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June 4, 2015 |
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Q&A of the Week |
Denial Due to Lack of Maintenance
A Florida subscriber recently asked the following question:
An insured has an old heating system in need of repair. Each year he travels to Florida for a month. He leaves the heat on but does not drain the water lines. While absent the furnace goes off and the pipes burst, and when he comes back there is extensive water damage to the floors and other property.
We realize the pipes themselves are not covered, but what about the other damages that resulted because of his neglect in maintaining the heating system? Is the insurer justified in denying the entire claim because of neglect?
ANSWER: It really depends on how bad the heating system was and when the insured was informed that it needed repair. If a heating professional told him it needed repair immediately or very soon, then all damages would be excluded. If the heating professional had said it needed repair but should last another season or two before repairs became absolutely necessary, then the insured could be given the benefit of the doubt and damages could be covered.
Read More |
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What's New This Week in FC&S |
Fracking and Earthquakes Fracking, or hydraulic fracturing, is a way of releasing natural gas so that it can be used to produce energy. In recent years it has become more popular as a way to harvest natural gas. The process creates two byproducts, natural gas and wastewater. Read More |
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Litigation Watch |
Equitable Subrogation Discussion
One insurer sued another insurer seeking a declaratory judgment that that other insurer was obligated to defend and indemnify the insured and that its failure to do so resulted in a breach of contract. This case is Nova Cas. Co. v. OneBeacon America Ins. Co., No. 13-15799, 2015 WL 1189196 (11th Cir. March 17, 2015).
The facts of the case are not disputed by the parties. Silverhunt Associates leased Florida property to New York Community Bancorp (NYCB). The lease required NYCB to maintain liability insurance of at least $1 million per occurrence on the premises and to list Silverhunt as an additional insured. OneBeacon issued such a policy to NYCB. Nova insured Silverhunt under a separate general liability policy, providing $1 million per occurrence primary limits and $4 million excess limits.
During an armed robbery, McQuade was shot and paralyzed. McQuade sued both NYCB and Silverhunt. Nova stepped in to defend Silverhunt and asked OneBeacon to defend and indemnify Silverhunt pursuant to the additional insured clause of the NYCB policy. OneBeacon declined coverage based on its belief that under the circumstances of the claim, it was not required to defend Silverhunt. 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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