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Care, Custody or Control Exclusion Requires Complete and Exclusive Control by Insured Claiming Coverage

Posted by Christopher Kendrick- Haight on Jul 29th 2019

Care, Custody or Control Exclusion Requires Complete and Exclusive Control by Insured Claiming Coverage
In McMillin Homes Construction v. Natl. Fire & Marine Ins. Co. (No. D074219, filed 6/5/19) a California appeals court held that a “care, custody or control” exclusion did not bar coverage for defense of a general contractor as an additional insured under a subcontractor’s policy, because the exclusion requires exclusive control, but the facts and allegations posed a possibility of shared control with the subcontractor.McMillin was the general contractor on a housing project and was added as
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Insurer Not Required to Pay Twice When Contractor Cashes Jointly Payable Check Under Authority Granted in Construction Contract

Posted by Christopher Kendrick, Valerie A. Moore on Jul 29th 2019

Insurer Not Required to Pay Twice When Contractor Cashes Jointly Payable Check Under Authority Granted in Construction Contract
In Jozefowicz v. Allstate Ins. Co. (No. G055643, filed 5/28/19), a California appeals court held that Allstate was not required to pay the insured where his contractor negotiated a jointly payable check under a lost or stolen check provision of the Commercial Code, because the insured’s construction contract had authorized the contractor to cash the check, which negated a requirement for application of the statute.In Jozefowicz, the insured entered a construction contract that contained a term a
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Court Upholds Insurance Commissioner’s Penalties for Broker’s Fees, Which Constituted Premiums in Excess of Approved Rates

Posted by Valerie A. Moore- Haight on Jul 29th 2019

Court Upholds Insurance Commissioner’s Penalties for Broker’s Fees, Which Constituted Premiums in Excess of Approved Rates
In Mercury Insurance Co. v. Lara (No. G054496, filed 5/7/19), a California appeals court ruled that the California Insurance Commissioner had the authority to impose penalties of $27,593,550 against Mercury Insurance Company for fees charged by brokers issuing its policies, because the brokers were de facto agents of the insurer, and the fees constituted premium in excess of the insurer’s approved rate.Under insurance regulations, an insurance broker can charge a fee for services, but an agent c
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Insurance Policy’s Promise to Advance Claims Expense for Covered Claims Does Not Create a Duty to Defend

Posted by Christopher Kendrick- Haight on Jul 29th 2019

Insurance Policy’s Promise to Advance Claims Expense for Covered Claims Does Not Create a Duty to Defend
In United Farm Workers of America v. Hudson Insurance Company, (E.D. Cal.) 2019 WL 1517568, the United Farm Workers of America union (UFW) sued Hudson Insurance Company for breach of contract and bad faith arising out of a former employee’s wrongful termination and wage and hour lawsuit.Hudson provided UFW with Labor Professional Liability Insurance that included employment practices liability coverage. Hudson reserved its rights and agreed to pay an allocated share of the defense costs, citing
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Georgia Supreme Court Hands Major Victory to Insurance Companies in Bad Faith Failure to Settle Cases

Posted by Rob Cruser on Jul 29th 2019

Georgia Supreme Court Hands Major Victory to Insurance Companies in Bad Faith Failure to Settle Cases
In a game-changing decision, the Georgia Supreme Court eliminated bad-faith failure to settle cases absent a "valid offer" from the injured party. In First Acceptance, the Georgia Supreme Court ruled as follows:"We also asked the parties to address whether an insurer's duty to settle arises only when the injured party presents a valid offer to settle within the insured's policy limits or whether, even absent such an offer, a duty arises when the insurer knows or reasonably should know that settl
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