The question of the month deals with the duty of the insurer to defend and a subsequent attempt by the insurer to recover defense costs from the insured. There is very little question about the duty of the insurer to initially offer a defense to its insured when the insured is sued for a liability claim. But, following a legal determination that the duty to defend did not in fact arise, perhaps because of an applicable exclusion, can the insurer get its defense expenses back from the insured?

Insureds may defy the attempts of the insurer, attorneys may argue against them, and court decisions may come down on both sides of the issue. So, what is the status of litigation surrounding an insurer's claim to reimbursement of defense costs? Is the legal trend favorable to insureds or insurers? And, is the fight for reimbursement worth it to insurers?

For answers to these questions and a review of court decisions on the matter, link onto the designated article in the FC&S Bulletins.

The court cases noted in the Dec Page pertain to questions about coverage under an auto policy, a watercraft policy, and general liability policies. The auto coverage question deals with an accident that occurred after the insured auto was repossessed; does the insured's auto policy apply to a claim even though the auto was in the possession of the repossessor at the time of the accident? The watercraft policy covered the named insured and his children, but what happened when the child allowed a third person to use the watercraft; a court in Michigan addressed this issue. The first general liability case revolved around the fact that the managing general agent of the insurer retained unearned premiums even though the policy had been cancelled; what was the impact of this action on the applicability of the policy? And finally, the damage to property exclusions in the general liability policy are discussed by a court in Florida , with the added feature that the Montrose endorsement to the CGL form is also addressed.

Questions and Answers:

Is there coverage under the CGL policy for alleged theft by insured employee? See CGL Coverage for Alleged Theft by Employee. Is there coverage for lost wages and loss of use for claimant whose vehicle is damaged while in the care, custody, control of the insured valet company that has a BAP and garagekeeper's endorsement? See Business Auto and Claimant's Lost Wages. Can an employee injured while taking an off-premises break be eligible for WC? See Workers Comp for Employee on Break. Should a new phone system be used to replace a reconditioned phone system that was damaged by a covered cause of loss? See Replacement Cost Defined.

Inland marine -AAIS Contractors Equipment Floater:

AAIS provides two separate contractor's equipment floaters, IM-7000 and IM-7001. The forms were revised and updated in 2004. This article discusses the changes in the property portion of the new forms and also highlights differences between AAIS and the ISO forms. See Contractors Equipment Floater-AAIS. This article can be found on the Inland Marine L-5 pages.

Good Samaritan Statutes:

All states have statutory provisions regarding who is protected when administering medical assistance in emergency situations. The chart that contains information on these statutes has been updated and can be found at Good Samaritan Statutes.