December 2010 Intro Page
Dec Page
The question of the month deals with governmental action. Property coverage forms commonly contain exclusions for loss caused by governmental destruction, confiscation, or seizure of property. However, the governmental action exclusion is not ironclad and the question is: how can the insured know when a loss due to governmental authority is covered by his property policy? The policies themselves often contain mitigating phrases and court interpretations can overrule the exclusion. So, how applicable is the governmental action exclusion and how do different jurisdictions view the exclusion?
For an analysis of the exclusion and a review of judicial rulings on the matter, see the designated article in the Bulletins.
The Dec Page also has information on the Chinese drywall issue. The Dec Page offers information on how the IRS will address losses claimed by individuals who have experienced the effects of corrosive drywall building materials. And, the latest status report from the U.S. Consumer Product Safety Commission on new developments in the investigation of imported drywall is presented.
The court case presented deals with the choice of law rule in a workers compensation dispute. A worker was injured while working on a construction site in Mississippi but had workers compensation coverage under a policy issued to the employer who was based in Alabama . When the employee sued a party based on a negligence claim, the issue was whether Alabama law or Mississippi governed. The Fifth Circuit had to decide which state law prevailed and allowed or disallowed the worker to file a negligence claim in addition to his workers compensation benefits.
Questions and Answers
What exactly is an assumed obligation? See Assumption of Obligation Explained. Is an outdoor irrigation system part of the plumbing system of the house? See Irrigation System Plumbing or Not.
Is loss of money transferred from a check verification system theft? See Loss and Check Verification System. Is a son living in an other structure on the premises considered part of the household? See Son Living in Other Structure a Member of the Household
Businessowners Property Coverage Part II:
The BP 00 03 01 10 form incorporates special perils coverage for property, liability coverage, and policy conditions. This discussion, which focuses on the sections applicable to the property coverages, has been updated with the changes that were made to the 2010 edition of the form. The businessowners conditions and liability coverage are discussed in different sections. See Businessowners Property Coverage, Part II.
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