Insurance Law

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in action seeking declaration that policy issued by defendant-insurance company covered losses incurred by plaintiff-insured arising out of accident occurring on plaintiff’s construction site. Defendant was entitled to summary judgment to extent plaintiff sought recovery under “Builder’s Risk” provisions of policy, where said provisions limited coverage to losses arising out of plaintiff’s physical structure, and where plaintiff’s economic and consequential losses concerned expenses associated with delay and loss of use of plaintiff’s airport facility. Also, plaintiff was not entitled to receive benefits under policy’s “soft cost” provisions arising out of delay in completion of construction policy, where: (1) coverage was subject to 90-day “delay” deductible; (2) plaintiff’s airport facility actually opened for business within 90 days of scheduled opening date of said facility; and (3) plaintiff failed to identify any “soft costs” in terms of bond interest payments occurring after facility’s opening date. Dist. Ct. erred, though, in granting defendant’s motion for summary judgment with respect to ERAL provisions of policy that covered losses arising out of plaintiff’s attempts to reduce delay in construction project arising out of accident, where: (1) Dist. Ct. improperly found that plaintiff could not receive such expenses in absence of any compensable soft cost claim; and (2) jury question remained as to whether plaintiff incurred additional costs for re-sequencing and accelerating construction project to minimize delay in construction project.

Dist. Ct. did not err in granting defendant’s motion for summary judgment in action by plaintiffs alleging that defendant breached duty of reasonable care under Ill. Insurance Procurement Liability Act to procure insurance on behalf of plaintiffs, where defendant failed to point out obvious signs that ultimate provider of said insurance was dishonest and that insurance eventually procured for plaintiffs turned out to be complete fraud. Record showed that neither plaintiffs nor any insurance broker in procurement chain ever requested defendant’s assistance with placement of said insurance, and that while defendant wanted to obtain commissions with respect to said insurance, defendant did not receive any commissions from fraudulent insurer. Ct. also rejected plaintiffs’ claim that defendant owed them duty under common law negligence principles, where Ct. found that defendant had made no affirmative undertaking to procure said insurance. Fact that defendant had performed on behalf of owner of company that provided fraudulent insurance certain administrative tasks on policies that were issued to other insureds did not require different result.

Dist. Ct. erred in granting defendant-insurance company’s motion for summary judgment in plaintiff’s action seeking additional payments from defendant pursuant to under-insured (UIM) provisions of defendant's $1 million commercial automobile policy, as well as defendant’s $5 million commercial umbrella policy that had been issued to plaintiff’s employer, where plaintiff sought said proceeds for injuries sustained in automobile accident incurred during plaintiff’s employment. While defendant paid plaintiff $900,000 under commercial automobile policy and $382,314.21 under umbrella policy (i.e. $1 million in UIM coverage less $617,685.79 that plaintiff had received in net workers’ compensation benefits), plaintiff was entitled to seek more insurance proceeds from umbrella policy, since Indiana statute required defendant to provide in its umbrella policy UIM coverage in amount equal to policy’s general liability limit of $5 million and not some lesser amount, where, as here, defendant had provided UIM coverage in umbrella policy. Fact that defendant was not required by statute to provide any UIM benefits in its umbrella policy did not require different result. Moreover, defendant was not entitled to subtract plaintiff’s receipt of workers’ compensation benefits from proceeds of umbrella policy since terms of said policy only required offset of workers’ compensation benefits received by plaintiff that were in excess of $1 million “retained limit.”

Dist. Ct. did not err in granting defendant’s motion for summary judgment in action by plaintiff-insurance company seeking declaration that it had no duty to defend or indemnify defendant in underlying action alleging that defendant’s customer incurred personal injuries from fitting room door supplied by insured, where defendant asserted that it was additional insured under terms of policy issued by plaintiff due to supplier agreement between defendant and insured. Supplier agreement required insured to name defendant as additional insured in commercial general liability policy, and that plaintiff’s policy promised to pay for bodily damages arising out of said fitting doors. Moreover, while language in customer’s personal injury action focused on defendant’s alleged negligence, allegations in said complaint fell within policy’s coverage where: (1) customer asserted bodily injuries arising out of insured’s door; and (2) defendant’s third-party action alleging that defendant was negligence with respect to door’s design and materials used in door fell within policy’s coverage. Also, plaintiff was responsible for entire settlement amount that defendant had negotiated with customer, where, although there was no evidence indicating allocation of settlement between covered and uncovered claims, defendant made settlement of otherwise covered loss in reasonable anticipation of liability in customer’s lawsuit.