at the crossing 90 days prior to the accident and that the policy’s “completed work
exclusion” applied. The court disagreed and dismissed the case in June 2016.
On appeal to the U.S. 11th Circuit Court of Appeals, Liberty lost its
argument again. The court said the policy provided coverage for bodily injury
that occurred “out of acts or omissions at the ‘job location.’” Because the
work included maintenance and monitoring of the crossing, the work was not
concluded, it ruled.
“To conclude otherwise would require the Court to read language into the
Policy that does not exist,” according to the opinion issued April 4.
SCORECARD: The insurance company must defend and indemnify
TAKEAWAY: The court ruled the insurer was “requesting relief from the
consequences of the inartfully drafted, yet plain, terms of its insurance policy.”
COURT: INSURED MISSED NOTIFICATION DEADLINE
On july 10, 2014, vht inc. sent a letter to Zillow, an online real estate marketplace, demanding that it remove VHT images from its site. The photos were only to be used for sales or marketing, according to VHT,
but Zillow was also using them in connection with Zillow Digs, a home
improvement and design application.
Zillow requested further information from VHT, but never removed the
images. On July 8, 2015, VHT filed suit, claiming copyright infringement and
Two days after receiving notice
of the lawsuit, Zillow notified
National Union Fire Insurance Co.
of Pittsburgh, which had issued
it a claims-made Specialty Risk
Protector policy, to cover claims
related to online media content.
National Union initially
agreed to provide a defense under
a reservation of rights, but later
denied coverage because the claim
was outside of the policy period. It
should have been notified when the original letter was received instead of when
the lawsuit was filed, it said.
A jury eventually ruled that Zillow should pay $8.3 million to VHT.
On Sept. 15, 2016, National Union sought a court ruling that it had no duty
to defend or indemnify Zillow, and on April 13, 2017, the U.S. District Court for
the Western District of Washington agreed.
The court disagreed with Zillow’s argument that the lawsuit notification was a
“separate and distinct claim” from VHT’s original letter. It ruled the two claims
involved the “same relevant acts,” and that the policy required notification within
45 days after the end of the policy, which was July 19, 2014.
SCORECARD: The insurer does not have to defend or indemnify Zillow for the
$8.3 million jury award.
TAKEAWAY: The court found no meaningful difference between the original
letter and the litigation for coverage purposes.
INSURER MUST PAY $13.5 MILLION
On feb. 7, 2010, a gas blow operation was being performed at the Kleen Energy Systems power plant in Middletown, Conn. As part of the operation, a large amount of natural gas was vented into
areas where welding and other work was being performed. An explosion killed six
workers and injured 50 others.
The injured workers and the
estates of the deceased obtained
a $13.5 million judgment against
subcontractor Bluewater Energy
Systems Inc., and the workers
subsequently filed suit, seeking
indemnity from National Union
Fire Insurance Co., which had
issued Bluewater a commercial
umbrella insurance policy.
National Union denied
coverage, saying the power plant
project was insured under a contractor controlled insurance “wrap-up” program,
and that the umbrella policy excluded coverage for “any liability arising out of
any project insured under a ‘wrap-up’ or any similar rating plan,” according to
The workers said the term “wrap-up” was “ambiguous,” and the U.S. District
Court for the District of Connecticut agreed.
In an opinion dated April 6, the court ruled the insurance company “had a
duty to explain its definition [of wrap-up] to the insured so that the insured could
understand the significant coverage limitation.”
“Although insurance experts and attorneys may debate the contours of a
‘wrap-up or similar rating plan,’ the Court cannot find a reasonable layperson …
would have understood and expected – based on the language of the contract –
that liability was excluded … ,” the court ruled.
SCORECARD: The insurance company must pay $13.5 million on the claim.
TAKEAWAY: Because of the ambiguity related to the wrap-up program, the
law requires a ruling most favorable to the insured.
COMPLETION OF WORK AT CENTER OF DISPUTE
On june 1, 2011, tarhonda palmer was struck by a train at a railroad crossing in Adel, Ga., causing extensive injuries including severe burns and traumatic brain injury.
In a lawsuit she filed against Norfolk Southern Corp. on March 14, 2012, she
said her ability to see the approaching train was impaired by overgrown vegetation
and other factors. She later amended the lawsuit to include NaturChem Inc., which
was contracted to apply herbicide and monitor the crossing.
NaturChem alerted Liberty Surplus Insurance Corp. of the claim and sought
coverage. The insurance company agreed to pay 50 percent of the defense costs,
under a reservation of rights.
In September 2014, Liberty filed suit in the U.S. District Court for the
Middle District of Georgia and sought a ruling that would eliminate its coverage