In Housing and Redevelopment Ins. Exchange v. Lackawanna Cty., the court was asked to determine if a commercial insurance policy was properly cancelled by an insured’s agent prior to suffering a loss.
In this matter, the insured owned a commercial property that was insured by Housing Redevelopment Insurance Exchange.  In February 2007, the property’s roof collapsed, due to snow, causing almost $2 million dollars’ worth of damage.

The insurance company filed a declaratory judgment action claiming that the policy had been effectively cancelled in January 2007; thus, the loss had occurred outside the policy period.  Specifically, the insurance company averred that the insured’s broker of record for the insurance policy, at the verbal instruction of the insured’s attorney, had cancelled the policy.

On this basis, the insurance company moved for summary judgment.  The court denied the insurance company’s motion finding, inter alia, that there was a genuine dispute as to whether the insured’s broker of record or attorney had authority to effectively cancel the policy.  This issue, the court concluded, went beyond policy interpretation and created triable issues of fact that needed to be addressed by a jury and not in a motion for summary judgment.

Thanks to Colleen Hayes for her contribution to this post.