“Arising Out Of” and “Caused By”: Different Meanings in AI Endorsements? Apparently Not.

In W&W Glass Systems v. Admiral Ins. Co., the plaintiff sought a judgment declaring that it was an additional insured under its subcontractor’s insurance policy after an employee of the subcontractor was injured during the course of his employment.  The policy provided that plaintiff was covered “only with respect to liability caused by [the subcontractor’s] ongoing operations performed for that insured [i.e. plaintiff].”  The defendant argued that the additional insured provision was not triggered because the injured employee’s accident was not “caused by” the subcontractor’s operations — that the language “caused by” means that there must be a finding of negligence.  The First Department rejected this argument, finding that the language “caused by” does not materially differ with the language “arising out of,” and that language does not require a showing of negligence. Since the injured employee was working for the subcontractor at the time of the accident, the defendant’s duty to defend was triggered.
Thanks to Gabe Darwick for his contribution to this post.

Reasonable Expectation of Insured Trumps Employee Exclusion in a Pennsylvania Court

In United States Steel Corp. v. Nat’l Fire Ins. of Hartford, several employees performing maintenance work on behalf of an independent contractor were injured during explosions at a plant owned by United States Steel Corp.  The employees filed suit against United States Steel Corp.  Defendant insurance companies issued policies to the independent contractors, naming United States Steel Corp. as an additional insured.  When the insurers disclaimed, United States Steel Corp. commenced a declaratory judgment action against them.  The defendants moved for judgment on the pleadings, arguing that an employer’s liability exclusion excluded coverage for the bodily injury claims raised by the employees.  The court disagreed, and concluded the insured had the reasonable expectation that each would be covered if sued for injuries to an employee of the other insured. The court reasoned it would be of little benefit to United States Steel Corp. to be an additional insured if it was also required to obtain its own insurance for suits by employees of any other named insured against the plaintiff.


Thanks to Colleen Hayes for her contribution to this post.

Pet Insurance on the Rise

Over the past fifteen years, the pet insurance industry has gone from virtually nonexistent to an estimated $880 million in premium revenues by 2014.  As costs for veterinary services (and, more importantly, demand for veterinary services) has skyrocketed in recent years, so has the demand of insureds attempting to reduce their own costs for such procedures.  Some companies offer monthly premiums for pet medical insurance, with a variable per-incident cap, depending on the amount of the premium.  Such insurance makes pet owners more comfortable, rather than face the potential of an exorbitant bill for pet surgery.  For example, the attached article references a cat undergoing kidney replacement surgery at a cost of $18,000.  A pet insurance endorsement may not cover the entire cost of such a procedure, but it could certainly reduce the final bill. 


Thanks to Brian Gibbons for his contribution to this post.



Fine Print Ramifications of Cruise Ship Contracts Continue: Victims of Costa Concordia Likely Will Not Find Relief in U.S. Courts

The recent Costa Concordia shipwreck in Italian waters has raised the often discussed question of whether United States citizens can seek relief in U.S. Courts based on injuries occurring on cruise ships outside U.S.waters.  The Costa Concordia passengers’ tickets included language providing that all claims against it would be brought in the Courts of Genoa, Italy.  U.S.Citizens have challenged similar contracts in the past, arguing that to litigate in a foreign country would be too burdensome.  In August 2010, the Eleventh Circuit Court of Appeals affirmed a dismissal of a lawsuit against Regent Seven Seas Cruises, whose printed passenger tickets called for all claims not involving a U.S. Port to be brought in Paris.  The court found the argument that foreign litigation would be too burdensome not to be persuasive over the plain language of the contract.  Legal experts believe that this court precedent will continue to apply to the recent tragedy aboard the Costa Concordia.


For the complete Eleventh Circuit Court opinion,


Thanks to Andrew Marra for his contribution to this post.


What is SOPA all about?

You may have noticed yesterday that your usual go-to research site, Wikipedia, was blocked.  Your dismay, while understandable, was intended by Wikipedia personnel.  The black-out was designed to bring awareness to the Stop Online Piracy Act currently circulating through the House of Representatives (the sister bill PIPA- Protect Intellectual Property Act is the Senate’s version).  Both bills exist to combat what Congress sees as a problem with international websites that provide U.S. consumers with access to pirated intellectual property, such as movies and music.

As a practical matter, the bills would give Justice Department prosecutors the ability to block the foreign sites from U.S. visitors.  For example, the attorney general could require search engines to disable links to the sites or prevent credit-card processors from processing payments to the site.  In addition, the bills would allow content owners like music studios and film production companies to sue websites that host pirated material.

The problem with the bills, claim a multitude of internet-based websites and free-speech advocates, is that they are drafted so broadly as to inhibit speech on the internet.  The bills require only a short good-faith letter that the website is allegedly hosting pirated content.  Once the letter is received, the website has only five days to either shut down the site or contest the letter in court.  Opponents claim that is impossible for websites with huge amounts of user-generated content, such as Facebook and twitter, to determine what material is pirated. 

What would SOPA mean for you?  If SOPA (or PIPA) were legalized in their current forms, every website host would need to be extremely vigilant about material, especially interactive media, posted on their site in order to ensure that none of the material is pirated.

There has been a huge outcry against the bills from non-traditional media outlets all over the county and President Obama has publicly stated he would not sign either SOPA or PIPA into law in their current forms. 

WCM is following the progress of the bills and will update the site periodically as new information comes available.

Remy Cahn


In NY Carrier Must Disclaim When It First Learns Of Late Notice Basis For Disclaimer, Cannot Wait For Further Investigation.

The question of when a carrier must disclaim coverage in New York for a bodily injury claim is a most litigated issue.  New York Insurance Law 3420(d) requires a liability insurer to give the insured written notice of a disclaimer “as soon as is reasonably possible.”  However, New York also has a “one disclaimer” rule, which requires a carrier to list all grounds for disclaiming coverage in the disclaimer or it will waive any other basis that may be available.  The Appellate Division, First Department recently reversed its prior rule and held that a carrier must disclaim when it first learns of a late notice basis for disclaiming coverage, even it the carrier is investigating other possible reasons that coverage may not be afforded.

In George Campbell Painting v. National Union Fire Ins. Co. (116389/08) it was not in dispute that notice of the loss was untimely, and that the carrier was aware of the late notice when it first received notice of the loss from a purported additional insured.  The carrier, however, investigated whether the entity giving notice of the loss was actually an additional insured.  The Appellate Division held that the disclaimer based on late notice, issued four months after the carrier received notice, was untimely, despite the ongoing investigation that was being conducted by the carrier.

How this duty-to-disclaim-immediately rule can be reconciled with the single disclaimer rule was left unanswered by the court.  No doubt additional appellate litigation on the subject will ensue!

Read the Fine Print in Cruise Ship Contracts.

The world’s attention has dutifully been directed to the Italian cruise ship tragedy and the allegedly cowardly acts of the captain.  But, as is always the case, tragedy begets the opportunity for litigation.  However, as this NYT piece points out, it is not so easy to sue a cruise ship owner/operator.  Good news for insurers, but bad news for lawyers and litigants.

For more information about this post or WCM’s maritime practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.



There’s Still No FSMA Will.

The more things change, the more they stay the same (with apologies to Heraclitus).  We have spilled much ink (or at least web space) writing on the FSMA and the lack of budgetary clout to support its ambitions.  According to recent reports, an additional $1.5 billion is required to fully fund the FSMA’s lofty ambitions.  We think it is doubtful, in the current political and economic climate, that the funding will arise (unless, of course, there’s a major food borne illness catastrophe).  In the meantime, the FSMA will largely remain a toothless tiger.

For more information about this post or WCM’s product recall practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

Philly Wins Again!

We think judicial hellhole rankings are titillating (although, as we all know, no matter what the jurisdiction is, there’s no way of accounting for what a judge or jury might do).  And we have previously written on the 2011 and 2010 rankings.  This year we have good news for all you Philadelphia fans: Philadelphia wins again!  For the second year in a row, Philadelphia is the worst jurisdiction in the country in which to be a defendant.  But sadly, given the passage of tort reform, it seems possible that Philadelphia might fall from its vaunted perch.  Perhaps NY, which is # 3, can catch up?  Just like the Mets say (in response to the Phillies) — there’s always next year!

For more information about this post of WCM’s Pennsylvania practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.