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2021 Issues - The E&O Report

We close out the year with an update on two recent New York insurance related court decisions that might have significant impact. One that affects you directly: a special relationship/proximate cause insurance agent E&O decision. The other indirectly, but important to your insureds, and thus to you: the interplay of the other insurance clause and priority of coverage provisions in contracts. [more]
Because of the growing number of construction claims, more and more owners, developers and general contractors are requiring the purchase of additional insured coverage in connection with their projects. However, as with all insurance, no two endorsements are created equal. Although two additional insured endorsements may have similar names, they may provide very different coverage. As a result, in this issue of The E&O Report we will review the difference between some of those endorsements. [more]
According to people on the internet with way too much time on their hands, some of the most frequently used categories in the history of the Jeopardy game show are 'Before and After” 'Science,' and 'Potpourri.' The latter being my favorite, as you never knew what great piece of information will be the subject. With that in mind, this edition of The E&O Report is a Potpourri regarding a few important points that we have seen in some E&O matters that we have recently handled. Each of these issues can help reduce E&O exposure for an agency or brokerage or, at the least, provide a strong foundation for its defense if, or when, it faces an E&O claim or lawsuit. [more]
During the lockdown, I watched a lot of funny, lighthearted compilation videos on YouTube looking for a moment of levity. I found myself particularly enjoying those clips of young children caught red-handed by their parents after doing something naughty, like covering their younger sibling in shaving cream or make up. Several similar clips stand out in my memory where the child is covered in paint with it also all over the floors and walls. What I always found most intriguing is that in every instance, when confronted by their parent with what they had done, the child always denies that he or she did anything wrong, or amazingly, that anything happened at all. “What paint, Mommy?' [more]
My oldest daughter will be headed to off college as a freshman in late August. As we have been going through the checklist of the numerous things to consider before she leaves for school, one issue that we recently discussed was the insurance that would cover both her health and her belongings, while she is away. When children leave home for college every parent wants to do everything that they can to make sure that they are as safe and protected as possible. Unfortunately, insurance coverage to protect the college student living away from home may not always be addressed by parents. In this issue of the E&O Report, we will review some of the coverage considerations that insurance agents and brokers should discuss with customers who have a child away at college. [more]
When I was nine years old, my parents took me to Radio City Music Hall to see the musical film, Dr. Dolittle. The Dr. takes his “Push-Me, Pull-You,” (a llama with a head on each end) to the circus to generate income to fund his sea voyage. The world-weary, jaded circus owner, sight unseen, tells the Dr. that he is not interested because he has seen it all before. As Dr. Dolittle leaves the circus owner sees the llama. Shocked beyond belief, he breaks into a song entitled, “I’ve never seen anything like it.” Life is like that, lest we forget and get jaded ourselves. [more]
On April 29, 2021, the Appellate Division Third Department issued a unanimous decision in which it held that Regulation 187 as amended is unconstitutional, dealing a “monumental” victory to Big I NY. The New York State Department of Financial Services, (“DFS”) subsequently filed for and was granted leave to further appeal to the New York Court of Appeals. The amended regulation remains in force until and unless the Court of Appeals ultimately overturns it. [more]
In 1959 the film “Anatomy of a Murder” was released. Based on real life events, it concerned, like the workings of the human body, the inner workings of a criminal trial - hence the title. The word “Anatomy” is an excellent way of thinking about civil law, the kind applicable to E&O cases against agents and brokers. In this edition of “The E&O Report”, we will review what a cause of action is in an E&O matter in connection with a recent New York appellate court decision. [more]
In this E&O Report, we would like to address several scenarios that we have seen concerning the return of premium and its relationship to the commission earned by an insurance agent or broker. As this is a very generalized writing this month, we encourage any readers with specific questions relating to the issues that we cover in this E&O Report to contact us. [more]
On February 10, 2021 the Appellate Division First Department , affirmed the dismissal of a failure to procure action against a broker in the case of Trimasa Restaurant Partners.. This case is a significant decision in that it narrows, limits and thus clarifies the application of the special relationship doctrine, which has been used by plaintiff’s attorneys in E&O lawsuits since 1997 to attempt to hold insurance agents and brokers liable for things that they never agreed to do for their customers, like procuring coverage not specifically requested. In this issue of The E&O Report we will review the special relationship doctrine and the court’s decision in the Trimasa case. [more]
Although there are now vaccines for the COVID-19 virus, and an end to the virus itself is potentially in sight, entrails of the virus will still be seen in the courts as businesses litigate with their insurers and brokers in an effort to recover for economic losses resulting from shutdowns ordered as a result of the pandemic. In this issue of The E&O Report, we will review some recent New York court cases addressing these issues that insurance agents and brokers should be aware of. [more]
2020 was one heck of a year. Not only did we have to have to deal with Covid-19, but the Atlantic hurricane season broke records with both the number of storms and the severity of many of them. If things keep going the way they are going, the predictions from many of the weather experts are that this may be a very active Winter season for storms and severe weather in the northeast. This means an increase of these types of claims. While insurance agents and brokers should always be certain that that they are following good practices with regard to their claims handling procedures for such claims, even before a claim strikes, you should be prepared for questions on coverage from concerned customers. These types of inquiries are made even more likely because of news stories suggesting that (in light of the potential for extreme Winter weather) homeowners, tenants and businesses should review their insurance policies and address any questions or concerns that they may have with their insurance agents and brokers before a claim occurs. [more]