Earlier this year the Oregon Supreme Court expanded the potential liability of contractors and others for injury to employees of others on a job site, making it more critical than ever for contractors to ensure that they have additional insured protection. In Yeatts v. Polygon Northwest, an employee of a framing subcontractor on a building project was injured when a railing gave way. The general contractor on the project was Polygon. The injured worker sued Polygon under Oregon’s Employer Liability Law (“ELL”) (ORS 654.305) alleging that Polygon was a “indirect employer” under the law because Polygon was involved in ensuring job-site safety, and was therefore liable for the injuries.
Can a policyholder that knowingly purchases contaminated property be covered for the costs of cleaning up that property under policies of insurance issued before the purchase? Yes, according to a new unpublished decision from the Washington Court of Appeals.
In 1999, the Port of Longview purchased property that had been used from the 1950s through 1982 to treat wood products with creosote and other chemicals. Groundwater contamination had been discovered at the site as early as 1981. The Port knew of the groundwater contamination at the time of purchase, and knew that its acquisition of the site would automatically make the Port liable under the Washington Model Toxics Control Act (“MTCA”) for the contamination there. In 2005, the Washington Department of Ecology (“DOE”) formally notified the Port that it was a potentially liable party (“PRP”) under MTCA for the cleanup of contamination at the site. Continue Reading
Director & Officer Liability insurance (“D&O”) and professional liability insurance are written on a claims-made basis, and through either definitions or exclusions, treat claims that are related as one claim. Why does it matter if various claims made against an insured are related? There are several answers. Whether different claims are related could mean the difference between having insurance coverage or not; whether the insured has to pay one retention or several retentions; or whether one policy limit applies or several limits are available. This post will discuss the last of these.
The purpose of “related claim” language in an insurance policy is to require that separate claims, or lawsuits, are treated as one claim made at the time the earliest claim was made. In an unpublished opinion earlier this year, the Ninth Circuit affirmed a district court’s ruling where 28 lawsuits filed over a three-year period against the insureds were all one claim, and only one policy limit applied. In Previti v. National Union Fire Insurance Co. of Pittsburgh, PA, the insureds were various individuals who owned or controlled numerous affiliated entities. National Union had issued three D&O insurance policies to the insureds—Policy No. 1 (2007-2009), Policy No. 2 (2009-2010), and Policy No. 3 (2010-2011). National Union’s insurance policy defined Related Wrongful Acts as “Wrongful Acts which are the same, related or continuous, or Wrongful Acts which arise from a common nucleus of facts. Claims can allege Related Wrongful Acts regardless of whether such Claims involved the same or different claimants, Insureds, or legal causes of action.” Continue Reading
Cyber-ransom is the talk of the town when it comes to insurance these days, second only to social engineering fraud. A cyber-ransom event typically involves malicious code (malware) being installed on an individual computer or a system, typically through a “phishing” e-mail that contains an innocent-looking link (often to a legitimate site, such as Dropbox) that actually leads to an executable file, downloading malware. Once inside, the malware encrypts the system, shutting it down or hobbling it significantly. The malware then sends a ransom demand, offering to restore access to the system in exchange for payment ranging from a few hundred dollars to thousands. Payment is usually demanded in bitcoins, the “currency” of choice for those who operate in the dark web. Continue Reading
In case you missed this last week, our friends at HFO Investment Real Estate have published an excellent video (posted here with permission) featuring an extensive interview with Vice Presidents Heidi Tapasa and Ted Stark of USI Insurance Services on the subject of cyber liability for apartment owners and managers. You can view the full interview below.
In the past few months we have seen a few new developments on the cyber-risk frontier, including a court decision in Arizona in the P.F. Chang’s case, and the emergence of social engineering fraud as a stand-alone coverage. Here are three action items to help Northwest businesses manage cyber-risks effectively through insurance. Continue Reading
Last Thursday, the Oregon Supreme Court issued its opinion in Goodwin v. Kingsmen Plastering, Inc., 359 Or 694 (2016), holding that the deadline to file a negligent construction-defect claim is two years from the time a plaintiff knew or should have known of damage resulting from the defect—not six years, as applied by the lower courts in the same case. This decision has implications for owners of residential and commercial structures because it narrows the window to discover and file a claim for defective work against a contractor. And while the decision appears to be a victory for contractors on first glance, the ensuing insurance implications could deal contractors a heavy blow. Continue Reading
I ran across a cautionary tale recently in a new Washington federal-court decision in Staheli v. Chicago Insurance Company. The lesson: in Washington, or any other community-property state, a liability policy covering a sole proprietorship must define “insured” broadly to cover the spouse of the proprietor. This is a cautionary tale for insurance agent/brokers as much as anyone, as failure to advise a client about this issue could create E&O exposure.
The facts of Staheli are pretty straightforward: Mrs. Staheli operated a psychological counseling business as a sole proprietorship, and was sued by one of her patients for professional negligence. Because Washington is a “community property” state, the patient sued not just Mrs. Staheli but also her husband and their “marital community.” Continue Reading
Oregon and Washington are often viewed as sister states, similar in their climates, policies and attitudes. Yet, while the two states share a border and a uniquely Pacific Northwest culture, their approaches to insurance law differ greatly. In particular, the legal protections to prevent insurers from wrongfully refusing to defend a policyholder against a covered claim differ greatly, creating divergent incentives for insurers. Where Oregon offers a veritable paradise for the insurer, Washington provides strong protections for the policyholder. Insurers are therefore much more likely to refuse to defend a claim in Oregon than in Washington. Continue Reading
I was privileged enough to be invited to write the following guest blog post on May 2, 2016 for the blog of United Policyholders, an advocacy organization for commercial and personal-lines policyholders. Our firm has had the privilege of writing several amicus briefs for UP over the years, including one discussed below. UP is a wonderful organization – for more information on UP please click here. My thanks to UP for allowing us to re-post this entry.
Today was a big day for policyholders involved in the legendary Portland Harbor (Oregon) Superfund Site: two cases in which United Policyholders submitted amicus curiae briefs were up for argument before the Ninth Circuit. Both cases involve the duty to defend under “long-tail” CGL policies and the application of Oregon’s statutory protections for policyholders, including its unique statute relating to coverage disputes in environmental cases, the Oregon Environmental Cleanup Assistance Act (“OECAA”).