Traditional meaning of 'collapse' is undermined; insurers should heed the trend among courts to adopt a broad definition in coverage disputes

Article Abstract:

Authorities are split on the meaning of the word 'collapse' in insurance coverage disputes, but courts have gradually expanded the word's meaning from situations involving falling down to situations of mere structural impairment. According to this view, if the structural impairment occurs due to unusual circumstances which could not have been foreseen when the policy was issued, a material structural impairment constitutes a collapse within the meaning of the policy. Most recently, federal courts in John Akridge Co. v. Travelers Cos. and Allstate Insurance Co. v. Forest Lynn Homeowner's Ass'n have found for this broader definition.

Interpretation and construction, Insurance policies

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Insurers' real net worth is key to damage awards

Article Abstract:

Those seeking punitive damages against insurers must demonstrate the true net worth of those insurers, and can often use for this purpose the net worth of the insurance group to which the particular insurer belongs. The CA Supreme Court offered a three-part test for calculating punitive damages, taking account of the nature of the defendant's acts, the compensatory damages, and the wealth (net worth) of the defendant. Insurers' common practice of dividing into a group with pooled assets may not avoid this test.

Laws, regulations and rules, Exemplary damages, Punitive damages, Valuation, Damages, Damages (Law)

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'Late' notice is held not to bar excess coverage; a N.Y. court recently ruled that an excess insurer must prove it was prejudiced by the lateness

Article Abstract:

The New York Appellate Division held in American Home Assurance Co v. International Insurance Co. that late notice did not preclude excess coverage when the excess insurer had no evidence of prejudice due to the lateness. Counsel for policyholders in such actions should have evidence of insurance industry practice on notice and how the primary insurance company handles claims. Such evidence may show that the excess insurance company's notice from the policyholder was not late.

Notice (Law), Surplus lines (Insurance), New York (State)

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