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Paul Zimmerman
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Showing 7 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)