In Deepwater Now: Texas Supreme Court Weighs in on Additional Insured Issues

Posted By Stephen D. Rosenberg In Additional Insured Clauses , Coverage Litigation , Excess Policies , Rules of Policy Interpretation
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I absolutely love this story on the Fifth Circuit asking the Texas Supreme Court to consider the scope of insurance coverage for claims arising out of the Deepwater Horizon oil spill loss; the case itself is fascinating as well. The reason is that insurance coverage law is an odd little area, in that massive numbers of decisions in that area are issued each year, and yet most do little more than move the chains a little bit in terms of refining or redefining the law in this area. This point is well-illustrated, for those of you who like support for a proposition, by Randy Maniloff’s on-going series of excellent coverage newsletters, aptly titled Coverage Opinions, which details the continuing flow of judicial decisions in this area.

At the same time, though, the history of insurance coverage law is written in big letters, by the big dollar cases that bring out the best lawyers and arguments that the industry and the policyholder bar have to offer; it is these cases that drive the development of the case law in new directions, and often rewrite the framework in which insurance coverage disputes are analyzed and decided for the next few decades. It was the big money exposures of asbestos and Superfund – issues now so old that they could have been referenced in a retro-movie like Argo, in the same way it featured rotary phones to add period authenticity - that gave rise to much of the case law that currently governs most disputes over trigger and allocation. Likewise, the issues at the heart of the Deepwater Horizon coverage dispute are additional insured and coverage for contractual indemnity obligations that have been floating around insurance coverage law for the entire length of my career, with often inconsistent results; a major decision in a high profile case like Deepwater Horizon is almost certain to reframe those discussions for many years going forward.

Randy Maniloff's Top Ten Insurance Coverage Decisions for Dummies and the Rest of Us

Posted By Stephen D. Rosenberg In Additional Insured Clauses , Coverage Litigation , Duty to Defend , Industry News , Long Term Disability Benefits , Pollution Exclusions , Punitive Damages
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Some bloggers blog their way to greatness, other bloggers have greatness thrust upon them. For some reason, that line popped into my head when Randy Maniloff’s always entertaining article on the top ten insurance coverage decisions of the past year appeared, like manna from heaven, in my in-box yesterday, providing one weary blogger - i.e., me - with a gift wrapped post for this morning. Substantively, there is much to be gleaned from the article and the cases it reviews, on issues ranging from the current state of trigger of coverage problems to an excellent decision on handling duty to defend disputes concerning obviously intentional conduct that has been pled as negligence for purposes of triggering insurance coverage, all written with the author’s trademark good humor and style (something anyone who reads a lot of insurance coverage briefs, opinions, articles and - yes - blogs can attest is not always present in written work in this area of the law). Moreover, the author has tossed in a free extra, a truly comical special section titled “Coverage for Dummies: The Top Ten," which collects ten excellent examples of people doing really dumb things and then demanding that their insurers protect them against the outcome.

And best of all, in what can only have been a transparent attempt by the author to garner a review on this blog, one of his top ten decisions (non-dummy division) is an ERISA case, the Supreme Court’s decision in MetLife v. Glenn. More seriously, its inclusion is almost mandatory in any collection of the most important decisions affecting the insurance industry (which, obviously, underwrites and administers the vast majority of employer provided disability plans), as it is guaranteed to generate more subsequent court rulings than any other insurance related decision of the past year, as the courts of each circuit move, over time, to realign their jurisprudence to accord with Glenn.

Who Let the Additional Insured Out? Who? Who?

Posted By Stephen D. Rosenberg In Additional Insured Clauses
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It seems like these days I have been reading a lot of interesting things on the subjects covered by this blog, many of which I either haven’t been able to pass along because of time constraints, or haven’t passed along because there isn’t enough to say about them to warrant a full blown post. I am going to take a shot at passing these types of interesting little pieces along though, when I can, and I will start today with one, which is likely to be of interest to those of you who read the insurance coverage posts on this blog. Over the years, the question of who, beyond the actual named insured to whom a policy is issued, qualifies as an insured for purposes of a particular policy has consistently appeared on my desk, in a range of guises, under a variety of policies, and with regard to an extensive array of issues that are troubling clients. Here is a nice technical piece on just what are the different types of policy language that are added to policies for the purposes of adding other parties, besides the named insured, to insurance policies as insureds.

And yes, the title of this post is intended to be sung (quite softly in an office environment) to the tune of this extremely annoying ditty.

Additional Insureds

Posted By Stephen D. Rosenberg In Additional Insured Clauses
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Some of you may have noted, given what I had to say here and again here, my view that the law of insurance coverage is not as well developed or at least not as consistent in the case law as it should be. At the end of the day, it is just policy language and facts, and it shouldn't be so difficult for the case law to reflect a consistent approach to insurance policy issues. Admittedly, such a project is complicated by the reality that the facts and the policy language differ from case to case, and the truth is that the slightest change in either variable can affect the outcome. I once spent years litigating a case that at the end of the day, turned on the distinction between the word damage and the word damages; I came to think of it as the Sesame Street case, with the case eventually focusing on the "letter of the day," and that one letter "s" becoming outcome determinative.

Additional insured clauses are a perfect example of this problem. Generally speaking, additional insured clauses simply serve the purpose of adding a third party, who would otherwise be a stranger to the relationship between the insured and its insurer, to a policy as an insured. Anyone who practices in, or anywhere near, the fields of insurance coverage, construction, architecture, professional liability or real estate, as well as a host of others, is familiar with these clauses, and has probably noted as well the variability in the policy language often used in such clauses. In truth, what should be the simple act of adding a party to a policy as an additional insured in this manner is often rife with unexpected difficulties if and when a claim against that additional party arises, due to even slight variations in the language used in those clauses and disputed questions of fact concerning the events that gave rise to the claim against the additional insured.

What brings this to mind today are several recent discussions of issues involving additional insured clauses, and which make clear that how they should apply to any given set of facts simply is not, and probably never will be, completely settled. InHouse Blog has the story of a new development in California law on this topic, Marc Mayerson has a similar story about a New York state decision addressing the additional insured problem, and the policyholder lawyers at Anderson Kill have this to say about the choice of law complications caused by such clauses.