The article of the month in the Dec Page deals with contractual liability insurance. Contractual liability insurance can be defined as coverage for the named insured's liability that is created when it assumes the financial consequences of another's negligent acts or omissions that result in bodily injury or property damage to a third party. To better understand contractual liability coverage as provided by a CGL form, some knowledge of the mechanics is required. The article on the Public Liability M.30 pages offers this knowledge.

See the designated article in the Bulletins for information on the meaning of contractual liability, who the common parties are, and the policy mechanics.

The court cases in the Dec Page come from New York, the Seventh Circuit Court of Appeals, the Second Circuit Court of Appeals, and the Eleventh Circuit Court of Appeals.

The Court of Appeals of New York was required to determine whether the term “residence premises” in an insurance contract is ambiguous where an insured purchased a homeowners policy in advance of a closing date, but was unable to move in due to the need for major repairs. The Seventh Circuit addressed the issue of coverage for an additional insured, with the major question being whether the additional insured had coverage for its own negligence. The Second Circuit Court dealt with reinsurance and the right of action against reinsurers. The underlying policy holder filed a lawsuit directly against the reinsurer and the court had to decide if the policyholder had the right to sue the reinsurer. The final case comes from the U.S. Court of Appeals, Eleventh Circuit, and deals with the duty to defend and vicarious liability.

Questions and Answers:

If an insured moves to help an elderly relative but maintains ownership of the first house, is the original dwelling still occupied by the insured? See Residency and Ownership. If a ring is lost in a vehicle accident, is there coverage for the ring under the homeowner's policy? See Loss of Ring in Vehicle Accident. Is the residue from a kerosene lamp covered for cleanup? See Residue from Kerosene Lamps.

Is a property titled in the name of an LLC covered under the homeowners policy? See Dwelling Title in Name of LLC. How long is payment for additional living expenses provided? See Time Frame for Additional Living Expense Payments. When a foundation cracks because of drought, is there coverage? See Drought and Cracked Foundation.

Failure to Supply Exclusion:

Both private and public companies that are service providers, such as water companies, gas dealers, and municipalities are likely to find a failure to supply exclusion on their primary and umbrella/excess liability policies. It is difficult to pin down the purposes of these exclusions because they vary in scope, but taking the standard ISO endorsement as a guide, the main purpose is to preclude coverage for injury or damage arising out of the failure to adequately supply gas, water, oil, electricity, etc., etc. The discussion on the Public Liability M.32 pages helps to understand the failure to supply exclusion, how it applies, and how it varies by insurer.

See Failure to Supply Exclusion.

Bailee's Customers Insurance:

Bailee's customers insurance provides custody for bailees, such as dry cleaners, for the property of others that is in their care. This article on the Specialty Lines Bc- pages discusses bailee's customers insurance and the coverage it provides. See Bailee's Customers Insurance.