The question of the month deals with the duties of the insured after a loss. In the event of loss or damage to covered property, the building and personal property coverage form describes several duties that the named insured must perform. Often, these duties require that the named insured spend time and money, and the insured may not even be clear as to what he has to do to fulfill his obligations under the terms of the insurance contract. As examples: what does the insured have to do to fulfill the duty to cooperate with the insurer; what does he have to do to protect covered property from further loss; and, since the insured has a duty to notify the police if a law has been broken, how is an insured supposed to know if a law has been broken?

Since a breach of the duties of the insured after a loss may lead to the insurer trying to deny a claim or to completely void the insurance contract, it is important for the insured to know and understand his duties. For information on the duties and on legal decisions to help in understanding these contractual obligations, link onto the designated article in the FC&S Online.

The Dec Page also offers the last part of an article on businessowners and intellectual property issues that was written by Ms. Erin Fay and Ms. Julie Frymark; the first part was in the April FC&S e-ALERTS. In this part, the authors discuss patent infringement and its coverage (or lack thereof) under general liability policies. Case law is presented in order to understand the current judicial view of general liability policies and patent infringement.

Two cases, one from Maine and the other from New Hampshire, discuss the issue of how the use of an auto can be interpreted in disputes over whether a claim is covered. The New Hampshire case deals with uninsured motorists coverage, hit and run autos, and dog bites. The Maine case discusses the unloading of an auto and how that relates to liability coverage under a homeowners policy.

PAP Revision

Insurance Services Office (ISO) has revised the personal auto policy (PAP) effective January, 2005. Although most of the endorsements remain the same (except for current edition dates), there are some changes. See Endorsements Used with the Personal Auto Policy.

Also see Extended Nonowned Coverage for information on this particular subject.

Questions and Answers

An insured is a road builder and uses a water truck to keep the dust down. What is the status of this vehicle under the CGL? See Mobile Equipment or Auto Under CGL?. See Primary Coverage v. Excess Coverage under a PAP, for a discussion on physical damage coverage for a rental vehicle.

Some personal auto policy forms are more restrictive than the ISO PAP. One subscriber asks about the “vehicle used in racing” exclusion with reference to such a policy. See Racing Exclusion Applies to Chase Vehicle?

Many policies contain language that precludes coverage for certain activities “arising out of and in the course of.” Often, the activity referred to is employment. How the exclusion should be read when one employee, while driving a company vehicle, injures another who is walking a picket line. See Arising Out of and in the Course Of.

One subscriber asks if the personal auto policy (PAP) medical payments coverage will pay the cost to travel to see a physician. See Medical Payments Coverage Applies to Travel Expenses?.

Our final question this month is on coverage for property under an installation floater. See Installation Floater and a Dispute over Covered Property.

Additional Insured Coverage

The Insurance Services Office (ISO) has published revised additional insured endorsements for the purpose of negating coverage for an additional insured for its sole negligence. Now, some states are following up on this effort with legislation. Mr. Randy J. Maniloff has written an article describing the attempts by some states to restrict coverage for additional insureds under general liability policies. The article offers examples of legislation from various states and presents a conclusion as to the effect of expanded anti-indemnity statutes. See Additional Insureds Coverage and Legislative Changes on the Horizon.

Mr. Maniloff is an attorney at White and Williams, LLP in Philadelphia. He concentrates his practice in the representation of insurers in coverage disputes over primary and excess policy obligations for various types of claims. Mr. Maniloff has written several articles for FC&S on various topics, such as the known loss doctrine (Montrose) and additional insured endorsements.