Insurance coverage

New York Insurance Coverage Law Update – January 2022 | Rivkin Radler LLP

New York enacts full insurance disclosure law

On December 31, 2021, New York Governor Hochul signed into law the Comprehensive Insurance Disclosure Act, which requires defendants, third-party defendants, and counterclaim and counterclaim defendants (the “Disclosure Party”) to produce copies of all primary documents, umbrella and excess insurance policies that may satisfy all or part of a judgment (and certain other insurance information) within 60 days of response. Any information required by law that was not previously provided in pending cases must be provided no later than March 1, 2022. In addition to policies, the producing party must produce requests, contact information for responsible person(s) of the settlement of the claim, the amounts currently available under the policies and certain information on the erosion of limits. The disclosing party and its attorney must certify the accuracy of the information provided, and the disclosing party is required to use reasonable efforts to update the information within 30 days of receipt of information that makes the prior disclosure inaccurate or incomplete in any way. or in part. Details of the current obligations of the Act can be found at The New York State Legislature is considering an amendment that may restrict the disclosing party’s obligations under the law, which can be found at

Second Circuit argues that business losses related to Covid-19 are not covered

10012 Holdings, Inc. d/b/a Guy Hepner suspended operations of his art gallery to comply with government restrictions on non-essential businesses due to the COVID-19 pandemic, then applied for coverage for his commercial losses under its commercial property insurance policy with Sentinel Insurance Company. Sentinel declined coverage because the insured did not suffer direct physical loss or damage to property or nearby property as required by the policy. The insured argued that the policy’s reference to “physical damage” or “physical loss” included loss of use of property resulting from suspension of business, but the United States Court of Appeals for the second circuit disagreed. In concluding that the insured could not recover under its policy, the court pointed out that New York courts applying New York law had “strongly rejected the argument that business closures…due to the executive orders of the State of New York constitute physical loss or damage to property”. [10012 Holdings, Inc. v. Sentinel Ins. Co., 2021 U.S. App. LEXIS 38270 (2d Cir. Dec. 27, 2021).]

The Second Circuit finds that the liability limits in the optional reinsurance certificates did not cap the reinsurer’s obligation to pay defense costs

Global Reinsurance has issued Certificates of Facultative Reinsurance to Century Indemnity pursuant to which Global has agreed to indemnify Century for losses and litigation costs that Century may incur under commercial liability policies issued by Century to Caterpillar Tractor Company. Century requested reinsurance payments from Global for amounts paid by Century under Caterpillar’s policies, and Global requested a statement that the certificates of reinsurance policy limits capped Global’s reinsurance obligations with respect to both compensation and defense costs. By way of certification, the Second Circuit asked the New York Court of Appeals whether “New York law imposes a rule of construction or a strong presumption that the limit of liability of a certificate of reinsurance caps the liability of the reinsurer with respect to both indemnity and defense costs, that the underlying policy is intended to cover defense costs beyond the limit of liability of the policy”, and the Court of call from New York answered “no”. On remand, the district court held that the certificates of reinsurance did not cap Global’s obligation to pay its proportionate share of Century’s defense costs, and the Second Circuit upheld. The Second Circuit explained that its decision was based on the unambiguous “tracing form” clauses in the certificates of reinsurance, which subjected Global’s reinsurance to the same terms and conditions as the underlying Century policies, as well as on the testimony of Century’s experts confirming that a strong presumption of competition prevailed in the reinsurance market at the time the certificates were issued. [Global Reins. Corp. of Am. v. Century Indem. Co., 2021 U.S. App. LEXIS 38397 (2d Cir. Dec. 28, 2021).]