Latest Liability and Coverage Rulings in the U.S. – Will favorable news continue?
The latest wave of U.S. state court decisions brought more good news than insurers are accustomed to. There are many exceptions, but a significant number of outcomes on important issues went the way we hoped and expected. Take these few:
- Ohio on Construction Defects – At last the Ohio Supreme Court answered the occurrence question in a construction defect coverage case. The court held that defective construction that damages only the work itself is not an accident and denied coverage under a contractor’s GL policy. Some disputes may arise as the new law is applied to different claim scenarios, but for now we welcome this first step taken by the court.
- New Jersey and Texas on Workers’ Comp. Exclusivity – The high courts of both these states rejected attempts by claimants to sue workers’ compensation insurers for bad faith under statutory and common law. Although the details vary, the common ground was that the workers’ compensation statute creates adequate - and exclusive - rights and remedies.
- California on Dram Shop – The California Supreme Court refused to find liability outside the clear parameters of the liquor liability laws. A store owner was not responsible when, after a valid sale with an ID check, the liquor was given to an intoxicated minor who later caused an accident.
Will the favorable trend illustrated in our latest Casualty Matters publication continue? Surely not. Change is always with us, and many changes will expand the exposures we are underwriting today.
We already know of many liability and coverage questions awaiting high court decisions, and highlight in the publication a few that we are monitoring. These cases will produce the next round of changes to our exposures. There are more every day. I just read about occurrence issues presented to the Georgia Supreme Court in a contractor coverage dispute - yet another case to add to our watch list.
That’s why it is so critical for underwriters to stay on top of the courts and legislatures changes. Read our Casualty Matters publication for more on recent rulings affecting commercial and personal lines carriers or just give us a call to discuss about our broader research findings. And, of course, stay alert to the new laws and rulings coming our way.