CHAPTER 1

Policy Interpretation and the Rules of Construction

Introduction; Burden of Proof; Interpreting an Unambiguous Contract; Interpreting an Ambiguous Contract; Reconstructing Lost or Missing Insurance Policies

– Katie C. Pfeifer

CHAPTER 2

Reservation of Rights and Denials of Coverage

Introduction; Insurer’s Duties Upon Receipt of Claim Under Minnesota Statutes Section 72A.201; Violations of the Unfair Claims Settlement Practices Act; Purpose and Necessity of the Reservation of Rights Letter or Non-Waiver Agreement; Contents of the Reservation of Rights Letter; Effect of an Erroneous Reservation of Rights Letter; Denials of Coverage; Contents of the Denial of Coverage Letter; Effect of the Reservation of Rights or Denial of Coverage on the Obligations of the Insured and Insurer; Waiver and Estoppel; Appendix: Sample Letters

– Paula Duggan Vraa and Jennifer Young

CHAPTER 3

Misrepresentation or Omission in Applications for Insurance

Introduction; Common Subjects of Misrepresentation in Insurance Applications; Nature and Effect of Misrepresentations in Applications for Insurance; Risk of Loss; Timing of Misrepresentation; Burden of Proof – Question of Fact or Law; Misrepresentation as Affecting the Rights of Third Parties; The Agent’s Role; Attempting to Insure a Known Loss; Misrepresentation in Applications Concerning Potential for Future Claims; Incontestability Clauses; Effect of Renewal on Misrepresentation or Concealment in the Original Application; Estoppel/Waiver/Inconsistent Act; Misrepresentation in Making a Claim

– Terrance Votel

CHAPTER 4

Bad Faith and Wrongful Refusal to Settle: Liability in Excess of Policy Limits

Introduction to First-Party and Third-Party Bad Faith Claims in Minnesota; The Basics of Minnesota’s First-Party Bad Faith Statute, Minnesota Statutes Section 604.18; Unresolved Questions Surrounding Minnesota Statutes Section 604.18; Third-Party Bad Faith Claims Related to an Insurer’s Bad Faith Refusal to Settle; Standards for Determining “Bad Faith” and Wrongful Refusal to Settle; Related Issues – Bad Faith and Wrongful Refusal to Settle

– John M. Anderson and Shanda K. Pearson

CHAPTER 5

Duties of Insured

Introduction; Duty to Provide Notice of Claim; Duty to Cooperate; Duty to Provide a Statement; Duty to Be Truthful and Forthcoming; Duty Not to Make Payments/Assume Obligations; Duty Not to Destroy Subrogation and Recovery Rights; Duty to Attend Trial; Release of Insured’s Duties; Conclusion

– Elizabeth J. Roff

CHAPTER 6

Duty to Defend

Basis of Duty; Burden of Proving Duty to Defend; Basis for Determining Whether Duty to Defend Exists; Collateral Estoppel; When Can or Should Determination of Defense Duties Be Made?; Necessity of Tender; Scope of Duty to Defend; Duty to Defend is Broader Than the Duty to Indemnify; Right to Select Counsel and Control Litigation; Damages Recoverable for Breach of Duty to Defend; Apportionment of Defense Costs Between Covered and Non-Covered Claims; Defense Obligations in the Context of Multiple Insurers and Self-Insured Retention; Insolvent Insurers and Insurance Gaps

– John R. Crawford

CHAPTER 7

Priorities of Coverage

Introduction; Historical Background; The Closeness to the Risk Test; The Total Policy Insuring Intent Test; Automobile Cases; Specialty Insurance Cases; Trucking Cases; Fire Insurance Cases; Multiple Coverages Over Time; Conclusion and Recommendations

– Benjamin A. Johnson

CHAPTER 8

Excess Insurance

Introduction; Following-Form Excess Insurance; Duty to Defend Between Primary and Excess Insurers; Primary Insurer’s Right to Settle and Withdraw from Case – Enforceability of Loy Releases; Does an Excess Insurer Have an Obligation to Contribute to a Settlement Before Primary Limits Have Been Exhausted?; Settlement by Excess Insurer Over Objection of Primary Insurer; Excess Insurer’s Rights Against Primary Insurer for Wrongful Refusal to Settle; Insolvency or Bankruptcy of Primary Insurer – Drop-Down Coverage; Excess Insurance Coverage and the No-Fault Act; Payment of Insured’s Defense Costs, in Addition to Payment of Policy Limits

– Aimée D. Dayhoff and William T. Peffer

CHAPTER 9

Insurability of Punitive Damages

Introduction; Minnesota Law Governing the Award of Punitive Damages; Insuring Language and the Intended/Expected Exclusions; The Majority and Minority Rules Applicable to Coverage for Punitive Damages; The Rule in Minnesota and its Exceptions; The Importance of Choice of Law; Settlement Considerations; Conclusion

– Christopher H. Yetka and Bryan R. Freeman

CHAPTER 10

Commercial Trucking Insurance

Introduction; Interplay Between Federal and State Law; The MCS-90 Endorsement; Cancellation and Replacement of Policies; Coverage Issues Arising from Commercial Vehicle Leases; No-Fault Issues; Indemnity Under Minnesota No-Fault; Non-Trucking Use Coverage; Coverage on Semi-Trailers; Primary/Excess Issues

– Michael W. McNee, Andrea E. Reisbord and Tamara L. Novotny

CHAPTER 11

Fire and Property Insurance

Minnesota Standard Fire Insurance Policy: Substantive Coverages; Minnesota Standard Fire Insurance Policy: Procedural Requirements

– Diana Young Morrissey

CHAPTER 12

Homeowners Insurance

Introduction; Types of Coverage Provided by Homeowners Policy; Liability Protection; Exclusions; Specific Areas of Coverage Interest

– Jane L. Anderson

CHAPTER 13

Minnesota Courts’ Interpretation of “Occurrence” and “Property Damage” Issues

History of “Occurrence” And “Property Damage” in Comprehensive General Liability Policies in Minnesota; Minnesota Courts’ Interpretation of an “Occurrence” as That Term is Used in Standard CGL Policies; The Definition of an “Accident” as an Element of an Occurrence; to Qualify as an Occurrence An Accident Must Take Place Within the Policy Period and Result in Property Damage or Bodily Injury; To Qualify as an Occurrence, Property Damage or Bodily Injury Resulting from an Accident Must Be Neither Expected Nor Intended; Intentional Acts Exclusions in Minnesota; Defining an “Intentional Act” Under “Normal” Circumstances; Intentional Act Inferred as a Matter of Law; Exceptions to Intentional Acts Exclusion – Cases of Mental Illness and Reflexive or Impulsive, Defensive Reactions; Applicability of Intentional Acts Exclusion by Acts of Agent of Corporation to Corporate Insured

– William P. Harrie

CHAPTER 14

Environmental

Summary of Potential Coverage from Liability Insurance Policies Under Minnesota Law; Bases for Environmental Liability; Comprehensive General Liability Insurance; Property Damage Liability Coverage; Personal Injury Liability Coverage; Defense Coverage; Insolvent Responsible Parties

– Thomas C. Mielenhausen

CHAPTER 15

Select Commercial General Liability Policy Exclusions

Introduction; The Care, Custody or Control Exclusion; The Owned Property Exclusion; The Contractual Liability Exclusion; The Insured’s Work Exclusion; The Insured’s Products Exclusion; The “Sister Ship” and “Product Recall” Exclusions

– John D. Kelly, Kenneth A. Kimber and Nora C. Sandstad

CHAPTER 16

Automobile Liability Coverage

Requirement of Automobile Liability Coverage; Who is an Owner for Purposes of Liability Coverage; Who is Insured Under the Liability Coverage; What Vehicles are Covered Under Liability Coverage; Exclusions from Coverage; Overlapping Coverages; Factors Triggering Reduction or Cancellation of Liability Coverage

– Wil Fluegel

CHAPTER 17

Uninsured Motorist and Underinsured Motorist Coverage

History of Uninsured Motorist Statutes; Overview: Prerequisites for a UM Claim; What is an Uninsured Motor Vehicle?; Identifying the UM Coverage; Limitations on UM Coverage; Asserting UM Claims; Asserting UM Claims: Multiple Defendants; Amount of UM Recovery; Statute of Limitations for UM Claims; Other Issues; UIM Statutory Background; What is an Underinsured Motor Vehicle?; Exclusions; UIM Priorities: Which Company Pays?; The Amount of UIM Coverage; First Step in UIM Claim: Resolve the Liability Claim; Options if UIM Insurer Substitutes Draft; Amount of UIM Claim; Multiple Parties; UIM Insurer’s Right of Recovery; Statute of Limitations; Effect of UIM Payment on Subsequent No-Fault Claims

– Andrew J. Rorvig and Cyndi L. Blume

CHAPTER 18

Insurance Coverage for Employment Claims

The Coverage Analysis; Liability Insurance; Other Business Insurance Policies; Personal Lines Insurance Policies; Typical Employment Claims Analyzed

– Timothy P. Tobin

CHAPTER 19

Professional Liability Claims-Made Coverage

Background; Enforcement of the Claims-Made Form; Enforcement of Specific Claims-Made Policy Provisions; Advantages of the Claims-Made Form

– Timothy J. Gephart

CHAPTER 20

Workers’ Compensation

Introduction to Workers’ Compensation; Compensable Injuries; Legal Requirements for Compensability; Duty to Insure; Covered Employee/Excluded Employments; Benefits Overview; Procedural Overview; Civil Actions Involving Workers’ Compensation

– Barbara Heck

CHAPTER 21

Advertising Injury

Introduction; Brief History of Advertising Injury Coverage; Policy Provisions; Duty to Defend; Conclusion

– Charles E. Spevacek and Perssis Meshkat

CHAPTER 22

Ethical Considerations

Introduction; One Client or Two; Conflict Of Interest Issues; Amendments to the Minnesota Rules of Professional Conduct; Conclusion

– Joshua H. Brand

CHAPTER 23

Directors and Officers Liability Insurance

Introduction; Types of Coverage in D&O Liability Insurance Policies; The Insurer’s Defense Obligation; Claims Covered by D&O Liability Insurance Policies; Exclusions; Insurer’s Rights to Rescind Based Upon Material Misrepresentations and Omissions in the Application; Allocation of Settlement and Defense Costs; D&O Policies and/or Proceeds as Property; Tips for D&O Litigation

– Gary J. Haugen, Margo S. Brownell and Joseph P. Ceronsky

CHAPTER 24

Construction Litigation Coverage

Introduction; The CGL Policy Terms; Policy Analysis; Recapping Third-Party Liability Coverage; Trigger and Allocation and Coverage for Indemnity Agreements

– Timothy P. Tobin and Jeanne H. Unger

CHAPTER 25

Agent and Broker Liability

Introduction; Agent, Broker or Both; Scope of Authority; Liability of Agents and Brokers; Measure of Damages for Agent and Broker Liability

– Jason M. Hill

Index

Statutes and Regulations; Cases; Subject Index