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Two Minutes With Tim - Child Victims Act - When The Insurer Is No More

​For one year, people in New York can sue over sexual abuse they suffered as children. But what if the insurance company that provided the coverage back then no longer exists?​

 

​Slideshow: ​Child Victims Act Claims - What if the Insurer No Longer Exists?​​

Child Victims Act Claims - What if the Insurer No Longer Exists?

New York's Child Victims Act - Created with Haiku Deck, presentation software that inspires;

Do You Have Friday the 13th Insurance?

As you may have noticed, today is Friday, July 13. Friday the 13th is traditionally seen by some better safe than sorry superstitious individuals as a day when one must take care to avoid catastrophe terminal embarrassment certain doom being unlucky. We here at Big I New York are, of course, above such silliness. As a rule, our staff members are stupid reckless confident enough to go on about their lives as if it were any other day.

However, when if the predictable unexpected happens, insurance is there to say I-told-you-so pay for the financial fallout. Here, in no particular order, from the home office in Harpursville, New York, are the top five Friday the 13th hazards and how prudent superstitious individuals and businesses avoid big trouble an eternal curse OMG-what-were-you-thinking accidental loss:

Ladders. Look, if you insure contractors, you know all about New York's scaffold law. Many scaffold law claims involve someone standing on a ladder and suddenly finding himself subject to the earth's gravitational pull in a most unwelcome way. The ladder shifts, it moves, it spins, it does the hokey-pokey, whatever, and a worker falls and gets hurt. But what about if someone walks under the ladder? The ancient Egyptions caught onto this one 5,000 years ago. Fortunately, while many Commercial General Liability insurance policies exclude coverage for an employee falling off a ladder, relatively few exclude coverage when someone tempts fate by walking under one. So far.

NY High Court Limits Coverage For Additional Insureds

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Earlier this month, the New York State Court of Appeals, the state's highest court, issued a ruling that will affect the business of every insurance agency in the state that insures construction risks. By a vote of 4 to 2 (the court was short one judge due to the recent death of Judge Sheila Abdus-Salaam), the court held that additional insureds under Commercial General Liability Insurance polices have coverage only for occurrences "proximately caused by" the named insured. Previously, all that was required was for the occurrence to have some connection with the named insured's work. Under this ruling, there is no coverage for the additional insured unless the named insured's own negligence is the proximate cause of the accident.

It is unclear how this might affect the liability insurance market for contractors in New York. One outcome I can foresee is that owners and general contractors may start to reject the modern versions of the Insurance Services Office's (ISO) additional insured endorsements. That is by no means a certainty, but it's possible.

When Does a General Liability Policy Not Provide Any Liability Coverage?

An IIABNY member emailed me last week about a quote she had received from a wholesale broker for a Businessowners Policy (BOP). The quote was from a surplus lines carrier that is a member of a large, nationally known insurance group. I will leave the names of the carrier, wholesaler and retail agency anonymous.

The BOP is intended for a transportation company. By definition, the predominant risk for a company like that is in the automobile line of coverage; the property and liability coverages, while still important, tend to be an afterthought. The member had concerns about a prototype endorsement that was included in the quote, and she wanted my thoughts on it.

Order in the Court (Part 3): Scaffold Law Homeowner Exclusion

New York's (in)famous scaffold law exempts owners of one- and two-family dwellings. Homeowners don't have to worry about absolute liability, right?

Well, it depends. A New York appellate court refused to apply it to one homeowner last week.

A worker died during the construction of a one-family home in New York City. The homeowner also happened to be an officer of the general contractor who was building the home. He was an experienced construction worker. The deceased worker was an employee of an electrical contractor acting as a subcontractor on the project. The homeowner provided the workers with a 14-foot ladder that he built himself out of "two-inch by four-inch pieces of wood connected by nails and screws." As the subcontractor's employee was coming down the ladder with a heavy drill in hand, the ladder jerked and he fell.

Carry Cyber Insurance or Be Sorry

If you are in business today, cyber insurance is no longer optional. It’s not optional for insurance clients, and it’s not optional for insurance agencies. As if the point needed further emphasis, a New York appellate court drove it home yesterday.

The operator of several Five Guys restaurants in the Albany area got hacked. Criminals accessed customers’ credit card information and went shopping. The credit card holders naturally protested the unauthorized charges to their card issuers. The issuers got stuck absorbing the costs of these fraudulent charges. At least one of the issuers, Trustco Bank, sued the restaurant operator for failing to take reasonable care of the data. According to a report in the Albany Times-Union, the bank sought more than $104,000 in damages.

Order in the Court (Part 2): Additional Insureds

Automatic additional insured endorsements to a commercial general liability insurance policy typically cover a third party as an additional insured when the named insured and the third party "have agreed in writing in a contract or agreement" that the policy will do so. Many construction projects are based on written contracts, so there should be no problem with the coverage, right? Well, maybe. A Manhattan trial court issued a decision last month on the question of whether a written contract actually included an agreement that a subcontractor would cover a building owner. 

It's the same old contractual risk transfer love story. Building owner hires general contractor to do some work. GC hires subcontractor to restore the building's exterior facade. Subcontractor's employee slips and falls due to ice and snow on the building's roof and gets hurt. Employee sues building owner. Building owner looks to GC's insurer for liability coverage. GC's insurer looks to subcontractor's insurer to cover the building owner. Sub's insurer sees things differently. GC's insurer sues, seeking a court order for the sub's insurer to:

• Cover the owner as an additional insured under the CGL policy
• Hold the owner harmless under the exception to the contractual liability exclusion in the CGL policy
• Reimburse the CG's insurer for its defense costs.

Change of Direction on New York's Scaffold Law?

David Adams reports in the latest issue of Labor Law Pointers on a Jan. 27 scaffold law court decision that may prove to be very significant. The decision is from the New York State Supreme Court Appellate Division, Second Department, which encompasses Brooklyn, Queens, Staten Island, Long Island, and areas north to Orange County.

The injured worker was using a six-foot-tall A-frame ladder on a construction project. The ladder was apparently in good condition, as he had performed the same tasks with the same ladder in four rooms before the accident. Pieces of sheetrock were stacked on the floor in the fifth room, preventing him from placing the ladder under the location where he needed to work. Instead, he placed the ladder three or four feet to the left of the location. It was on level ground and did not move or shake as he climbed to the third rung. He leaned to the right to do his work, whereupon the ladder tipped over. The court’s opinion does not describe his injuries.

Order in the Court (Part 1): Criminal Charges and Classifications

Photo by Douglas Palmer. Used under a Creative Commons Attribution 2.0 license​.

Lots of interesting things happening in New York’s courts lately. To keep this post short, I'll just cover two of them for now. Here’s a quick rundown:

The Associated Press reported Monday about a Nassau County man who has been charged with vehicular homicide, despite the fact that he was not driving at the time of the October 2012 fatal accident. The man allegedly was intoxicated when the car he was driving struck a car on the Long Island Expressway. He stopped the car down the road in the high occupancy lane, where it was struck by another car. This turned his car sideways. An SUV driver failed to spot the sideways car and hit it, then struck and killed a police officer who had arrived to investigate. The guy who started it all was allegedly leaning against a guardrail at the time the officer was killed.