| Q&A of the Week |
Insurance for a Rented Condo
A Texas subscriber recently asked the following question:
What is the correct coverage form to insure a condominium unit that is rented or held for rental, but is not the insured's/owner's residence premises?
ANSWER: The ISO HO 17 33 provides coverage for condominiums rented to others. Personal property of the insured is excluded as he is not present at the residence, and theft is excluded for money, securities, bullion, gold, goldware, personal records, tickets, jewelry, watches, furs, and gemstones. Business is also excluded except for the rental of the unit itself. The rest of the HO 00 06 applies as normal. Read More |
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| What's New This Week in FC&S |
The Start of Ride-sharing Insurance
Ride-sharing is the practice of using a personal automobile to pick up someone and give them a ride to a specific destination for a fee. The potential driver signs up with a Transportation Network Company (TNC) that generally checks the individual's background and driving record and inspects the vehicle. Read More |
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| Litigation Watch |
Issues on the Duty to Defend
This case arises from a dispute between an insurer and its insured over the insurer's duty to defend the insured in a lawsuit. This case is Surety Mechanical Services, Inc. v. Phoenix Ins. Co., Civil No. 1:12-cv-3242 (NLH/AMD), 2014 WL 2921015 (D. N.J. June 27, 2014).
Surety entered into a contract with Cape May County Vocational Technical School District to provide mechanical services for the school's heating, ventilation, and air conditioning system. A few years after the work was finished, the school filed a lawsuit against Surety alleging that the work was performed negligently and that Surety failed to perform its contractual obligations in a workmanship manner. The school claimed it suffered compensatory and consequential damages.
Surety submitted the claim to its insurer, Phoenix Insurance Company. The insurer denied coverage. Surety filed for summary judgment on the issues of whether Phoenix had a duty to defend and whether Phoenix was obligated to reimburse Surety for the costs it already incurred on the school litigation. Phoenix filed its opposition and a cross motion for summary judgment on the same issues.
The United States District Court, New Jersey, noted that an insurer's duty to defend is based on its duty to pay, which in turn is dictated by the terms of the insurance policy; an insurer has a duty to defend its insured against any claims that are potentially coverable under the policy. However, the court also said that an exception to this general rule holds that an insurer is not obligated to defend its insured if it intends to dispute coverage based on a question of fact that is not material to the underlying litigation. Therefore, when the insurer intends to dispute coverage based on an issue that is not material to the underlying case, the insured must bear the initial burden of defending itself, but the insurer must reimburse the insured if it is later determined that the claim was actually covered by the policy. Read More
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| FC&S Ask the Experts |
Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you?
Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials).
Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update.
Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by clicking here. |
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