Supreme Court Addresses Cooperation Clause
In Chandler v. Concord Insurance Group, No. 2015–236 (Vt. Oct. 1, 2015), the Vermont high court held that a liability insurer was relieved of its obligations, for a slip and fall claim, because its insured breached the cooperation cause. However, the breach was so egregious that the case’s value is diminished for both sides looking for guidance. Nonetheless, when a Supreme Court addresses a coverage issue it is always good to take notice. The court held: “On the basis of these facts, we conclude that Chandler forfeited his coverage under the Concord policy by failing to comply with the cooperation requirement. The cooperation clause protects the insurer by obligating the insured not to intentionally and deliberately take any action which would substantially affect adversely the insurer’s defense, settlement or other handling of the claim. Where an insured enters into a settlement with the injured party without the prior approval of the insurer, the company is under no obligation to contribute to the settlement. Chandler’s act of admitting liability and entering into a settlement with Ainsworth in the personal injury suit before Concord had completed its investigation and before it had made a determination on coverage denied Concord the opportunity to investigate facts applicable to the lawsuit and to dispute them before trial, causing prejudice by placing Concord “in a substantially less favorable position than it would have been had the insured fully cooperated.” (citations and internal quotes omitted). Not to mention, the court pointed to several other things that Chandler did to stymie the insurer’s investigation.

Two Supreme Courts -- On The Same Day -- Agree To Address Construction Defect Coverage Issues
Columbia Ins. Group v. Cenark Project Management Services, Inc., No. 15-804 (Ark. Oct. 29, 2015) (“Having reviewed the certifying court’s explanation of the need for this court to answer the question of law pending in that court, we accept certification of the following questions: 1. Whether faulty workmanship resulting in property damage to the work or work product of a third party (as opposed to the work or work product of the insured) constitutes an “occurrence”; and 2. If such faulty workmanship constitutes an “occurrence,” and an action is brought in contract for property damage to the work or work product of a third person, does any exclusion in the policy bar coverage for this property damage?”)

Cypress Point Condominium Association Inc. v. Adria Towers Inc., No. 76348 (N.J. Oct. 29, 2015) (granting certification where the Appellate Division held that “the unintended and unexpected consequential damages caused by the subcontractors’ defective work constitute ‘property damage’ and an ‘occurrence’ under the policy. We base this holding in part on the developer’s reasonable expectation that, for insurance risk purposes, the subcontractors’ faulty workmanship is to be treated differently than the work of a general contractor. We reach that conclusion by viewing the policy as a whole and distinguishing Weedo v. Stone–E–Brick, Inc., 81 N.J. 233, 405 A.2d 788 (1979), and Firemen's Insurance Co. of Newark v. National Union Fire Insurance Co., 387 N.J.Super. 434, 904 A.2d 754 (App. Div.2006), two opinions construing ISO’s 1973 standard CGL form.”)