insurance

Post image for Be Careful about Contractual Duties to Provide Insurance

When someone takes on a contractual obligation to provide insurance, that duty can preclude them from looking to the other party for damages covered by the required insurance.

In Storey v. RGIS Inventory Specialists, Kenneth Storey leased property to RGIS. The property was destroyed by a fire allegedly caused by one of RGIS’s employees. The lease required RGIS to repair damages to the leased premises caused by the negligence or intentional acts or omissions of RGIS, its agents, servants, or employees. Storey sued RGIS for damages resulting from the fire. The court dismissed Storey’s case on a summary judgment motion.

Why wasn’t Storey able to recover from RGIS? Because provisions in the lease agreement–including Storey’s obligation to provide insurance–showed that the parties intended to exempt RGIS from liability for loss from fire. The lease required Storey  to procure insurance for the benefit of both parties in an amount equal to the replacement costs of the leased premises. In addition, the lease required RGIS to surrender the premises in good order “ … damage by fire … excepted,” which evidenced the parties’ intent to exempt RGIS from liability from loss from fire.

[click to continue…]

Digg This
Reddit This
Stumble Now!
Share on Facebook
Bookmark this on Delicious
Share on LinkedIn
Post on Twitter

{ 0 comments }

Safety National Casualty Corp. v. Austin Resolutions, Inc.

Safety National Casualty Corporation (“Safety National”) engaged Austin Resolutions, Inc. (“Austin”) to negotiate savings on bills from a hospital. The bills were Safety National’s responsibility by virtue of a claim against an excess workers’ compensation policy Safety National had issued. Under the oral agreement between Safety National and Austin, Austin was to be paid 25% of any savings it negotiated.

The claim under Safety National’s excess liability policy arose out of serious injuries sustained by an employee of Safety National’s insured in a car accident while on the job. [click to continue…]

Digg This
Reddit This
Stumble Now!
Share on Facebook
Bookmark this on Delicious
Share on LinkedIn
Post on Twitter

{ 0 comments }