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Insurance Law
Villanova University School of Law
Saiman, Chaim N.

Saiman VLS –  Insurance, Fall 2016
 
UNIT 1
Is there any ambiguity or plain meaning?
Reasonable expectations? – Gaunt, Reynoldson
Different gradients
Can be argued in conjunction with: CF, unconsionability, waiver/estoppel, misrepresentation, etc.
Contra Proferentum? Gaunt
Implied Warranty? – C&J
Unconsionability? -C&J
Formal adherence to contract language? – C&J Dissent, Le Grande
Is there an argument for waiver or estoppel?
Waiver: [intentional/voluntary relinquishment of claim] RLLI 5
: Collecting premiums and accepting policy when agents knows the individual is in violation of the policy may lead to waiver of enforcement of that provision.
Bible v. John Hancock ( woman had insurance, agent knew she was at mental institution but collected her premiums. No coverage because they knew they had right to deny coverage but they kept accepting her premiums)
: Waiver can still occur in legal uncertainty if the insurance company knows of the existence of the claim and of its legal uncertainty AND once a right is waived, the waiver cannot be withdrawn even if subsequent events show the right waived is more valuable than anticipated
Jenkins v. Indemnity (car accident, unsure if NY law applies or not, irrelevant that insurance company was unsure of the law they waived their right to contest)
Estoppel [misrepresentation + detrimental reliance] RLLI 6
Darner v. Universal (guy thought he has certain car coverage, insurance said he did, turns out he didn’t, giving him coverage)
Are there insurance intermediaries giving rise to agency law?
Insurance Broker or Agent?
Do omissions/actions bind the insurance company?
Actual Authority?
Apparently Authority?
Are omissions actionable?
Is the insurance agency waived or estopped through intermediaries actions
Insco was not liable because it was a broker and not an agent that had relationship solely with D – Economy Fire and Casualty v. Bassett
Can agent be liable even if insurance agent is not?
  Liable if he/she neglects to procure insurance, follow instructions when obligated to do so, if the principal suffers damage by reason of any mistake, error or omission on behalf of the agent, or if the policy obtained is void or materially defective through the agent’s fault – Id. (agent had relationship with D, since he acted negligently in failing to recommend additional coverage when he knew she needed it → liable in tort)
There is no general duty for insurance agents or brokers to advise, need:
Course of dealing
Requests for specific advice beyond just “good coverage”
Compensation for advice beyond commission
Objective sense of reliance on agent
Is there a misrepresentation?
Misrepresentation or warranty?
Use different approaches
RLLI 7
Misrepresentation was material → RLLI 8 (in the absence of misrepresentation reasonable insurer would not have issued policy or would have done so under substantially different terms)
Insurer reasonable relied on the misrepresentation → RLLI 9 (absent the misrepresentation, insco would not have issued the policy or only under substantially different terms, such actions would have been reasonable under the circumstances)
If insco has actual knowledge of true facts or of falsity → no detrimental reliance
If insco knows and says they don’t care about info → estopped from invoking defense
If there is something suspicious that would cause an objectively reasonable insco to undertake further investigation, reasonable reliance would impose such a duty.
Iowa: contribute-to-the-loss
MA: intent to deceive or increase risk of loss
NY: material misrepresentation, material if reliance by insco.
Does insco have policy in place they failed to abide by?
Pum v. Wisconsin: woman said she had no disease because she didn’t think she did. Whether she should have known was a question for the jury, there was no reliance because insco had policy that anyone over 50 should be checked and they never checked Pum.
Was there disproportionate forfeiture?
Was the condition a material part of the exchange?
Would enforcement be disproportionate?
Notice pr

that activate coverage, subject to any applicable exclusions.
What type of trigger?
Harm: specified form of harm must take place, i.e bodily injury or property damage
Cause: specified causal act must take place, i.eprofessional services or accident
Claims: claim must first be made during the specified period
When was the trigger timed?
RLLI 33:  Question of fact, may be defined in the policy.
Issue of Long-Tail Harms
Types
Exposure → when injury producing agent makes initial contact
Manifestation → when the disease becomes manifested
Continuous Trigger → entire span from exposure to manifestation
Double Trigger → both exposure and manifestation, not the time between
Injury in Fact → when injury first exists in patient, works backwards from manifestation
Dispute whether how liability will be allocated amongst several insurers
Joint and several liability → D determine how to share burden
Equally divided among all potentially responsible parties
Allocate losses among carriers on basis of extent of risk assumed – See Owens -Illinois v. United Insurance
Property Damage
There is physical injury when there is a sufficiently high risk that would induce a rational owner to remedy – Eljer ( faulty plumbing system, injury was at installation because it was faulty to the point it should have been replaced).
Reasonable Expectations / Market Reality: If triggered when leak happened, it would not be insurable any more because it already happened. One risk materializes, insurance no longer has a function.
Tracks Tort Law: Tort law expanded to cover those that had no remedy because they were not physically touched.