The Policyholder’s Perspective from Brandon McWherter
The Insurance Company’s Perspective from Parks T. Chastain

Coverage Issues

Subscribe to Coverage Issues

The Occupational Safety and Health Act was signed into law in 1970 by President Nixon, and the Occupational Safety and Health Administration (OSHA) was simultaneously created to implement, administer, and enforce its requirements. OSHA’s mission is to “assure safe and healthy working conditions for working men and women by setting and enforcing standards and by…

I draw your attention to the June 25 Tennessee Court of Appeals decision in the case of Dutton v. Tennessee Farmers Mutual Insurance Company which addressed the question of whether misrepresentations made on an initial policy application which unquestionably increased the risk of loss would still operate to void that coverage when multiple renewals of coverage had taken place. Dutton v TN Farmers. The applicants unquestionably made misrepresentations on the policy application which were material, specifically dealing with drug use and convictions for drug related crimes. After the policy was issued (based upon that application), time passed, and multiple renewals occurred. In pertinent part, the changes made to the policy included the deletion of the individual who had the drug related problems. The insured argued the changes to the policy meant the misrepresentations no longer had any bearing on the risk that Tennessee Farmers was insuring.
Continue Reading Misrepresentation at Inception of Policy is Effective to Void Coverage Even After Renewals

In the case of Jefferson County Schools v. Tennessee Risk Management Trust, et al., No. E2017-01346-COA-R3-CV (decided March 15, 2018) (Jefferson County Schools v. TN Risk Management), the Tennessee Court of Appeals addressed the question of whether a Fire Marshal’s directive qualified as an “ordinance or law” for purposes of insurance coverage. Following a major rainstorm, a building at the Jefferson County High School collapsed.
Continue Reading What Constitutes an “Ordinance or Law”?

This past Friday (Aug. 4, 2017), Mississippi’s Insurance Commissioner, Mike Chaney, issued a bulletin that alerts insurers that they should not be depreciating labor in Mississippi unless policy language clearly allows it, and even then, estimates must clearly delineate that labor was depreciated.  I’ve quoted the bulletin below:
Continue Reading MS Insurance Commissioner Issues Bulletin Regarding Labor Depreciation

Parks recently posted about the new Rules adopted by the Tennessee Commissioner of Insurance that go into effect on October 9, 2017.  The first of those rules makes clear the purpose “is to set forth minimum standards for the investigation and disposition of claims.”  (Rule 0780-01-05-.01).  While there are plenty of items worthy of discussion in the Commissioner’s soon-to-be effective Rules, the one that stood out to me  relates to “matching.”  Here’s what the Rule says:
Continue Reading Commissioner Confirms Insurers Must Pay for Matching

The Court of Appeals recently provided further insight on what type of misrepresentations increase the risk of loss. In the case of Freeze v. Tennessee Farmers Mutual Insurance Company, filed March 28, 2017 (Freeze v. TFMIC), the Eastern Section Court of Appeals upheld the grant of summary judgment to Tennessee Farmers in a case which alleged misrepresentation under T.C.A. § 56-7-103, which provided as follows:Continue Reading What Misrepresentations Increase the Risk of Loss?

Several years ago I discussed a Sixth Circuit Court of Appeals case where the court determined that general contractor’s Overhead and Profit were recoverable if the insured would “reasonably be expected to hire a contractor to repair its property”  See Parkway Assoc., LLC v. Harleysville Mut. Ins. Co., 129 Fed. Appx. 955 (6th Cir.…