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April 30, 2015 |
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| Q&A of the Week |
Is Business Income Coverage Triggered If Dentist Abandons Practice after a Fire?
An Iowa subscriber recently asked the following question:
Our insured had total loss fir and is insured under a businessowners policy. The insured is a dentist and determined that as of this loss she would abandon this practice as she had other locations that were more productive.
Since there was a direct loss from a covered peril, but no period of restoration to speak of, will the insured recover any policy proceeds under business income coverage?
ANSWER: In order for business income coverage to be triggered, the insured must suffer an actual loss of business income due to the necessary suspension of operations during the period of restoration. If the dentist is not continuing the business at that location, and it is not going to be repaired or replaced, you are correct that there is no period of restoration, and there is also no loss of income due to suspension of operations, so there would be no business income coverage.
Read More |
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| What's New This Week in FC&S |
Limited Coverage for Designated Unmanned Aircraft
In December 2014 ISO filed a number of forms that apply specifically to drones, also known and unmanned aircraft. These forms become effective June 1, 2015. Read More |
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| Litigation Watch |
Immediate and Complete Defense
Additional insureds sought summary judgment against the insurer on the issues of whether the insurer failed to provide an immediate and complete defense for the insureds. This case is Travelers Property Casualty Company of America v. Kaufman & Broad Monterey Bay, Inc., No. 5:13-cv-047545-EJD, 2015 WL 581528 (N.D. Cal. Feb. 11, 2015).
The insurer issued nine commercial general liability policies to Norcraft Companies and the insurer agreed to defend Norcraft or an additional insured against lawsuits for bodily injury or property damage. Kaufman & Broad Monterey hired Norcraft as a subcontractor to perform cabinet work for a residential project. Kaufman & Broad Monterey were named as additional insureds on the Norcraft policy.
After the project was completed, homeowners in the development filed a lawsuit against Kaufman & Broad Monterey, alleging strict product liability and tort causes of action. Kaufman & Broad Monterey demanded a defense from Travelers as additional insureds under the Norcraft policies. The insurer assigned the defense to a law firm that the additional insureds opposed so the insurer commenced this action alleging that the additional insureds' refusal of appointed counsel was a material breach of the insurance contract. Kaufman & Broad Monterey filed a counterclaim, alleging that Travelers did not intend to provide an immediate and complete defense.
The United States District Court for the Northern District of California noted that the parties all agreed that the insurer had a duty to defend the additional insureds. The issue then for the court was whether Travelers breached that duty for failing to provide an immediate and complete defense. 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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| Contact Us |
As always, your comments and questions are welcome.
Contact us at:
FC&S Department
Phone: 800-543-0874
Fax: 859-692-2293
Email: eAlerts@nuco.com |
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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 |
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| For more information about these titles Click Here |
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| FC&S Team |
Kelly Maheu, J.D.
Publisher
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Diane W. Richardson, CPCU
Consulting Editor
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Christine G. Barlow, CPCU
Managing Editor, FC&S
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Diana B. Reitz, CPCU, AAI
Consulting Editor
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David D. Thamann, J.D., CPCU, ARM
Managing Editor, FC&S Bulletins
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Emily Brunner
Online Print/Production Editor
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Susan L. Massmann, CPCU
Managing Editor, Electronic Publications
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Tosha Brinkman
Marketing Manager
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Donald S. Malecki, CPCU
Contributing Editor
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Donna Cozatchy
Creative Director
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Barry Zalma, Esq., CFE
Contributing Editor
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This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice is required, the services of a competent professional person should be sought.
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