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Paul Zimmerman
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Showing 11 posts by Warren A. Koshofer.

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UK Supreme Court: Fraud Trumps the Finality of Settlements

In a recent decision that can have equal application in the United States, the UK Supreme Court ruled that fraud trumps the public policy arguments of finality and encouragement of settlements. (Read More

 

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New FAA Rules on Commercial Drone Use: Insurance Considerations

New rules promulgated by the U.S. Federal Aviation Administration (FAA) went into effect on August 29, 2016, clarifying what is acceptable commercial usage of small unmanned aerial vehicles (UAVs), also known as drones.

As a result of the new safety rules, the FAA estimates that there will be 600,000 commercial drones operating in the United States by the end of the year. If these growth projections materialize, the estimate for the U.S. drone insurance market is $500 million by the end of 2020. (Read More)

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A Sign of the Times: Philadelphia Insures Against Police Liability Claims Ahead of the Democratic National Convention

Given the current climate of hard-fought elections, law enforcement backlash, and fervent nationwide protests, it is no surprise that the insurance industry is being called upon to mitigate the significant risk surrounding major political events. The 2016 Democratic National Convention will be held at the Wells Fargo Center in Philadelphia from July 25 through July 28, 2016, and the City of Philadelphia is preparing.  Following Benjamin Franklin’s wise words that an ounce of prevention is worth a pound of cure, the City has purchased a law enforcement liability insurance policy to protect against it or its police officers being sued over the performance of their duties during the Democratic National Convention. (Read More)

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California Appeals Court Rejects Insurer’s Reliance on Contractual Escape Clause

According to a closely watched decision, an “other insurance” clause in a comprehensive general liability policy will not, as a matter of public policy, permit the insurer to avoid having to pay a share of the insured’s defense costs. In Certain Underwriters at Lloyds, London v. Arch Specialty Insurance Co, a California appeals court ruled, on April 11, 2016 that Arch Specialty Insurance Co. (“Arch”) cannot avoid paying its share of the defense of its co-insured's in construction defect litigation despite the existence of a policy provision stating that it would not pay if "other insurance" afforded a defense. The Appellate Court found that the trial court erred in enforcing the “other insurance” policy provision, holding that so-called “escape clauses” which exempt a primary insurer from liability if there is other primary insurance for the loss are contrary to public policy. (Read More)

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Attack of the Drones: Unmanned Aircraft Raise Coverage and Liability Questions

The commercial use of drones has increased exponentially over the past few years. Under federal law, anyone who intends to use drones for non- recreational purposes (e.g., commercially) must petition the Federal Aviation Administration (“FAA”) for a registration exemption. The number of petitions granted by the FAA has grown from a few hundred as of 2012 to a few thousand as of last month. At this rate, the FAA estimates that some 10,000 drones may be in commercial use by 2018. (Read More)

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U.S. Magistrate Judge Recommends Finding for Insurer Due to No Final Judgment Against its Bankrupt Insured

On February 29, 2016, a Texas Magistrate Judge recommended that the District Court for the Southern District of Texas grant summary judgment in favor of an insurer faced with a $63 million bid for coverage (Kipp Flores Architects, LLC v. Mid-Continent Casualty Co).  U.S. Magistrate Judge Mary Milloy noted that plaintiff Kipp Flores Architects (“KFA”) failed to obtain the requisite final judgment necessary to pursue recovery against insurer Mid-Continent Casualty Co. (“Mid-Continent”). KFA had predicated its claim against Mid-Continent on a Chapter 7 bankruptcy proceeding involving Mid-Continent’s bankrupt insured, Hallmark Collection of Homes LLC (“Hallmark”). (Read More)

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Insurer Prevails on Rescission Claim Against H.J. Heinz Co.

On February 1, 2016, Judge Arthur J. Schwab of the Western District of Pennsylvania overrode a jury verdict and ruled that Starr Surplus Lines Insurance Company (Starr) can rescind its policy covering H.J. Heinz Co. for up to $25 million in losses tied to the accidental contamination of baby food because Heinz made material misrepresentations in its insurance application. (Read More)

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Infrared Video Shows Natural Gas Plume in Porter Ranch

A new infrared video released on YouTube by the Environmental Defense Fund shows a steady plume of natural gas emanating from a damaged injection well in Porter Ranch.  The damaged well taps into a large natural gas storage facility that is over 8,000 feet deep and has a capacity of 86 million cubic feet.  The YouTube video gives an ominous visual to the gas leak that was first discovered on October 23, 2015 and is estimated to be pumping about 2,400,000 pounds of methane, a greenhouse gas, into the atmosphere each day.  Environmentalists estimate this volume of emission is equivalent to that coming from eight or nine coal plants, or some seven million cars.  Speculation is already beginning on alleged impacts the methane emissions may have on the atmosphere and climate.  (Read more)

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Flint, Michigan Mayor Declares State of Emergency over Lead Poisoning

Yesterday evening, Karen Weaver, the newly elected mayor in Flint, Michigan, declared a state of emergency due to the number of children and infants who have allegedly suffered lead poisoning from the city’s tap water. According to numerous reports, the lead exposure in Flint began in the spring of 2014, when Flint switched its water source from the Detroit water system to the Flint River, as a cost cutting measure.  (Read more)

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SoCalGas Sued in Class Action over Porter Ranch Gas Leak

The lawsuits relating to a leaking injection well at the Alison Canyon natural gas storage reservoir near the community of Porter Ranch have begun.  On December 2, 2015, the R. Rex Parris Law Firm filed a purported class action complaint in the California Superior Court, County of Los Angeles, against Southern California Gas Company, its parent company Sempra Energy, and the State Division of Oil, Gas and Geothermal Resources alleging, among other things, causes of action for negligence, trespass, private nuisance, public nuisance and inverse condemnation. (Read more)