voluntary payments provision

West Bend Mutual Insurance Co. v. Arbor Homes LLC

A recent Seventh-Circuit case should serve as a cautionary tale that business owners need to consider the requirements of applicable insurance policies when trying to resolve a quality issue with a customer.

When Arbor Homes LLC’s plumbing contractor, Willmez Plumbing Inc., made a major mistake, Arbor worked with its customers, the Lorches, to make them whole. Unfortunately for Arbor, it didn’t comply with the requirements of the plumber’s commercial general liability insurance policy with West Bend Mutual Insurance Co. — under which Arbor was an additional insured — which allowed West Bend to successfully deny the claim.

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