A football field has only four corners. But, what if you compare two different fields? Now, you have eight corners. In this short example, a Virginia federal court compared only two documents, each with four corners, to decide an insurer had no duty to defend its insured.
A supplier/insured provided a chiller unit to a prime contractor. When the unit didn’t perform as expected, the prime sued the supplier/insured who then, in turn, sought defense and indemnity from the insurer. The court needed only two documents to support its conclusion:
(1) the complaint by prime against supplier/insured and
(2) the insurance policy between insurer and supplier/insured.
(Together, the four corners of each document totaled eight corners.)
To decide if an insurer has a duty to defend, a Virginia State or Federal Court may only look at the allegations in the complaint and the insurance policy to determine if a judgment against the insured will be covered by the policy. If there is a possibility of coverage, then the insurer must defend the insured.
Western World Ins. Co. v. Air Tech, Inc., Case No. 7:17-cv-518 (March 29, 2019)
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If all apples are fruit, then why are all fruit not apples?
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I promise that any disputes between us will be argued at your house. Time passes and a dispute begins to brew. Now, I want to argue at my house, not at yours. You pay costs to argue at my house that you wouldn’t have incurred had I done as agreed. Should I have to reimburse your costs?
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Prime Government Contractors - you may need to update your interim payment waivers.
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