Risk Management Consultants.

It is safe to say that Don Malecki was a giant in the insurance industry, a man who dedicated his life's work to learning and teaching about insurance coverage and risk management. Don will be greatly missed by those who benefitted in the past and still benefit now from his sharing of his time and knowledge, and he will be especially missed by those who knew him and worked with him. God Bless.
 Q&A of the Week
Blasting and Earth Movement

A Connecticut subscriber recently asked the following question:

Does the ISO HO–3 special form homeowners policy with the earthquake coverage endorsement provide coverage for a loss to the residence premises if blasting being conducted in the neighborhood caused cracking in the walls and windows of the homeowner's property?


ANSWER: An earthquake and earth movement are two different things. An earthquake is caused by sudden shaking of the ground caused by a disturbance deeper within the crust of the Earth. Most earthquakes occur when masses of rock straining against one another along fault lines suddenly fracture and slip. Blasting in the neighborhood does not constitute an earthquake, and therefor there is no coverage.

 
 Litigation Watch

Defamation Claim and the Employment-Related Practices Exclusion

The issue in this case was whether the insurer had a duty to defend and indemnify four doctors who are defendants in a third-party defamation claim. This case is Khatib v. Old Dominion Ins. Co., No. 1D13-4652, 2014 WL 6851418 (Fla. App. Dec. 5, 2014).

This case stems from a dispute between Ashchi and Khatib and others. Khatib and his associates wrested control of the First Coast Cardiovascular Institute (FCCI) from Ashchi. Ashchi sued Khatib and the others, alleging that Khatib and his associates made baseless allegations and published defamatory statements against Ashchi.

The insurance policy under which Khatib sought coverage for the lawsuit was issued by Old Dominion, and the policy insured FCCI and its executive officers and directors, but only with respect to their duties as officers and directors. When Khatib sought coverage, Old Dominion denied the coverage based on the employment-related practices exclusion found in one of the endorsements. That exclusion states that there is no coverage for any claim for damages for personal injury caused by an offense arising out of an insured's business where the personal injury also arises out of any employment-related practices such as defamation.

Khatib sued for coverage and the trial court ruled in favor of the insurer. This appeal followed.

The District Court of Appeal of Florida, First District, noted that a cursory consideration of the facts in this case shows that at least some of the wrongs alleged against Khatib and the others were performed by them with respect to their duties as officers and directors. Some of the wrongs alleged occurred while they were either discharging their obligation at a shareholders meeting or executing other official duties. The court also found that there was no indication in the complaint that the alleged defamatory statements were employment-related at all.

The ruling of the trial court was reversed. The appeals court found that Old Dominion owes a duty of defense to Khatib and his associates. As for the duty to indemnify, the court said that this would be dependent on further factual developments through discovery or at trial.

Editor's Note: The District Court of Appeal of Florida ruled that, in this instance, the employment-related practices exclusion did not preclude coverage under Coverage B of the general liability policy. The court said that a defamatory utterance might easily arise out of a company's business while not being employment-related. Case law from around the country cited by the court supported this conclusion.

 
   
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The Zalma Insurance Claims Library
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Insurance Claims: A Comprehensive Guide
The only source you'll need to successfully handle insurance claims from start to finish. More Info
Construction Defects Coverage Guide
Your single-source for identifying, insuring, investigating, prosecuting, and defending cases that result from construction defect claims. More Info
Mold Claims Coverage Guide
This guide will allow you to handle mold insurance claims and litigation resulting from mold or fungi related disputes with confidence. More Info
For more information about these titles Click Here
 
FC&S Team
Kelly Maheu, J.D.
Publisher
  Diane W. Richardson, CPCU
Consulting Editor
Christine G. Barlow, CPCU
Managing Editor, FC&S
  Diana B. Reitz, CPCU, AAI
Consulting Editor
David D. Thamann, J.D., CPCU, ARM
Managing Editor, FC&S Bulletins
  Katherine S. Caudill, J.D.
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Susan L. Massmann, CPCU
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  Emily Brunner
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Donald S. Malecki, CPCU
Contributing Editor
  Tosha Brinkman
Marketing Manager
Barry Zalma, Esq., CFE
Contributing Editor
  Donna Cozatchy
Creative Director
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