Monthly Archives: February 2011

NJ Deemer statute metaphysically endorses Out-of-State Auto Policy

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It is well established in New Jersey that unloading of a truck involves the “use” of that vehicle for purposes of omnibus auto insurance coverage. When an injury occurs during unloading then, provided that the injury arose out of the unloading operations, the auto insurance policy provisions apply to the claim.

But what if the auto policy is issued out of state? Do the New Jersey omnibus insurance obligations prevail where that policy includes exclusions that would preclude such coverage? The answer boils down to whether the out-of-state policy was issued by an admitted carrier. If so, the New Jersey Deemer Statute requires the policy to be read in accordance with the State’s omnibus insurance provisions which in effect “metaphysically” endorse the out-of-state policy. To the extent that such a policy would deny coverage for an unloading injury, pertinent policy exclusions are held invalid. Significantly though, the remaining policy terms, such as policy limits, remain in effect as written.

In The Burlington Insurance Company v. Northland Insurance Company, the Hon. Dickinson Debevoise, U.S.S.D.J. of the New Jersey District Court ruled that a general liability insurer was entitled to reimbursement from a commercial auto insurer for such a claim. Northland, an admitted New Jersey auto insurer, had issued a Pennsylvania insured a Pennsylvania commercial auto policy. When Northland failed to evaluate coverage for an unloading accident that occurred in New Jersey under this State’s deemer statute, a declaratory judgment action followed.

The Court held that the Pennsylvania commercial auto policy indeed covered the unloading accident up to that policy’s full limits and that the liability insurer was entitled to reimbursement for defense and indemnification costs of its insured as well as costs incurred in the declaratory judgment.

http://pdf.wcmlaw.com/pdf/northland.pdf

For more information, contact Denise Fontana Ricci at

Second Circuit Certifies Acord Certificate Question to NY Court of Appeals.

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In the declaratory judgment case of 10 Ellicott Square v. Mountain Valley Indemnity, the Second Circuit was confronted with two issues: (a) if a contract is partially performed, must it be signed to be “executed”; and (b) is a certificate of insurance sufficient to afford coverage — http://pdf.wcmlaw.com/pdf/MV.pdf

In respect of the first question, the Second Circuit ruled in the negative. It held that under New York law, a contract must be either fully performed or signed to be deemed “executed.”

In respect of the second question, the Second Circuit noted the divergence of case law in New York. It has therefore certified the following question to New York’s Court of Appeals:

In a case brought against an insurer in which a plaintiff seeks a declaration that it is covered under an insurance policy issued by that insurer, does a certificate of insurance by an agent of the insurer that states that the policy is in force but also bears language that the certificate is not evidence of coverage, is for informational purposes only, or other similar disclaimers, estop the nsurer from denying coverage under the policy?

The ball is now squarely in New York’s highest court to resolve this Acord issue that consistently arises —particularly in construction accident cases. We will continue to monitor.

For more information about this post, please contact Bob Cosgrove at .

t appears that the certificate of insurance issue will remain, for the time being, unresolved.

The Second Circuit recently amended its decision, and in a footnote on page 5, has indicated that the matter has been settled and that the certification to the Court of Appeals has been withdrawn.

The decision on the “execution” issue, however, will stand.

If you have any questions or would like further information, please contact or

January 31, 2011 Amended Decision