Welcome to the 18th annual look back at the year’s ten most significant liability insurance coverage decisions. Wow! My little-engine-that-could insurance coverage Top 10 list has turned 18!
But just because the Top 10 list can now vote does not mean that any votes were taken when making the selections. That process remains a one-man show, devoid of input from others, accountability or checks and balances. It is highly subjective and not the least bit scientific. But none of this is to say that the selection process is willy-nilly. To the contrary, it is very deliberate and involves a lot of analysis, balancing, hand-wringing and tossing and turning at night. It’s just that only one person is doing any of this.
As for the selection process, it goes throughout the year to identify coverage decisions (usually, but not always, from state high courts; less so this year) that (i) involve a frequently occurring claim scenario that has not been the subject of many, or clear-cut, decisions; (ii) alter a previously held view on an issue; (iii) are part of a new trend; (iv) involve a burgeoning or novel issue; or (v) provide a novel policy interpretation. Some of these criteria overlap. Admittedly, there is also an element of “I know one when I see one” in the process. In addition, cases that meet the selection criteria are usually (but not always) not included when the decision is appealed. In such situation, the ultimate significance of the case is up in the air.
In general, the most important consideration for selecting a case as one of the year’s ten most significant is its potential ability to influence other courts nationally. Many courts in coverage cases have no qualms about seeking guidance from case law outside their borders. In fact, it is routine--especially so when in-state guidance is lacking. The selection criteria operates to identify the ten cases most likely to be looked at by courts on a national scale and influence their decisions.
That being said, the most common reason why many unquestionably important decisions are not selected is because other states do not need guidance on the particular issue, or the decision is tied to something unique about the particular state. Therefore, a decision that may be hugely important for its own state – indeed, it may even be themost important decision of the year for that state – nonetheless will be passed over, as one of the year’s ten most significant, if it has little chance of being called upon by other states at a later time.
For example, consider a state high court that issues its first decision addressing the scope of the pollution exclusion. The case answers whether the pollution exclusion should be interpreted broadly, applying to all hazardous substances, or narrowly, applying solely to so-called traditional environmental pollution. This would be a very significant decision for that state. However, given the enormous body of case law nationally, addressing the pollution exclusion, such a decision would be very unlikely to have any influence nationally. It would be just one decision in an ocean of many on the issue.
For an actual example, in 2018, the Kentucky Supreme Court held in Martin v. Acuity that no coverage was owed to a contractor for faulty workmanship, including, notably, consequential damages caused by its faulty workmanship. Such damages were not caused by an accident/occurrence as the court saw it. The decision is most certainly of significance (hugely, in fact) for contractors in Kentucky. However, given that coverage for construction defects is so well-developed nationally, courts outside the Bluegrass State are unlikely to be influenced by it. Thus, Martin v. Acuity was not included as one of the year’s ten most significant.
If you think I missed a case, tell me. I’ll be the first to admit that I goofed (and I have). It is impossible to be aware of every coverage case decided nationally.
Best wishes for a healthy and prosperous 2019 and may any resolutions that you make last at least until February.
The year’s ten most significant insurance coverage decisions are listed in the order that they were decided.