Quinn's Commentaries on Insurance Law: July 2015

Friday, July 31, 2015

Cyber Insurance: A Select Bibliography

Quinn’s Recently Published Writings on Problems in Cyber Insurance

They are all from the Journal of Texas Insurance Law. There are another series of essays to be found in the blog Quinn’s Commentaries on Insurance Law, but in an old and orthodox sense, they have not really been published.

First-Party Cyber Coverage in the Period of Pandemic International “Hackery”—Part Three, 13.3 J. TEXAS INS. LAW 3-15 (Spring 2015).

Insurance Universals & the Arrival of the Cyber-Policy—Part Two: Some Specifics on Liability Insurance, 13.2 J. TEXAS INS. LAW 19-26 (Winter 2015).

Insurance Universals & the Arrival of the Cyber-Policy—Part One: Partly Prolegomena, 13.1 J. TEXAS INS. LAW 5-18 (Fall 2014).

The Cyber-World and Insurance: An Introduction to a New Insurance, 12.3 J. TEXAS INS. LAW 20-28 (Fall 2013).

These essays are “out to” make general points, but much of the analysis is restricted to one relatively standard policy.

Michael Sean Quinn, Ph.D., J.D., C.P.C.U. . . .

The Law Firm of Michael Sean Quinn et

Quinn and Quinn

1300 West Lynn Street, Suite 208

Austin, Texas 78703

(512) 296-2594

(512) 344-9466 - Fax

E-mail: mquinn@msquinnlaw.com

Wednesday, July 29, 2015

Liability Insurance: Insured v. Insured Exclusion

Commercial Liability Insurance Coverage Exclusion for Insureds Under Same Policy to Be Read Narrowly

Michael Sean Quinn*

www.michaelseaquinn.com

Often commercial liability insurance policies exclude coverage, including the duty to defend, when one insured, e.g., the policyholder (owner) and a named insured. Thus, the exclusionary language might read this way: “This insurance does not apply to claims or ‘suits’ for ‘bodily injury,’ ‘property damage’ or ‘personal and advertising injury’ brought by one insured against any other insured.

In one recent case, A has retained B to work on demolishing a factory-type building it no longer used. B rented equipment from C. During the period when B was working, a fire broke out in the building and did damage to, among other things, the equipment B had rented from C. C sued B for damages to its equipment. (Or its property insurer seeking subrogation recovery did.) B thereafter “side-sued” A on the basis of an indemnity theory. (Call this a “cross claim” if you like. “If I have to pay at all, you should have to indemnify me, i.e., pay me for whatever I paid.)

The liability insurer of both A and B denied coverage on the basis of this part of the exclusion” “This insurance does not apply to. . .’suits’. . . for ‘property damage’. . . brought by one insured against any other insured.”

Of course, there was a coverage suit. The district court held that the whole thing was a suit involving property damages and in that law suit one insured, B, has sued another one, A, so the insurer’s denial of coverage was sound.

The appellate court held that B did not bring a suit against A for property damage. It had sustained no property damage. I brought a suit for indemnity, and that did not fall within the exclusion. Hence, the exclusion did not apply, and there was coverage.

Kinsale Insurance Company v. Georgia-Pacific, L.L.C., No. 14-60770 (5^th Cir., July 27, 1205). The court applied La. law even though the accident appears to have taken place in Mississippi. La. indemnity law is slightly different that the law in some other states, but not as it related to this case.

For an interesting and unusual predecessor case the court rejects as precedent, see Fid. & Deposit Co. of Md v. Conner, 973 F.2d 1236 (5^th Cir. 1992).

Endnote #1: The court does not actually say that the exclusion has to be read narrowly, but it implies that the reasoning of the district courts was not based on a sufficiently narrow reading.

Endnote #2: I had never actually heard of the Kinsale Insurance Company before yesterday. Its website is mildly interesting, since it doesn't just do run-of-the-mill/everyday business.