CALL FOR A FREE INITIAL PHONE CONSULTATION
480.874.2918
FREE INITIAL CONSULTATION
GET A REDUCED RATE
BY USING THE FORM BELOW
Note: All fields are required.

 I have read and understand the Disclaimer.

from our blog


August 29, 2017

The Insurance Industry Quick-Hit Settlement

If you’ve been in a collision and it was someone else’s fault, odds are very good that you will hear from the at-fault driver’s insurance company as soon as possible. It’s a tactic that is happening more and more in Arizona. This is done for a variety of reasons: (1) the insurance company would like […]

 

Duty to Indemnify for Economic Losses in Commerical Insurance

Commercial General Liability or General Commercial Liability (“CGL” or “GCL” respectively) insurance is designed to protect businesses from a wide range of risks that could potentially threaten a company’s survival. One common area of dispute between insurers and insurance consumers in these kinds of agreements is whether purely economic risks are covered. In Desert Mountain Properties Limited Partnership v. Liberty Mutual Fire Insurance Company (2011) the Arizona Supreme Court confirmed the Court of Appeals’ decision and upheld that the CGL can also extend to cover only economic losses.

The Court in Desert Mountain noted that although breach of contract is not typically the kind of risk considered when people think of general accidents that can occur to businesses, it is not proper to simply make breach of contract categorically different from the types of damages included in the CGL without the parties expressly agreeing to such a result. Essentially the court allowed purely economic losses to be covered by CGL policies absent an express provision to the contrary. The Court reviewed whether the developer’s liability to homeowners were purely economic and found that it did not matter whether the loss was simply economic or otherwise as long as it was covered by the terms of the CGL.

Additionally, the court reaffirmed the rule that an obligation to pay damages does not arise only from the filing of a civil lawsuit for the purposes of insurance indemnification (reimbursement) to the policyholder. The duty to pay is extendable to any obligation whether it is created by statute, other law, or contract.  This means that when an insured undertakes voluntary expenses to repair property damages that the insurer is obligated to pay for, the insured will not be later punished by having to absorb the costs.

 

Comments Off on Duty to Indemnify for Economic Losses in Commerical Insurance

Comments are closed.

  • Shane Harward Law Offices of Shane L. Harward PLC

    10575 North 114th Street
    Suite 103
    Scottsdale, Arizona 85259

    Telephone 480-874-2918
    Facsimile 480-588-5063

    By Appointment Only:
    4809 East Thistle Landing Drive
    Suite 100
    Phoenix, Arizona 85044

    Telephone 602-384-4638

    Mailing Address:
    Post Office Box 12877
    Scottsdale, Arizona 85267