Insurance Broker Negligence Ca Statute of Limitations - PDF by evc37479

VIEWS: 352 PAGES: 89

More Info
									Table of Contents
CHAPTER 1. ADDITIONAL INSUREDS
A.      BACKGROUND
§ 1:1      Background
§ 1:1.1    Loss of additional insured status upon dissolution of marriage
§ 1:1.2    Duty to defend
§ 1:1.3    Who qualiŽes as an additional insured
§ 1:1.4    Notice requirements

B.      INDEMNITY
§ 1:2      Eect of indemnity agreement between additional insured
            and named insured on resolution of other insurance
            problems
§ 1:2.1    California's Anti-indemnity Statute does not aect scope of
            coverage under to additional insured endorsement
§ 1:2.2    Eect of indemnity and insurance procurement agreements
            on interpretation of additional insured endorsement

C.      RESCISSION
§ 1:3     Rescission and reformation

D.      EXTRACONTRACTUAL REMEDIES
§ 1:4     Extracontractual remedies

E.      SUBROGATION AGAINST
§ 1:5     Subrogation against

CHAPTER 2. ADVANCE PAYMENTS
§ 2:1     Insurer's right to deduct from settlement
§ 2:2     Insurer's duty to make advance payments
§ 2:3     Insurer's duty to notify recipient of applicable statute of
           limitations

CHAPTER 3. ADVERTISING LITERATURE
§ 3:1     Eect on coverage
§ 3:2     Liability for misleading sales literature
                                                                        xxv
                                  California Insurance Law Handbook

CHAPTER 4. AGENTS AND BROKERS
A.      BACKGROUND
§ 4:1      Compared and contrasted
§ 4:1.1    Surplus lines brokers
§ 4:1.2    Authority to act on insurer's behalf
§ 4:1.3    Binders and oral contract of insurance
§ 4:1.4    Comparative fault of agent or broker with insurer

B.      DUTIES OF AGENTS AND BROKERS
§ 4:2       Duty to advise about adequacy and scope of coverage
§ 4:2.1     Insurer liability for agent's failure to advise about adequacy
             and scope of coverage
§ 4:2.2     Liability to insured for misrepresentation
§ 4:2.3     Liability to insured for intentional misrepresentations
§ 4:2.4     Finding of coverage does not preclude recovery from broker
§ 4:3       Duty to advise insured about cancellation and renewal of
             policies
§ 4:4       Liability for failure to obtain coverage requested
§ 4:5       Duty to insured to investigate insurer's Žnancial strength
             when insurer is not admitted in California
§ 4:6       Duty to insured to investigate insurer's Žnancial strength
             when insurer is admitted in California
§ 4:7       Duties to third party beneŽciaries of contract to procure
             insurance
§ 4:8       Duties to insurer
§ 4:9       Duties to public
§ 4:10      Enforceability of no–personal–liability settlement in action
             against insurance broker
§ 4:11      Licensing
§ 4:12      Federal preemption of claims against agents and brokers
§ 4:13      Insurer's vicarious liability for tortious acts of agents and
             brokers
§ 4:13.1    Insurer's right to indemnity from agent
§ 4:14      Estoppel of insurer to deny coverage based on
             representations of agent
§ 4:14.1    Broker's right to equitable indemnity

C.      STATUTE OF LIMITATIONS
§ 4:15     Statute of limitations on professional negligence actions
            against agents & brokers



xxvi
Table of Contents

CHAPTER 5. AMERICANS WITH
DISABILITIES ACT (ADA) AND INSURANCE
A.      INTRODUCTION, ADA
§ 5:1     Introduction
§ 5:1.1   Title I of the ADA
§ 5:1.2   Standing
§ 5:1.3   Insurer liability under Title I
§ 5:1.4   Title III
§ 5:1.5   The ADA's safe harbor provision

B.      ELEMENTS OF AN ADA ACTION BASED ON
        DISCRIMINATORY INSURANCE PRACTICES
§ 5:2     Condition for which coverage is denied must be a disability
§ 5:2.1   Policy provision or underwriting decision must make a
           disability–based distinction
§ 5:2.2   Policy provision or underwriting decision must constitute a
           subterfuge to evade the purposes of ADA

CHAPTER 6. ANTITRUST
A.      FEDERAL ANTITRUST
§ 6:1     Federal antitrust laws
§ 6:1.1   McCarran-Ferguson Act's immunity for “business of
           insurance”
§ 6:1.2   Eect of conspiracies with foreign insurers
§ 6:1.3   “Boycott” exemption from McCarran-Ferguson immunity
§ 6:1.4   Foreign insurers

B.      CALIFORNIA ANTITRUST LAWS
§ 6:2     California antitrust laws
§ 6:2.1   Unfair Insurance Practices Act: Insurance Code § 790.03(c)
§ 6:2.2   Cartwright Act: Business and Professions Code §§ 16700 et
           seq
§ 6:2.3   Unfair Competition Act: Business and Professions Code
           § 17200
§ 6:2.4   Common Law Doctrine of Fair Procedure

CHAPTER 7. ATTORNEY FEES
A.      ARBITRATION OF FEE DISPUTES UNDER
        CIVIL CODE § 2860
§ 7:1     Scope of arbitration under Civil Code § 2860



                                                                   xxvii
                                  California Insurance Law Handbook

§ 7:1.1    Applicability to insurer/insurer fee disputes

B.       ATTORNEY FEES, COVERAGE FOR
§ 7:2     Attorney fees awarded against the insured

C.       ATTORNEY FEES, ELEMENTS OF DAMAGES
§ 7:3      Insured's right to recover attorney fees as an element of
            damages
§ 7:3.1    Insured's right to recover attorney fees incurred in defending
            insurer's appeal
§ 7:3.2    Insured's right to recover in declaratory relief action
§ 7:3.3    Assignee's right to recover
§ 7:3.4    Apportioning fees between contract and tort claims
§ 7:4      Third–party claimant's right to recover as element of damages
§ 7:5      Insurer's right to recover attorney fees as element of damages
§ 7:6      Eect of assertion of attorney–client privilege on right to
            recover attorney fees
§ 7:7      Subrogation, common fund doctrine
§ 7:8      Insured's right to recover under private attorney general
            doctrine

CHAPTER 8. AUTOMOBILE INSURANCE
A.       INTRODUCTION
§ 8:1     Introduction

B.       ALLOCATION OF COVERAGE AMONG
         MULTIPLE INSURERS
§ 8:2      Statutory presumptions [Insurance Code §§ 11580.8 and
            11580.9]
§ 8:2.1    Prerequisites to applying Insurance Code §§ 11580.8 and
            11580.9
§ 8:2.2    Named insured is in business of selling, servicing, parking or
            storing motor vehicles [Insurance Code § 11580.9(a)]
§ 8:2.3    Named insured is engaged in business of renting or leasing
            motor vehicles [Insurance Code § 11580.9(b)]
§ 8:2.4    Accident occurs during loading or unloading
§ 8:2.5    The accident vehicle is “described or rated as an owned
            vehicle”
§ 8:3      Allocation of defense costs
§ 8:4      Agreement to modify statutory presumption
§ 8:5      Allocation of coverage when statutory presumptions do not
            apply



xxviii
Table of Contents

§ 8:6      Automatic termination provision

C.      AUTOMOBILES INSURED
§ 8:7       DeŽnition of automobile
§ 8:8       Additional insured automobile
§ 8:9       Newly acquired automobile
§ 8:10      Temporary substitute vehicle
§ 8:11      Hired automobile
§ 8:12      Non–owned vehicles
§ 8:12.1    Burden of proof
§ 8:12.2    Exclusion for autos “used in any other business or
             occupation”
§ 8:13      Regular use exception
§ 8:14      Permissive use requirement
§ 8:15      Borrowed vehicles
§ 8:16      “Any auto”

D.      CALIFORNIA AUTOMOBILE ASSIGNED RISK
        PLAN (CAARP)
§ 8:17     Purpose and scope
§ 8:18     Operation of CAARP
§ 8:19     Interpretation of CAARP policies
§ 8:20     Duty of insurers to accept assignments

E.      RATES
§ 8:21      Procedures
§ 8:21.1    Exhaustion of administrative remedies
§ 8:22      Substantive requirements
§ 8:23      CAARP liability to third–parties for insuring incompetent
             drivers

F.      CANCELLATION
§ 8:24      Cancellation
§ 8:24.1    Automatic termination provision
§ 8:24.2    Premium Žnance company's right to cancel
§ 8:24.3    Notice to additional insureds

G.      COMMON CARRIER INSURANCE
§ 8:25      Common carrier insurance
§ 8:25.1    Cancellation
§ 8:25.2    Lapse of coverage
§ 8:25.3    Notice of claims: Interstate Commerce Commission
             regulations



                                                                    xxix
                                   California Insurance Law Handbook

H.    PUBLIC UTILITIES COMMISSION (PUC)—
      MANDATED COVERAGE
§ 8:26     Scope
§ 8:27     Permissible exclusions
§ 8:28     Cancellation
§ 8:29     Other insurance issues
§ 8:30     Interstate Commerce Commission (ICC)—Mandated coverage

I.    DUTY OF LENDERS
§ 8:31     Duty of lenders Žnancing purchase of automobile to procure
            insurance

J.    EXCLUSIONS
§ 8:32      Exclusions
§ 8:32.1    Driver exclusion
§ 8:32.2    Driver exclusion: Persons to whom excluded driver entrusts
             vehicle
§ 8:32.3    Class of drivers or persons
§ 8:32.4    Drunk driving exclusion
§ 8:32.5    Employee exclusion
§ 8:32.6    Scope of employment while operating commercial vehicle
§ 8:33      Liability to another insured or family member: Validity
§ 8:33.1    Injuries to passengers
§ 8:33.2    Residents and family members
§ 8:33.3    Cross complaints for contribution and indemnity
§ 8:33.4    Wrongful death claims
§ 8:34      Intentional acts
§ 8:35      O road vehicles
§ 8:36      Other owned vehicle
§ 8:37      Property in care, custody, and control
§ 8:38      Public livery: Carrying persons or property for fee
§ 8:39      Workers' compensation exclusion

K.    FINANCIAL RESPONSIBILITY LAW
§ 8:40     Financial responsibility law: Constitutional validity
§ 8:41     Financial responsibility law: Insurer's duty to certify
            compliance

L.    INSURABLE INTEREST
§ 8:42     Insurable interest

M.       INSURING AGREEMENT
§ 8:43      Insuring agreement



xxx
Table of Contents

§ 8:43.1    Accident requirement
§ 8:43.2    Bodily injury and property damage
§ 8:44      Causal connection between injury and maintenance or use of
             vehicle
§ 8:44.1    Negligent entrustment and negligent supervision claims
§ 8:44.2    Ownership
§ 8:44.3    Maintenance
§ 8:44.4    Use
§ 8:44.5    Use: Loading and unloading

N.   MEXICAN POLICIES
§ 8:45     Mexican policies

O.   OFFSETS
§ 8:46     Osets: Reduction of liability insurance payments by amount
            of uninsured motorist coverage payments

P.   PERSONS AND ENTITIES INSURED
§ 8:47     Residents of named insured's household
§ 8:48     Commercial policies
§ 8:49     Insured's employer
§ 8:50     Persons occupying insured vehicle

Q.   PERMISSIVE USERS
§ 8:51      Scope of permission
§ 8:52      Who may give permission
§ 8:53      Collateral estoppel eect of underlying liability litigation
§ 8:54      Extra-contractual remedies
§ 8:55      Statutory framework for coverage of permissive users
§ 8:55.1    Statutory requirements for coverage of permissive users

R.   EXCEPTIONS TO STATUTORY REQUIREMENT
     OF COVERAGE FOR PERMISSIVE USERS
§ 8:56     Policy limits exceeding statutory minimum
§ 8:57     Incidental automobile coverage
§ 8:58     Excess insurance
§ 8:59     Self–insurance
§ 8:60     Insureds in automobile business
§ 8:61     Nonowned vehicles
§ 8:62     Designated driver exclusion

S.   POLICY LIMITS
§ 8:63     Per person versus per accident



                                                                           xxxi
                                     California Insurance Law Handbook

§ 8:64     Multiple vehicle accidents or occurrences

T.      RENEWALS
§ 8:65      Agent's authority
§ 8:66      Automatic renewals
§ 8:67      Insurer's duty to provide notice of nonrenewal
§ 8:68      Insurer's duty to notify regulators of nonrenewal
§ 8:69      Statutory restrictions on renewals and cancellations
§ 8:69.1    Local government restrictions on renewals and cancellations
§ 8:70      Lapse of coverage due to nonpayment of premium
§ 8:70.1    Eect of requirement that insurer notify government
             regulator of nonrenewal

U.      RENTAL AGREEMENTS
§ 8:71     Rental agreements

V.      REFORMATION
§ 8:72      Reformation
§ 8:72.1    Rights of third–parties

W.       RESCISSION
§ 8:73     Grounds
§ 8:74     Rights of third–parties

X.      SELF–INSURANCE
§ 8:75     Self–insurance

Y.      TERRITORIAL LIMITATION
§ 8:76     Territorial limitation

CHAPTER 9. AUTOMOBILE INSURANCE,
FIRST–PARTY COVERAGE
A.      MEDICAL PAYMENTS
§ 9:1      Eligibility
§ 9:1.1    Eect of other sources of insurance
§ 9:1.2    Eect of other sources of insurance on excess insurer's duty to
            pay
§ 9:1.3    Reimbursement provisions
§ 9:1.4    Attorney liability for failure to disburse funds to insurer
§ 9:1.5    Insurer liability for failure to disburse funds to hospital



xxxii
Table of Contents

B.      PERSONS AND ENTITIES INSURED
§ 9:2     Persons and entities insured

C.      PHYSICAL DAMAGE COVERAGE
§ 9:3      Collision coverage
§ 9:3.1    Measure of damages
§ 9:3.2    Appraisal rights: Duty to advise

D.      THEFT COVERAGE
§ 9:4     Theft coverage

CHAPTER 10. AUTOMOBILE INSURANCE,
UNINSURED/UNDERINSURED MOTORIST
COVERAGE
A.      BACKGROUND
§ 10:1     Background

B.      ARBITRATION
§ 10:2      Scope of arbitration
§ 10:2.1    Arbitrator need only decide issues necessary to resolution of
             uninsured motorist claim
§ 10:2.2    Arbitration applies only to insured—Insurer disputes
§ 10:2.3    Arbitrator may not decide bad faith issues
§ 10:3      Selection of arbitrators
§ 10:4      Costs are not recoverable
§ 10:4.1    Recovery of costs pursuant to Code of Civil Procedure § 998
§ 10:4.2    Prejudgment interest
§ 10:5      Stay of arbitration when workers' compensation claim
             pending
§ 10:6      Right to trial de novo
§ 10:7      Statute of limitations on right to seek arbitration
§ 10:7.1    Tolling of 4-year statute of limitations in Code of Civil
             Procedure § 337
§ 10:8      Judicial review of arbitration awards
§ 10:9      Joinder
§ 10:10     Deadline for completion of arbitration

C.      AUTOMOBILE POLICIES REQUIRED TO
        PROVIDE UM/UIM COVERAGE
§ 10:11     Policies issued for car garaged in California



                                                                     xxxiii
                                      California Insurance Law Handbook

§ 10:12     Territorial limitations

D.      AUTOMOBILES TO WHICH UNINSURED
        MOTORIST COVERAGE APPLIES
§ 10:13     Automobiles to which uninsured motorist coverage applies:
             “insured motor vehicle”
§ 10:14     Automobile policies exempt from UM/UIM coverage
             requirement

E.      CONDITIONS TO ACCRUAL OF CAUSE OF
        ACTION
§ 10:15      Conditions to accrual of cause of action for uninsured
              motorist coverage: Insurance Code § 11580.2(i)
§ 10:15.1    Eect of uninsured motorist carrier's insolvency
§ 10:15.2    Cases strictly construing Insurance Code § 11580.2(i)'s
              limitations period
§ 10:15.3    Cases strictly construing Insurance Code § 11580.2(i)'s
              limitations period: Insurance Code § 11580.2(k)'s
              requirement of notice to insured of impending expiration
              of Insurance Code § 11580.2(i)'s limitation period

F.      UNDERINSURED MOTORISTS
§ 10:16     Conditions to accrual of cause of action for underinsured
             motorist beneŽts

G.      DAMAGES RECOVERABLE, CONTRACTUAL
        LIABILITY
§ 10:17     Bodily injury
§ 10:18     Property damage

H.      DAMAGES, RECOVERABLE, EXTRA-
        CONTRACTUAL
§ 10:19      Damages, extra-contractual liability
§ 10:19.1    Extra-contractual damages for failure to advise

I.   EXCLUSIONS
§ 10:20      Settlement or judgment without insurer's consent:
              Insurance Code § 11580.2(c)(3)
§ 10:20.1    Uninsured motorist coverage
§ 10:20.2    Underinsured motorist coverage
§ 10:21      Other owned vehicle: Insurance Code §§ 11580.2(b)(2),
              11580.2(c)(7)



xxxiv
Table of Contents

§ 10:22      Occupying vehicle owned by insured or leased by insured
              for at least 6 months which is not insured vehicle
§ 10:22.1    Enforceability
§ 10:22.2    Eect of dierence in policy limits
§ 10:22.3    Uninsured motorist coverage eliminated due to oset
§ 10:22.4    Nonhighway vehicles

J.   ILLUSORY COVERAGE
§ 10:24     Underinsured motorist coverage equal to minimum liability
             limits
§ 10:25     Corporate insureds

K.   INSURED PERSONS
§ 10:26     Insurance Code § 11580.2(b)
§ 10:27     Spouse, residents of same household, and relatives
§ 10:28     Occupants of insured vehicle
§ 10:29     Heirs and legal representatives
§ 10:30     Any person entitled to damages for care or loss of services

L.   INSURING AGREEMENT
§ 10:31      Tortfeasor must be owner or operator of uninsured motor
              vehicle
§ 10:31.1    Tortfeasor's insurer is insolvent
§ 10:31.2    Unknown hit and run drivers (physical contact
              requirement)
§ 10:31.3    Requirement that insured report accident
§ 10:32      Statutory exclusions from deŽnition of uninsured motor
              vehicle
§ 10:33      Underinsured motor vehicle
§ 10:34      Requirement that accident arise out of maintenance,
              operation, and use of uninsured vehicle
§ 10:35      Requirement that insured be legally entitled to recover
              from uninsured motorist: Insurance Code § 11580.2(a)(1)

M.   OFFSETS AGAINST COVERAGE
§ 10:36      Osets against coverage
§ 10:36.1    Workers' compensation
§ 10:36.2    Amounts recovered under policy's liability coverage
§ 10:36.3    Medical payments

N.   OFFSETS APPLICABLE TO UNDERINSURED
     MOTORIST COVERAGE
§ 10:37     Underinsured motorist's policy limits



                                                                      xxxv
                                      California Insurance Law Handbook

§ 10:38     Workers' compensation
§ 10:39     Impermissible osets of uninsured motorist coverage against
             other coverage
§ 10:40     Bad faith assertion of oset

O.      LIABILITY TO UNINSURED MOTORIST
§ 10:41     Reduction in liability to uninsured motorist
§ 10:42     Reduction in recovery from concurrent tortfeasors

P.      POLICY LIMITS
§ 10:43      Stacking of multiple coverages: Insurance Code
              §§ 11580.2(q) and 11580.2(d)
§ 10:43.1    Stacking of multiple coverages issued by same insurer
§ 10:43.2    Stacking of multiple coverages issued by same insurer:
              stacking of underinsured and uninsured motorist coverage
              issued by same insurer
§ 10:43.3    Stacking of multiple coverages issued by same insurer:
              sacking of uninsured motorist and liability coverages
              issued by same insurer
§ 10:43.4    Stacking of multiple coverages issued by same insurer:
              stacking of underinsured motorist and liability coverages
              in same policy
§ 10:43.5    Stacking of multiple policies issued by dierent insurers:
              what constitutes other “similar” insurance?
§ 10:43.6    Stacking of policy limits when accident involves multiple
              uninsured motorists
§ 10:44      Underinsured motorist coverage limits

Q.      SUBROGATION
§ 10:45      Subrogation
§ 10:45.1    Underinsured motorist carriers have no subrogation rights
§ 10:45.2    Subrogation against insolvent liability insurer
§ 10:45.3    Requirement that insured be fully compensated
§ 10:45.4    Three-year statute of limitations: Insurance Code
              § 11580.2(g)
§ 10:45.5    Three-year statute of limitations: Insurance Code
              § 11580.2(g): time limits on suits against government
              entities

R.      IN GENERAL
§ 10:46     Territorial limitations
§ 10:47     Waiver of coverage



xxxvi
Table of Contents

CHAPTER 11. BAD FAITH: COVENANT OF
GOOD FAITH AND FAIR DEALINGS
A.   BACKGROUND
§ 11:1     Background and introduction

B.   ASSIGNMENTS
§ 11:2      Assignments
§ 11:2.1    By operation of law
§ 11:2.2    Anti-assignment clauses and their enforceability
§ 11:2.3    “Purely personal” damages are not assignable
§ 11:2.4    “Purely personal” damages are not assignable: rule against
             splitting causes of action
§ 11:2.5    Eect of no personal liability settlements on validity of
             assignment

C.   DAMAGES, GENERALLY
§ 11:3        Tort damages v. Contract damages
§ 11:4        Insured's duty to mitigate
§ 11:5        Collateral source rule
§ 11:6        Insured's right to recover attorneys' fees in bad faith
               action
§ 11:6.1      Insured's right to recover attorney fees incurred in
               defending insurer's appeal
§ 11:6.2      Insured's right to recover in declaratory relief action
§ 11:6.3      Assignee's right to recover
§ 11:6.4      Third-party claimant's right to recover
§ 11:6.5      Insurer's right to recover
§ 11:6.6      Apportioning fees between contract and tort claims
§ 11:6.7      Apportioning damages between contract and tort claims
               when attorney represents plainti under contingency fee
               agreement
§ 11:6.8      Eect of assertion of attorney-client privilege on right to
               recover attorney fees
§ 11:7        Emotional distress
§ 11:7.1      Severity of emotional distress
§ 11:7.2      Pleading and proof of emotional distress damages
§ 11:7.3      Pleading and proof of emotional distress damage: eect of
               recovery from collateral source
§ 11:7.4      Economic loss as a condition to recovery of emotional
               distress damages
§ 11:8        Financial harm
§ 11:8.1      Lost earnings



                                                                    xxxvii
                                California Insurance Law Handbook

§ 11:8.2     Lost earnings: ination factor
§ 11:8.3     Loss of credit and good will
§ 11:8.4     Bankruptcy
§ 11:8.5     Cost of borrowing
§ 11:8.6     Loss of equity
§ 11:8.7     Loss of future appreciation
§ 11:8.8     Increased premiums or loss of dividends
§ 11:8.9     Eect of credit bid rule on loss payee lender's recovery for
              bad faith
§ 11:9       Future harm
§ 11:10      Physical injuries
§ 11:11      Wrongful death
§ 11:12      Damages for failure to settle—Liability for excess
              judgment
§ 11:12.1    Insured need not pay judgment
§ 11:12.2    Eect of insured's insolvency on insurer's liability for
              excess judgment
§ 11:12.3    Eect of excess insurance on primary insurer's liability for
              excess judgment
§ 11:12.4    Insurer's liability for punitive damages awarded against
              insured in underlying action
§ 11:12.5    Insurer's liability for statutory attorney's fees awarded
              against insured in underlying action
§ 11:13      Damages for inadequate defense
§ 11:14      Damages for refusal to defend
§ 11:14.1    Excess judgment or settlement
§ 11:14.2    Excess judgement or settlement: California Insurance
              Guarantee Association's liability for settlement within
              statutory limits
§ 11:14.3    Excess judgement or settlement: insured's burden of
              proving damages resulting from failure to defend or from
              inadequate defense
§ 11:14.4    Damages excluded from coverage
§ 11:14.5    Consequential damages
§ 11:14.6    Defense costs
§ 11:14.7    Eect of no policy limits
§ 11:14.8    Eect of insured's insolvency
§ 11:14.9    Eect of defense by other insurers
§ 11:14.10   Loss of right to obtain relief from judgment based on
              “mistake, inadvertence, surprise or excusable neglect”
§ 11:14.11   Compensatory damages for refusal to defend coupled with
              refusal to settle
§ 11:15      Loss of subrogation rights
§ 11:16      Prejudgment interest

D.    PUNITIVE DAMAGES
§ 11:17      Punitive damages



xxxviii
Table of Contents

§ 11:17.1      Proof requirements
§ 11:17.2      Constitutionality: California decisions
§ 11:17.3      Constitutionality: United States Supreme Court decisions
§ 11:17.4      Comparative fault
§ 11:17.5      Statutory standard
§ 11:17.6      Cases addressing liability of insurers for acts of employees
§ 11:17.7      Punitive damages are not recoverable where liability is
                based on estoppel
§ 11:17.8      Threshold requirements
§ 11:17.9      Threshold requirements: oppression cases
§ 11:17.10     Threshold requirements: fraud cases
§ 11:17.11     Threshold requirements: malice cases
§ 11:17.12     Threshold requirements: relevance of policyholder's wealth
§ 11:17.13     Factors aecting amount of punitive damages
§ 11:17.14     Factors aecting amount of punitive damages:
                relationship between punitive damages and
                compensatory damages or potential harm
§ 11:17.15     Factors aecting amount of punitive damages:
                relationship of punitive damages to harm or potential
                harm caused by defendant's conduct
§ 11:17.16     Factors aecting amount of punitive damages:
                reprehensibility of insurer's conduct
§ 11:17.17     Factors aecting amount of punitive damages: insurer's
                wealth
§ 11:17.18     Test of excessiveness
§ 11:17.19     Standard of appellate review
§ 11:18        Insurer's right to recover from insured

E.   ESTOPPEL RESULTING FROM INSURER'S BAD
     FAITH CONDUCT
§ 11:19     Loss of coverage defenses
§ 11:20     Loss of subrogation rights

F.   DEFENSES
§ 11:21        Genuine issue
§ 11:21.1      Absence of coverage
§ 11:21.2      Advice of counsel
§ 11:21.3      Arbitration
§ 11:21.4      Causation
§ 11:21.5      Collateral estoppel and res judicata
§ 11:21.6      Comparative fault
§ 11:21.7      Comparative fault: insured's negligence
§ 11:21.8      Comparative fault: primary/excess insurer disputes
§ 11:21.9      Exhaustion of administrative remedies



                                                                      xxxix
                                  California Insurance Law Handbook

§ 11:21.10    Insured's breach
§ 11:21.11    Insured's breach: insured's failure to cooperate
§ 11:21.12    Contractual limitations periods
§ 11:21.13    Contractual limitations periods: tolling of contractual
               limitations period
§ 11:21.14    Statute of limitations
§ 11:21.15    Statute of limitations: tolling of limitations period
§ 11:21.16    Statute of limitations: commencement of statute
               limitations on claim for policy beneŽts
§ 11:21.17    Statute of limitations: commencement of statute of
               limitations on breach of duty to defend
§ 11:21.18    Statute of limitations: commencement and tolling of
               statute of limitations on claims for bad faith failure to
               settle
§ 11:21.19    Statute of limitations: loss of right to assert limitations
               period through waiver or estoppel, commencement of
               statute of limitations on claims for bad faith failure to
               settle
§ 11:21.20    Employee Retirement Income Security Act of 1974
               (ERISA)
§ 11:21.21    Federal Employee Health BeneŽts Act
§ 11:21.22    National Labor Relations Act
§ 11:21.23    Medicare Act
§ 11:22       Workers' compensation exclusive remedy
§ 11:23       Disability beneŽts exclusive remedy
§ 11:24       Litigation or judicial proceedings privilege: Civil Code
               § 47(b)
§ 11:25       Immunity in connection with fraud reports
§ 11:26       California Insurance Guaranty Association's tort
               immunity: Insurance Code § 1063.12(a)
§ 11:27       Rescission
§ 11:28       Settlement and release
§ 11:28.1     Unfair claims practice regulations
§ 11:29       Anti-SLAPP (Strategic Lawsuits Against Public
               Participation) statute
§ 11:30       Insured's insolvency

G.   FACTORS SHOWING BAD FAITH
§ 11:31      Abusive or coercive claims practices
§ 11:32      Failure to advance payment
§ 11:33      Advice of counsel, rejection of
§ 11:34      Insurer's enforcement of policy rights
§ 11:34.1    Insurer not liable for bad faith refusal to exercise policy
              rights
§ 11:35      Insurer's cancellation of policy



xl
Table of Contents

§ 11:36     Insurer's refusal to renew policy
§ 11:37     Insurer's insistence on examination under oath
§ 11:38     Delay
§ 11:38.1   Necessity of pleading economic loss in delay cases
§ 11:39     Delay in paying or refusing to pay admittedly covered
             portion of claim until disputed portion is resolved
§ 11:40     Insurer's delay in settling liability claim against insured
             based on belief that policy does not provide coverage
§ 11:41     Failure to advise insured of policy rights
§ 11:42     Failure to communicate with insured
§ 11:43     Failure to defend
§ 11:43.1   Judgment against insured is not required
§ 11:43.2   Eect on insurer's denial of coverage on insured's duty to
             tender defense
§ 11:43.3   Eect of insured's late notice on insurer's duty to defend
§ 11:43.4   Punitive damages for failure to defend
§ 11:44     Termination of insured's defense
§ 11:45     Refusal to defend coupled with refusal to settle
§ 11:46     Litigation tactics
§ 11:46.1   Settlement oers
§ 11:46.2   Settlement oers: Žre insurance claims
§ 11:46.3   Insurer's decision to appeal
§ 11:46.4   Insurer's failure to appeal
§ 11:46.5   Insurer's Žling action for declaratory relief
§ 11:46.6   Insurer's Žling interpleader action
§ 11:46.7   Insurer's Žling fraud action
§ 11:46.8   Misrepresentation of policy limits
§ 11:46.9   Assertion of subrogation rights
§ 11:47     Mistaken withholding of beneŽts
§ 11:48     Narrow interpretation of claims form
§ 11:49     Narrow policy interpretation (Žrst-party claims)
§ 11:50     Failure to comply with industry custom and practice
§ 11:51     Assertion of untested legal theory
§ 11:52     Failure to preserve evidence and insured's rights against
             others
§ 11:53     Health insurance cost containment practices
§ 11:53.1   Federal preemption
§ 11:54     Insurer's pursuit of contribution from other insurers
§ 11:55     Premium disputes

H.   DUTY TO INVESTIGATE
§ 11:56     Bad faith based on inadequate investigation
§ 11:56.1   When duty begins
§ 11:56.2   Constructive vs. actual notice



                                                                          xli
                                  California Insurance Law Handbook

§ 11:57      When duty to investigate ends
§ 11:58      Delegability of insurer's duty to investigate
§ 11:59      Eect of insured's lack of cooperation
§ 11:60      When fraud is suspected
§ 11:61      To whom duty to investigate is owed
§ 11:62      First-party claims
§ 11:62.1    Computerized claims evaluation
§ 11:63      Third-party claims
§ 11:64      Insurer's willingness to reconsider denial

I.     DUTY TO SETTLE CLAIMS AGAINST INSURED
§ 11:65       Duty to settle liability claims against insured
§ 11:65.1     Failure to settle liability claims based on belief that policy
               does not provide coverage
§ 11:65.2     Obligation to accept “reasonable” oers to settle claims
               against insured
§ 11:65.3     Obligation to accept “reasonable” oers to settle claims
               against insured: scope of permissible evidence in bad
               faith failure to settle suits
§ 11:65.4     Insurers' duty not to make unreasonably low settlement
               oer
§ 11:65.5     Insurers' duty not to make unreasonably low settlement
               oer: insurers' unreasonable conditions to settlement
               oer as evidence of bad faith
§ 11:65.6     Relevance of insured's insolvency to reasonableness of
               settlement oer
§ 11:65.7     Relevance of uncovered claims and punitive damages to
               reasonableness of settlement oer
§ 11:65.8     Insurer's duty when settlement demand exceeds policy
               limits
§ 11:65.9     Insurer's duty when settlement demand exceeds policy
               limits: determining when settlement demand exceeds
               policy limits
§ 11:65.10    Requirement that insurer have opportunity to settle
§ 11:65.11    Requirement that insurer have opportunity to settle:
               insured's objection to settlement
§ 11:65.12    Requirement that insurer have opportunity to settle:
               lienholder's or subrogee's refusal to release insured from
               liability
§ 11:65.13    Requirement that insurer have opportunity to settle:
               claimant's refusal to release insured from liability
§ 11:65.14    Liability for settling without obtaining release of insured's
               liability
§ 11:65.15    Time limited settlement oers
§ 11:65.16    Insurer's belated willingness to settle



xlii
Table of Contents

§ 11:65.17   Insurer's inadequate investigation of claim
§ 11:65.18   Insurer's duty to evaluate settlement oer and negotiate
§ 11:65.19   Insurer's duty to evaluate settlement oer and negotiate:
              insurer's duty to initiate settlement negotiations
§ 11:65.20   Insurer's duty to evaluate settlement oer and negotiate:
              delegability of insurer's duty to evaluate settlement oer
              and negotiate
§ 11:65.21   Failure to keep insured informed about settlement
              negotiations
§ 11:65.22   Requirement of judgment in excess of policy limits
§ 11:65.23   Requirement of judgment in excess of policy limits:
              insured need not pay excess verdict
§ 11:65.24   Requirement of judgment in excess of policy limits: eect
              of reductions in verdict for prior settlements with other
              defendants
§ 11:65.25   Requirement of judgment in excess of policy limits:
              liability where verdict exceeds settlement demand
§ 11:65.26   Insurer's duty to settle when there are multiple claimants
              and insucient policy limits
§ 11:65.27   Insurer's duty to settle when there are multiple claimants
              and insucient policy limits: no duty to inquire about
              other claimants before paying policy limits
§ 11:65.28   Insurer's duty to settle when there are multiple insureds
              and insucient policy limits
§ 11:65.29   Eect of self-consuming policy limits on insurer's duty to
              settle
§ 11:65.30   Obligation to consider insured's rights against others
§ 11:65.31   Settlement over insured's objections
§ 11:65.32   Settlement over insured's objections: settlements within
              insured's deductible
§ 11:65.33   Settlement over insured's objections: settlement over
              objection of insured who is not defendant in case
§ 11:65.34   Settlement over insured's objections: refusal to settle
              based on objection of insured
§ 11:65.35   Insurer's duty to consider eect of settlement on
              retrospective premium obligations
§ 11:65.36   Insured's duty to contribute self-insured retention
§ 11:65.37   Insured's duty to contribute self-insured retention:
              insurer's liability for coercing insured to contribute to
              settlement
§ 11:65.38   Eect of insurer's tender of policy limits
§ 11:65.39   Eect of insurer's waiver of policy limits
§ 11:65.40   Sanctions for failure to settle
§ 11:65.41   Insured's option to settle with third-party when insurer
              refuses to settle
§ 11:65.42   Insured's option to settle with third-party when insurer



                                                                     xliii
                                 California Insurance Law Handbook

               refuses to settle: insurers not obligated to pay
               settlements entered into by insured's independent
               counsel
§ 11:65.43    Insured's option to settle with third-party when insurer
               refuses to settle: estoppel to contest collusiveness of
               stipulated judgment

J.     PLAINTIFFS
§ 11:66      Plaintis
§ 11:66.1    Third party plaintis: breach of implied covenant of good
              faith and fair dealing
§ 11:66.2    Third party plaintis: traditional tort and statutory
              theories
§ 11:67      Judgment creditors
§ 11:68      Express beneŽciaries
§ 11:69      Additional or unnamed insureds
§ 11:70      Standing to sue for denial of beneŽts to another insured
§ 11:71      Insured's spouse
§ 11:72      Shareholders in or members of insured
§ 11:73      Organization's standing to sue for members' injury
§ 11:74      Insured's estate
§ 11:75      Special rules applicable to non-admitted insurers
§ 11:76      Bankruptcy trustees
§ 11:77      Excess insurers
§ 11:78      Reinsurers
§ 11:79      Agents and brokers
§ 11:80      Standing of clients of employee leasing company to sue
              leasing company's workers' compensation insurer

K.     DEFENDANTS
§ 11:81       Parent companies
§ 11:82       Representatives of insurance companies
§ 11:82.1     Insurance company employees' liability for violation of
               implied covenant
§ 11:82.2     Conspiracy to violate implied covenant
§ 11:82.3     Conspiracy to commit independent tort
§ 11:82.4     Other theories
§ 11:83       Attorneys—Insurance defence counsel: liability for
               insurance bad faith
§ 11:83.1     No liability for conspiracy to violate covenant of good faith
               and fair dealing
§ 11:83.2     Liability for breaching duties owed directly to insured
§ 11:83.3     Attorney—Insured's independent counsel: liability to
               insurer for insurance bad faith



xliv
Table of Contents

§ 11:84      Independent management companies
§ 11:85      Independent adjusters and investigators
§ 11:86      Defense medical examiners
§ 11:87      Finance companies arranging coverage for independent
              insurers
§ 11:88      California Insurance Guarantee Association (CIGA)
§ 11:89      Excess insurers
§ 11:90      Medicare carriers
§ 11:91      Policyholders (reverse bad faith)
§ 11:92      Reinsurer's liability to reinsured for breach of covenant of
              good faith and fair dealing
§ 11:93      Reinsurer's liability to original insured for breach of
              covenant of good faith and fair dealing
§ 11:94      Reinsurer's liability to third-party claimants against
              original insured for breach of covenant of good faith and
              fair dealing
§ 11:95      Sureties
§ 11:95.1    Federal preemption of claims against sureties
§ 11:96      Uninsured motorist carriers
§ 11:96.1    Necessity of obtaining an arbitration award against
              uninsured motorist carrier
§ 11:97      Vehicle service contractors
§ 11:98      Workers' compensation carriers: duty to employee
§ 11:99      Workers' compensation carriers: liability of insurer's
              agents
§ 11:100     Workers' compensation carriers: duty to employer
§ 11:101     Workers' compensation carriers: duty to health care
              providers
§ 11:102     Workers' compensation insurance: liability of state
              compensation insurance fund
§ 11:103     Liability for violation of workers' compensation rate
              making law: Insurance Code § 11758
§ 11:104     Liability of workers' compensation insurer for insured's
              attorney fees
§ 11:105     Cross defendants for contribution and indemnity
§ 11:105.1   Co-insurers
§ 11:105.2   Insured's attorney
§ 11:105.3   Third-party claimant's attorney
§ 11:105.4   Insured's codefendant
§ 11:105.5   Eect of bad faith conduct on insurer's right to pursue
              subrogation

L.   PRACTICE AND PROCEDURE
§ 11:106     Collateral estoppel
§ 11:107     Discovery



                                                                       xlv
                                   California Insurance Law Handbook

§ 11:107.1    Psychiatric examinations

M.       EVIDENCE ISSUES
§ 11:108      Relevance generally
§ 11:109      Relevance of settlement oers
§ 11:110      Relevance of litigation tactics
§ 11:111      Inferences justifying award of punitive damages
§ 11:112      Inferences: excess judgment as evidence of
               “reasonableness” of settlement oer
§ 11:113      Inferences: settlements as evidence of reasonableness of
               settlement oer
§ 11:114      Industry custom and practice
§ 11:115      Expert testimony
§ 11:116      Insurer's pattern and practice
§ 11:117      Role of judge and jury in deciding bad faith issues
§ 11:117.1    Cases Žnding bad faith as matter of law
§ 11:117.2    Cases Žnding no bad faith as matter of law

N.     PRE-CONTRACT DEALINGS
§ 11:118     Pre-contract dealings, liability for

O.     POSTJUDGMENT ACTIVITY
§ 11:119     Postjudgment activity, liability for

P.     STANDARD OF LIABILITY
§ 11:120      First-party claims
§ 11:120.1    Eect of insured's representation by counsel on insurer's
               standard of care
§ 11:120.2    Eect of prior trial court ruling erroneously denying
               coverage
§ 11:121      Bad faith refusal to defend
§ 11:122      Bad faith delay in settling third-party claims
§ 11:123      Refusal to settle third-party claims

CHAPTER 12. BAD FAITH: TRADITIONAL
TORT AND STATUTORY THEORIES
A.     INTRODUCTION
§ 12:1     Introduction and background

B.     TRADITIONAL TORT THEORIES
§ 12:2       Conspiracy



xlvi
Table of Contents

§ 12:3       Fiduciary duty
§ 12:4       Fraud in inducement
§ 12:4.1     Fraud in resolution of claims
§ 12:4.2     Immunity
§ 12:4.3     Assignability
§ 12:4.4     Liability of insurer's agents
§ 12:4.5     Fraud, justiŽable reliance, and insured's duty to read policy
§ 12:5       Interference with contractual relations
§ 12:6       Malicious defense
§ 12:7       Malicious prosecution
§ 12:8       Intentional iniction of emotional distress
§ 12:9       Negligent iniction of emotional distress
§ 12:10      Negligent misrepresentation
§ 12:10.1    Comparative fault inapplicable
§ 12:10.2    Liability of insured's insurance broker
§ 12:11      Negligence
§ 12:12      Spoliation of evidence

C.   STATUTES
§ 12:13       Fair Insurance Responsibility Act of 2000—Third–party
               bad faith
§ 12:13.1     Insurance Code § 1280.7
§ 12:13.2     Business and Professions Code theories
§ 12:13.3     Code of Civil Procedure theories: Sanctions
§ 12:13.4     Other sanctions
§ 12:13.5     Racketeer Inuenced Corrupt Organizations Act (RICO)
§ 12:13.6     Unruh Civil Rights Act—Underwriting discrimination
               claims
§ 12:13.7     California Earthquake Insurance Act
§ 12:13.8     California's Holocaust Victim Insurance Relief Act
§ 12:13.9     California's Holocaust Victim Insurance Relief Act:
               Constitutional challenge to Holocaust Victim Insurance
               Relief Act's disclosure requirements
§ 12:13.10    California's Holocaust Victim Insurance Relief Act:
               Constitutional challenge to Holocaust Victim Insurance
               Relief Act's disclosure requirements: Ninth Circuit
               rulings
§ 12:13.11    California's Holocaust Victim Insurance Relief Act:
               Constitutional challenge to Holocaust Victim Insurance
               Relief Act's disclosure requirements: The United States
               Supreme Court's opinion reversing the Ninth Circuit
§ 12:13.12    California's Holocaust Victim Insurance Relief Act:
               Constitutional challenge to Holocaust Victim Insurance
               Relief Act's disclosure requirements: Constitutional
               challenge to the Holocaust Victim Insurance Relief Act's
               enforcement provisions



                                                                      xlvii
                                 California Insurance Law Handbook

CHAPTER 13. UNFAIR CLAIMS PRACTICES
REGULATIONS AND STATUTORY
DISCLOSURE REQUIREMENTS
A.       IN GENERAL
§ 13:1       Generally
§ 13:1.1     History and background
§ 13:1.2     Scope of regulations
§ 13:1.3     File and document retention rules
§ 13:1.4     Reporting requirements
§ 13:1.5     Time deadlines imposed on insurers
§ 13:1.6     Acknowledgment of claims
§ 13:1.7     Send necessary claim forms and instructions to claimants
§ 13:1.8     Respond to communications from claimant
§ 13:1.9     Respond to inquiries from the department of insurance
§ 13:1.10    Investigation of claim
§ 13:1.11    Accept or deny claim
§ 13:1.12    Payment of claim
§ 13:1.13    Waiver of deadlines in “extraordinary circumstances”
§ 13:1.14    Insurers' duty not to make unreasonably low settlement
              oer
§ 13:1.15    Insurers' duties when denying claim
§ 13:1.16    Prohibitions on discriminatory claims handling
§ 13:1.17    Special rules regarding releases
§ 13:1.18    Training requirements

B.       STANDARDS APPLICABLE TO SPECIFIC
         TYPES OF INSURERS
§ 13:2      Personal and commercial automobile insurance
§ 13:2.1    Replacement cost coverage
§ 13:2.2    Sureties

C.       VIOLATIONS OF THE REGULATIONS
§ 13:3      Single incident trigger
§ 13:3.1    Vicarious liability
§ 13:3.2    Penalties
§ 13:3.3    Eect of regulations on common law bad faith litigation
§ 13:3.4    Statutory disclosure requirements
§ 13:3.5    Disclosure requirements



xlviii
Table of Contents

CHAPTER 14. BINDERS AND INTERIM
CONTRACTS
A.   IN GENERAL
§ 14:1     Agent's authority to bind insurer
§ 14:1.1   Renewals

B.   BINDERS
§ 14:2     Binders or interim insurance
§ 14:2.1   Necessity of insurer's reliance on or knowledge of binders
§ 14:2.2   Oral insurance contracts
§ 14:2.3   Eect of provisions in policy application or conditional
            receipt of premium form making acceptance condition
            precedent to coverage
§ 14:2.4   Insurer's right to deny interim coverage based on policy
            exclusions
§ 14:2.5   Eective dates of binder or interim policy
§ 14:2.6   Duration
§ 14:2.7   Cancellation: Insured's right
§ 14:2.8   Cancellation of binder or rejection of application before
            applicant's death or injury: Insurer's right

CHAPTER 15. CANCELLATION
A.   IN GENERAL
§ 15:1     Bad faith cancellation
§ 15:1.1   Insured's right
§ 15:1.2   Insurer's right
§ 15:1.3   Eect of insured's bankruptcy
§ 15:1.4   Loss in progress
§ 15:1.5   Premium Žnance company's right
§ 15:1.6   Fraudulent premium Žnancing transaction

B.   STATUTORY RESTRICTIONS
§ 15:2     Automobile insurance
§ 15:2.1   Local government restrictions on renewals and cancellations
§ 15:2.2   Common carrier insurance
§ 15:2.3   Noncommercial aircraft
§ 15:2.4   Health insurance
§ 15:2.5   Noncommercial policies
§ 15:2.6   Commercial policies

C.   CANCELLATION PROCEDURE
§ 15:3     Cancellation procedure



                                                                        xlix
                                 California Insurance Law Handbook

§ 15:3.1    Necessity of premium refund
§ 15:3.2    Proof requirements
§ 15:3.3    Notice not required upon expiration of policy
§ 15:3.4    Notice to additional insureds

D.   GRACE PERIODS
§ 15:4     Grace periods

CHAPTER 16. CAUSATION
A.   BACKGROUND AND INTRODUCTION
§ 16:1     Background and introduction

B.   EARTHQUAKES
§ 16:2      First-party claims
§ 16:2.1    Earthquake losses

C.   THIRD-PARTY CLAIMS
§ 16:3     Third-party claims

D.   BURDEN OF PROOF
§ 16:4     Burden of proof

E.   POLICY LANGUAGE
§ 16:5      Restrictions on ecient proximate cause standard
§ 16:5.1    Coverage broader than ecient proximate cause standard
§ 16:5.2    Ensuing loss clause

CHAPTER 17. CHOICE OF LAW
§ 17:1      Introduction and background
§ 17:2      California choice of law rules
§ 17:2.1    —A dissenting view
§ 17:3      Insurance cases applying California Choice of Law Rules
§ 17:4      Contractual choice of law provisions
§ 17:5      Impact of service of suit clauses

CHAPTER 18. CLAIMS MADE COVERAGE
A.   BACKGROUND AND INTRODUCTION
§ 18:1      Background and introduction



l
Table of Contents

§ 18:1.1    Insurer's duty to inform insured of limited nature of claims-
             made coverage
§ 18:1.2    Policies interpreted to provide both claims made and
             occurrence coverages

B.   CLAIMS
§ 18:2      Claims deŽned
§ 18:2.1    Time claim is made
§ 18:2.2    Number of claims

C.   “POTENTIAL” CLAIMS
§ 18:3      Coverage for “potential” claims reported during policy period
§ 18:3.1    Duty to provide notice of claim after providing notice of
             “potential” claim

D.   REPORTED CLAIMS
§ 18:4      Claims made and reported requirement: “notice-prejudice”
             rule not applicable
§ 18:4.1    Adequacy of notice under claims made and reported policy
§ 18:4.2    Notice-prejudice rule applicable where policy does not
             require claim be reported during policy period

E.   POLICY LIMITS
§ 18:5      Aggregate limits
§ 18:5.1    “Per claim” limits
§ 18:5.2    Stacking of per claim limits

F.   COVERAGE OF POLICY
§ 18:6      Trigger of coverage
§ 18:6.1    Claims related to wrongful acts reported during the policy
             period
§ 18:6.2    Subsequent claims related to claims made during policy
             period
§ 18:6.3    Retroactive coverage, prior acts
§ 18:6.4    Extension of coverage upon cancellation or nonrenewal

CHAPTER 19. CONTRACTUAL LIABILITY
ENDORSEMENT
§ 19:1     Background
§ 19:2     Scope
§ 19:3     Duty to defend



                                                                         li
                                  California Insurance Law Handbook

CHAPTER 20. CONTRACTUAL
LIMITATIONS PERIODS
A.    VALIDITY
§ 20:1     Validity

B.    COMMENCEMENT AND TOLLING
§ 20:2      Property insurance claims
§ 20:2.1    Question of fact and burden of proof
§ 20:2.2    Eect of type of coverage on when appreciable harm occurs
§ 20:2.3    Tolling
§ 20:3      Health and disability claims
§ 20:4      Prejudice

C.    EARTHQUAKES CLAIMS
§ 20:5      Earthquake claims
§ 20:5.1    Northridge earthquake claims (California Code of Civil
             Procedure § 340.9)
§ 20:6      Eect of California Code of Civil Procedure § 340.9 on
             policyholder's right to raise equitable estoppel arguments

D.    ENFORCEABILITY
§ 20:7      Enforceability: Waiver and estoppel
§ 20:7.1    Waiver and estoppel of limitations period on earthquake
             claims
§ 20:7.2    Estoppel to assert limitations period based on failure to
             comply with regulations
§ 20:7.3    Civil Code § 1962 “wrongful rescission” actions

E.    IN GENERAL
§ 20:8      Against insurer
§ 20:9      Bad faith claims
§ 20:10     Contribution claims
§ 20:11     ERISA
§ 20:12     RICO claims

CHAPTER 21. CONTRIBUTION AND
INDEMNITY
A.    INTRODUCTION AND BACKGROUND
§ 21:1     Introduction and background



lii
Table of Contents

B.   ASSIGNMENTS
§ 21:2    Assignment of contribution and indemnity claims

C.   BAD FAITH AND EXTRA-CONTRACTUAL
     LIABILITY CLAIMS
§ 21:3    Cross complaints against insured's attorney
§ 21:4    Contribution or indemnity from other insurers

D.   DEFENSES TO CONTRIBUTION CLAIMS
§ 21:5     Contractual limitations period
§ 21:6     Eect of good faith settlement
§ 21:7     Insurer's breach of duty to insured: unclean hands
§ 21:8     Insolvency
§ 21:9     No covered loss
§ 21:10    Requirement that parties to contribution action cover same
            risk
§ 21:11    Volunteers
§ 21:12    Statute of limitations
§ 21:13    Lack of notice

E.   DEFENSE COSTS
§ 21:14    Post-tender defense costs: contribution actions between
            insurers
§ 21:15    Pre-tender defense costs: contribution actions between
            insurers
§ 21:16    Eect of insurer insolvency
§ 21:17    Insured's obligation to contribute

F.   INDEMNITY COSTS
§ 21:18    Burdens of proof

G.   IN GENERAL
§ 21:19    Disputes between excess insurers and primary insurers
§ 21:20    Insurers for disputes between lessors and lessees
§ 21:21    Disputes between automobile insurers
§ 21:22    Reservation of rights to seek contribution from other insurers
§ 21:23    Securities laws

H.   ARBITRATION
§ 21:24    Arbitration



                                                                        liii
                                   California Insurance Law Handbook

CHAPTER 22. DIRECT ACTIONS
A.    INTRODUCTION AND BACKGROUND
§ 22:1     Introduction and background
§ 22:2     Validity of policy language qualifying Insurance Code
            § 11580(b)(2)

B.    ACCRUAL OF CAUSE OF ACTION
§ 22:3     Accrual of direct cause of action by third–party claimant
            against insured's liability carrier: Eect of policy's no action
            clause
§ 22:4     Accrual of direct cause of action by insured: Eect of policy's
            no action clause
§ 22:5     Accrual of direct cause of action by third–party claimant
            against California Insurance Guarantee Association (CIGA)

C.    SCOPE OF LIABILITY
§ 22:6     Scope of third–party claimant's rights against insurer
§ 22:7     Extra–contractual liability for failure to pay judgment against
            insured

D.    DEFENSES
§ 22:8      Defenses
§ 22:8.1    Lack of notice to insurer
§ 22:8.2    Rescission or reformation
§ 22:8.3    Collateral estoppel eect of underlying action
§ 22:9      Third–party beneŽciaries

CHAPTER 23. DIRECTORS AND OFFICERS
A.    BACKGROUND
§ 23:1     Background

B.    ALLOCATION
§ 23:2      Allocation between covered and uncovered claims and
             parties
§ 23:2.1    Burden of proof
§ 23:2.2    Eect on “best eorts” clause on allocation
§ 23:2.3    Eect of allocation of defense costs on attorney–client
             privilege

C.    DEFENSE COSTS
§ 23:3     Duty to pay as incurred



liv
Table of Contents

§ 23:4    Reduction of policy limits
§ 23:5    Insurer's right to obtain reimbursement of defense costs
           advanced

D.   DISCOVERY CLAUSE
§ 23:6    Discovery clause: Extension of coverage on cancellation or
           nonrenewal

E.   EXCLUSIONS
§ 23:7      Insured versus insured exclusion from both executive liability
             and corporate reimbursement coverages
§ 23:8      Regulatory exclusion from both executive liability and
             corporate reimbursement coverages
§ 23:9      Dishonesty exclusion from executive liability coverage
§ 23:10     Personal proŽt or gain exclusion from executive liability
             coverage
§ 23:11     Pollution
§ 23:12     Greenmail or securities acquisition
§ 23:13     Securities law violations
§ 23:14     Prior litigation
§ 23:15     Prior acts
§ 23:16     Statutory prohibition against coverage for “wilful” acts:
             Insurance Code § 533

F.   NO ACTION
§ 23:17     No action clause

G.   POLICY LIMITS
§ 23:18     Policy limits and deductibles: Number of losses or claims

H.   RESCISSION
§ 23:19     Rescission, misrepresentation, innocent co–insureds

I.   SCOPE OF COVERAGE
§ 23:20      Scope of coverage
§ 23:21      Claims made coverage
§ 23:21.1    Claims made and reported requirement, no need to prove
              prejudice resulting from late reporting
§ 23:21.2    Adequacy of notice to insurer under claims made and
              reported policy
§ 23:22      Requirement that wrongful act be committed in capacity as
              director or ocer



                                                                        lv
                                  California Insurance Law Handbook

§ 23:23      Requirement that wrongful act be committed by director or
              ocer
§ 23:24      Requirement that wrongful act cause loss
§ 23:25      Corporate Reimbursement coverage: Requirement that
              indemniŽcation be permitted or required

CHAPTER 24. DISABILITY INSURANCE
A.    INTRODUCTION
§ 24:1    Introduction

B.    DAMAGES
§ 24:2    Damages for breach of disability contract

C.    DISABILITY—DEATH
§ 24:3    Disability—Death

D.    DISABILITY—TOTAL DISABILITY
§ 24:4      DeŽned as inability to perform “any” occupation
§ 24:5      Disability deŽned as inability to engage in insured's “usual”
             or “regular” occupation
§ 24:6      DeŽned as inability to perform “every duty” of occupation
§ 24:7      Requirement that insured be house conŽned
§ 24:8      Distinction between factual and legal disability (requirement
             that insured's inability to work result from accident,
             sickness or disease)
§ 24:9      Expert evidence to prove disability
§ 24:10     Bad faith liability for narrowly construing disability

E.    LIMITATIONS ON BENEFITS
§ 24:11      Mental illness limitation
§ 24:12      Disability resulting from sickness versus disability
              resulting from accidental injury
§ 24:12.1    Bad faith assertion that injury results from sickness,
              rather than accident
§ 24:13      Coordination of beneŽts or other income clauses
§ 24:14      Preexisting conditions exclusion
§ 24:15      Workers' compensation exclusion
§ 24:16      Proof of loss
§ 24:17      Reimbursement from tortfeasors

F.    TERMINATION OF COVERAGE
§ 24:18      Vesting of beneŽts



lvi
Table of Contents

§ 24:18.1     Rescission
§ 24:18.2     Bad faith rescission of disability policy

G.   TIME OF DISABILITY
§ 24:19       Generally
§ 24:20       Process of nature rule
§ 24:20.1     Federal preemption

H.   IN GENERAL
§ 24:21     Policy interpretation
§ 24:22     Time limits disability clauses
§ 24:23     Arbitration

CHAPTER 25. DISCOVERY
A.   CLAIMS FILES AND CLAIMS MANUALS
§ 25:1      Insured's claims Žles
§ 25:1.1    Other insureds' claims Žles
§ 25:1.2    Privacy issues
§ 25:1.3    Claims manuals
§ 25:1.4    Excess insurer's right to obtain pretrial discovery of
             policyholder's settlements with primary insurer's

B.   INSURANCE POLICIES
§ 25:2      Contents
§ 25:2.1    Drafting history

C.   IN GENERAL
§ 25:3      Privilege for attorney–client communications
§ 25:3.1    Eect of asserting advice of counsel defense
§ 25:3.2    Eect of failure to assert privilege
§ 25:3.3    Psychiatric examinations
§ 25:3.4    Reinsurance information
§ 25:3.5    Reserves

CHAPTER 26. DUTY TO ADVISE
§ 26:1     Adequacy of or restrictions on coverage
§ 26:2     Insured's policy rights
§ 26:3     Reasons for denial of claim
§ 26:4     Duty to advise additional insureds
§ 26:5     Duty to advise loss payees



                                                                     lvii
                                   California Insurance Law Handbook

§ 26:6     Duty to advise about reductions in coverage in renewal
            policies
§ 26:7     Duty to advise about anticipated material changes in policy

CHAPTER 27. DUTY TO COOPERATE
A.      BACKGROUND
§ 27:1     Background

B.      IN GENERAL
§ 27:2      Breach of duty to cooperate
§ 27:2.1    Defense to bad faith
§ 27:2.2    Defense to duty to defend or provide coverage
§ 27:2.3    Defense to direct action after judgment against insured
§ 27:3      Declaratory relief to establish lack of cooperation

C.      PREJUDICE REQUIREMENT
§ 27:4     First–party claims
§ 27:5     Liability claims
§ 27:6     Waiver and estoppel

CHAPTER 28. DUTY TO INVESTIGATE
INSURABILITY
§ 28:1     Generally
§ 28:2     Liability to insured
§ 28:3     Liability to third–parties

CHAPTER 29. EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974 (ERISA)
A.      INTRODUCTION AND BACKGROUND
§ 29:1     Introduction and background: ERISA's preemption of state
            laws

B.      ANALYTICAL FRAMEWORK
§ 29:2      Analytical framework
§ 29:2.1    Requirement that employer be engaged in interstate
             commerce
§ 29:2.2    ERISA's preemption provisions
§ 29:2.3    “Deemer” clause: Exemption of self–funded plans from state
             insurance regulation



lviii
Table of Contents

§ 29:2.4    Employee beneŽt plans
§ 29:2.5    Employee beneŽt plans: Requirement that plan be
             “established or maintained” by “employer”
§ 29:2.6    Employee beneŽt plans: Requirement that plainti be
             “participant” in employee beneŽt plan
§ 29:2.7    Employee beneŽt plans: Exempt government plans

C.   WHAT CLAIMS ARE PREEMPTED
§ 29:3      Breach of covenant of good faith and fair dealing
§ 29:4      Fraud and fraudulent inducement
§ 29:5      Rescission
§ 29:6      Breach of contract claims
§ 29:7      Negligence
§ 29:8      Unfair Claims Practices Act remedies
§ 29:9      Tort liability arising out of health care cost containment and
             utilization review
§ 29:10     RICO actions
§ 29:11     Claims against persons and entities that are not ERISA
             Žduciaries
§ 29:12     Claims against agents of insurer
§ 29:13     Claims against trustees
§ 29:14     Claims by health care providers for payment for services
             rendered

D.   WHAT LAWS ARE PREEMPTED
§ 29:15     Mandatory beneŽts statutes
§ 29:16     Rights to conversion and continued coverage
§ 29:17     Rules regarding “vesting” of health and disability beneŽts
§ 29:18     State rescission statutes
§ 29:19     Common law notice—Prejudice rule
§ 29:20     Common law process of nature rule

E.   REMEDIES UNDER ERISA
§ 29:21      ERISA § 502(a)(1)
§ 29:21.1    Plaintis
§ 29:21.2    Defendants
§ 29:22      Estoppel
§ 29:23      ERISA § 502(a)(3): ‘‘Other appropriate equitable relief’’
§ 29:23.1    502(a)(3)
§ 29:24      ERISA § 409(a): Action for breach of Žduciary duty
§ 29:24.1    Action for breach of Žduciary duty based on failure to
              disclose Žnancial incentives to withhold treatment
§ 29:25      Attorney fees and prejudgment interest



                                                                         lix
                                  California Insurance Law Handbook

§ 29:26      Remedies under federal common law

F.   IN GENERAL
§ 29:27     Who is Žduciary under ERISA
§ 29:28     When are insurer funds ‘‘plan assets’’ over which insurer has
             Žduciary obligations
§ 29:29     Choice of law: State law versus federal common law

G.   PROCEDURE
§ 29:30      When preemption defense must be raised
§ 29:31      Jurisdiction and removal to federal court
§ 29:32      Contractual and statutory limitations periods
§ 29:33      Standard of Judicial Review
§ 29:33.1    Policy language triggering discretionary standard of review
§ 29:33.2    Eect of Insurance Commissioner's notice withdrawing
              approval of discretionary provisions in disability policies
§ 29:33.3    Applications of standard of judicial review
§ 29:33.4    Treating physician rule

CHAPTER 30. ESTOPPEL AND WAIVER
A.   ESTOPPEL AND WAIVERS
§ 30:1    Estoppel and waiver: compared and contrasted

B.   GROUNDS ON WHICH INSURERS MAY BE
     ESTOPPED TO DENY COVERAGE
§ 30:2       Representations to insured regarding scope of coverage
§ 30:3       Insurer's failure to advise about adequacy of or restrictions
              on coverage
§ 30:4       Insurer's failure to advise about insured's policy rights
§ 30:5       Insurer's failure to advise loss payees
§ 30:6       Insurer's failure to advise additional insureds
§ 30:7       Insurer's failure to investigate
§ 30:8       Insurer's bad faith
§ 30:9       Settlement of similar claims against other insureds
§ 30:10      Failure to notify insured of reductions in coverage in
              renewal policy
§ 30:10.1    Is duty to notify of reduction in coverage applicable only
              when insurance policy is adhesion contract?
§ 30:11      Failure to specify grounds for denying coverage in
              declination of coverage
§ 30:11.1    Failure to mention limitations on coverage in declination of
              coverage letter



lx
Table of Contents

§ 30:12      Defense without reservation of rights
§ 30:12.1    Burden of proof
§ 30:13      Waiver of defenses asserted in reservation of rights letter
§ 30:14      Failure to assert defenses in reservation of rights letter

C.   ESTOPPEL TO ASSERT VARIOUS DEFENSES
§ 30:15     Estoppel to assert contractual limitations period based on
             failure to comply with regulations
§ 30:16     Estoppel to assert statutory limitations period based on
             failure to comply with regulations
§ 30:17     Estoppel to contest coverage based on insurer-appointed
             defense counsel's advice to claimant to request general
             verdict
§ 30:18     Estoppel to assert duty to cooperate
§ 30:19     Estoppel to assert late notice
§ 30:20     Estoppel to deny reimbursement of costs based on insured's
             failure to obtain insurer's consent
§ 30:21     Estoppel to assert limitations period
§ 30:22     Estoppel to rescind: misrepresentations by agent or broker
§ 30:23     Estoppel to rescind: insurer's failure to investigate
             insurability
§ 30:24     Estoppel to rescind: estoppel to refuse reinstatement after
             lapse
§ 30:25     Estoppel to rescind: estoppel to contest collusiveness of
             settlement
§ 30:26     Estoppel to rescind: public policy limitations on estoppel and
             waiver
§ 30:27     Estoppel to rescind: estoppel against California Insurance
             Guaranty Association

D.   PROCEDURE
§ 30:28     Pleading estoppel

E.   PUNITIVE DAMAGES
§ 30:29     Punitive damages are not recoverable where liability is based
             on estoppel

CHAPTER 31. EVIDENCE
A.   IN GENERAL
§ 31:1      Best evidence rule
§ 31:1.1    Lost policy issues
§ 31:2      Attorney-client communications



                                                                           lxi
                                 California Insurance Law Handbook

§ 31:3      Coverage issues

B.     COVERAGE ISSUES
§ 31:4       Evidence of Communications between insurer and insured
§ 31:5       Industry-wide drafting history
§ 31:6       Insurer's claims manual
§ 31:7       Relevance of subsequent policy revision
§ 31:8       Inconsistent litigation positions
§ 31:9       Communications proving insured's reasonable expectations
§ 31:10      Advertising literature
§ 31:11      Course of conduct
§ 31:12      Exclusion of evidence under Evidence Code § 352
§ 31:13      Burden of proof in coverage disputes
§ 31:13.1    Exceptions to exclusions
§ 31:14      Role of judge and jury in interpretation of insurance
              policies
§ 31:15      Expert testimony to prove coverage

C.     EXTRA-CONTRACTUAL LIABILITY
§ 31:16      Relevance generally
§ 31:17      Scope of permissible evidence in bad faith failure to settle
              suits
§ 31:18      Relevance of settlement oers
§ 31:19      Relevance of litigation tactics
§ 31:19.1    Inferences justifying award of punitive damages
§ 31:19.2    Excess judgment as evidence of “reasonableness” of
              settlement oer
§ 31:19.3    Settlements as evidence of reasonableness of settlement
              oer
§ 31:20      Industry custom and practice
§ 31:21      Insurer's pattern and practice
§ 31:22      Speculative questions
§ 31:23      Questions of law and fact
§ 31:24      Burdens of proof

D.     EXPERT TESTIMONY
§ 31:25     Expert testimony to prove bad faith

E.     ROLE OF JUDGE AND JURY
§ 31:26      Role of judge and jury in deciding bad faith issues
§ 31:26.1    Cases Žnding bad faith as matter of law
§ 31:26.2    Cases Žnding no bad faith as matter of law



lxii
Table of Contents

CHAPTER 32. EXCESS INSURANCE
A.   BACKGROUND AND INTRODUCTION
§ 32:1     Background and introduction

B.   DUTY TO SETTLE
§ 32:2      Excess insurer's rights against primary insurer
§ 32:2.1    Damages recoverable
§ 32:2.2    Necessity of excess judgment
§ 32:2.3    Defense to primary insurer's contribution action
§ 32:3      Excess insurer's rights against California Insurance
             Guaranty Association (CIGA)
§ 32:4      Primary insurer's rights against excess insurer
§ 32:5      Insured's rights against excess insurer
§ 32:6      Excess insurer's rights against insured
§ 32:7      Excess insurer's duty when there are too many insureds and
             too little insurance
§ 32:8      Settlement of claims against insured over excess insurer's
             objections

C.   DUTY OF EXCESS INSURER UPON
     INSOLVENCY OF UNDERLYING INSURER
§ 32:9      Duty of excess insurer to drop down and provide insolvent
             insurer's coverage
§ 32:10     Duty of excess insurer to inquire about pending claims upon
             insolvency of underlying insurer

D.   DUTY TO DEFEND
§ 32:11      Duty to defend
§ 32:11.1    Eect of policy language obligating umbrella insurer to
              defend when underlying primary insurance does not
              provide coverage
§ 32:11.2    Policy language relieving excess insurer of duty to defend
§ 32:11.3    Cases allowing primary insurer to obtain reimbursement
              from excess insurer
§ 32:11.4    Cases allowing excess insurer to obtain reimbursement
              from primary insurer
§ 32:11.5    Primary insurer's duty when excess insurer refuses to
              defend
§ 32:11.6    Special rules applicable to automobile insurers
§ 32:11.7    Duty to advance defense costs
§ 32:11.8    Defense costs within policy limits: ultimate net loss
§ 32:11.9    Reservation of rights



                                                                      lxiii
                                    California Insurance Law Handbook

E.     NOTICE ISSUES
§ 32:12      Insured's or primary insurer's duty to notify excess insurer
§ 32:12.1    Excess insurer's duty to inquire upon insolvency of primary
              insurer

F.     OTHER INSURANCE ISSUES
§ 32:13     Other insurance issues

G.     POLICY INTERPRETATION
§ 32:14     Policy interpretation

H.     SUBROGATION
§ 32:15     Subrogation

I.     TRIGGER OF COVERAGE
§ 32:16      Trigger of coverage (“exhaustion” of underlying limits)
§ 32:16.1    Excess insurer's right to obtain pretrial discovery of
              policyholder's settlements with primary insurer's
§ 32:17      Eect of policies in single policy year: multiple policies in
              single policy year
§ 32:18      Eect of policies in single policy year: exhaustion of
              underlying “occurrence” limits v. exhaustion of underlying
              aggregate limits
§ 32:19      Eect of policies in single policy year: multiple policies in
              multiple policy years

J.     BROAD AS PRIMARY ENDORSEMENT
§ 32:20     “Broad as primary endorsement”

K.     PROCEDURE
§ 32:21     Procedure: case and controversy requirement
§ 32:22     Procedure: excess insurer's right to challenge settlement

CHAPTER 33. FIDELITY
§ 33:1      Allocation of coverage between covered and uncovered claims
§ 33:2      Employee dishonesty coverage
§ 33:2.1    Who is employee under employee dishonesty coverage
§ 33:3      Loss discovery requirement
§ 33:4      Late notice defense
§ 33:5      Third–party claims
§ 33:6      Regulatory exclusion



lxiv
Table of Contents

§ 33:7      Trading loss exclusion
§ 33:8      Stacking of coverage under successive employee dishonesty
             policies
§ 33:9      Trade secret theft

CHAPTER 34. FIDUCIARY DUTY
§ 34:1     Fiduciary duty

CHAPTER 35. FIRST–PARTY INSURANCE,
GENERAL ISSUES
§ 35:1     Causation
§ 35:2     Insurable interest
§ 35:3     Limitations periods: contractual
§ 35:4     Limitations periods: statutory
§ 35:5     Duty of insured to notify the insurer
§ 35:6     Duty of insured to cooperate
§ 35:7     Duty of insurer to investigate claims
§ 35:8     Duty of insurer to pay claims

A.   EXAMINATIONS UNDER OATH
§ 35:9      Examinations under oath
§ 35:9.1    Prejudice Requirement
§ 35:9.2    Privilege against self–incrimination
§ 35:9.3    Eect of insured's refusal to submit to examination on
             insurer's duty of good faith and fair dealing

B.   PROOF OF LOSS
§ 35:10       Proof of loss
§ 35:10.1     Misrepresentation and false swearing by insured
§ 35:10.2     Waiver of or estoppel to assert proof of loss
§ 35:11       Prejudice requirement
§ 35:11.1     No preemption of notice–prejudice rule

C.   TRIGGER OF COVERAGE
§ 35:12       Trigger of coverage
§ 35:12.1     Loss-in-progress or known loss rule

CHAPTER 36. GROUP HEALTH,
DISABILITY, AND LIFE INSURANCE
A.   IN GENERAL
§ 36:1     Background



                                                                     lxv
                                 California Insurance Law Handbook

§ 36:2    Arbitration

B.     INTERPRETATION OF GROUP POLICES
§ 36:3    Application of contra insurer rule
§ 36:4    Conicts between master policy and certiŽcate of insurance
§ 36:5    Conicts between group policy and sales literature

C.     CONVERSION RIGHTS
§ 36:6    Health and disability insurance
§ 36:7    Life insurance

D.     CONTINUATION COVERAGE
§ 36:8      Federal Continuation of Group Coverage Requirement
             (COBRA)
§ 36:9      Continuation of group coverage under Insurance Code
             § 12692
§ 36:10     Continued coverage after replacement policy obtained

E.     COORDINATION OF BENEFITS
§ 36:11      Coordination of beneŽts
§ 36:11.1    Reduction in beneŽts clause

F.     COST CONTAINMENT PRACTICES
§ 36:12     Cost containment practices

G.     ERISA
§ 36:13     Employee Retirement Income Security Act of 1974

H.     ENROLLMENT AND CLAIMS ADMINISTRATION
§ 36:14      Role of third–party administrators
§ 36:14.1    Bad faith implications

I.     RENEWALS
§ 36:15     Renewals: Notice of changes in coverage

J.     TERMINATION OF COVERAGE
§ 36:16     Rescission
§ 36:17     Eect of termination of employment
§ 36:18     Continued coverage under terminating insurer's policy after
             replacement policy obtained



lxvi
Table of Contents

§ 36:19     Reduction in coverage upon eligibility for medicare

K.   MEDICARE SUPPLEMENT AND LONG–TERM
     CARE
§ 36:20      Insurance generally purchased by older Californians:
              Medicare supplement insurance and long–term care
              insurance
§ 36:20.1    Marketing practices regulation/consumer protection
§ 36:20.2    Underwriting/preexisting conditions

L.   SMALL EMPLOYER HEALTH INSURANCE
     PROGRAM
§ 36:21      Small employer health insurance
§ 36:21.1    Marketing/small employer's right to purchase
§ 36:21.2    Marketing/small employer's right to purchase: Rescission
              based on material misrepresentation
§ 36:21.3    Rates
§ 36:21.4    Renewal
§ 36:21.5    Preexisting conditions and waiting period provisions

CHAPTER 37. HEALTH INSURANCE
A.   ANTITRUST
§ 37:1      Antitrust
§ 37:1.1    Immunity under California antitrust laws
§ 37:1.2    Common law doctrine of fair procedure

B.   ARBITRATION
§ 37:2      Arbitration Clauses—Enforceability
§ 37:2.1    —Scope
§ 37:2.2    Federal Arbitration Act preemption of California's statutory
             disclosure requirements
§ 37:2.3    Medicare Act preemption of California's statutory disclosure
             requirements
§ 37:3      Duty to advise insured

C.   TORT AND STATUTORY LIABILITY FOR
     MEDICAL REVIEW AND OTHER COST-
     CONTAINMENT PROCEDURES
§ 37:4     Tort liability
§ 37:5     Statutory liability
§ 37:6     Federal preemption



                                                                     lxvii
                                  California Insurance Law Handbook

§ 37:7     Removal to Federal District Court

D.       INTERIM OR TEMPORARY COVERAGE
§ 37:8     Interim or temporary coverage

E.       EXCLUSIONS
§ 37:9      Mental illness exclusion
§ 37:10     Preexisting conditions
§ 37:11     Third-party liability
§ 37:12     Workers' compensation
§ 37:13     Pregnancy
§ 37:14     Bypass exclusion
§ 37:15     Experimental or investigational
§ 37:16     Sexual dysfunction drugs
§ 37:17     Fertility treatments

F.       SCOPE OF COVERAGE
§ 37:18      Accident coverage
§ 37:18.1    Medical necessity
§ 37:18.2    Medical necessity: retrospective review
§ 37:18.3    Limitation on who may prescribe treatment
§ 37:18.4    Interpretation of terms aecting scope of coverage
§ 37:18.5    Dependent coverage

G.       MISTAKEN PAYMENTS
§ 37:19     Mistaken payments

H.       PERSONS INSURED: NEWBORN INFANTS
§ 37:20     Persons insured: newborn infants

I.   REIMBURSEMENT
§ 37:21      Reimbursement; liens and third-party liability clauses;
              subrogation
§ 37:21.1    Attorney liability for failure to disburse funds to insurer
§ 37:21.2    Insurer liability for failure to disburse funds to hospital
§ 37:21.3    Federal preemption of a health insurer's reimbursement
              rights

J.       PROHIBITION AGAINST BALANCED BILLING
§ 37:22     Prohibition against Balanced Billing

K.       TERMINATION OF COVERAGE
§ 37:23     Termination of coverage: vesting of beneŽts



lxviii
Table of Contents

§ 37:24     Rescission and post-claim underwriting

L.   OTHER INSURANCE ISSUES
§ 37:25     Other insurance issues

CHAPTER 38. HOMEOWNERS INSURANCE
A.   HOMEOWNERS INSURANCE—IN GENERAL
§ 38:1     Assignability
§ 38:2     Burglary and theft insurance
§ 38:3     Causation: Concurrence of excluded and covered perils
§ 38:4     Exclusions
§ 38:5     Insurable interest
§ 38:6     Insureds

B.   ‘‘DWELLING’’ COVERAGE
§ 38:7      ‘‘Other structures’’
§ 38:7.1    Land
§ 38:7.2    Lateral support

C.   EARTHQUAKE
§ 38:8      Earthquake insurance
§ 38:8.1    Condominiums
§ 38:8.2    Cancellation based on insured's acceptance
§ 38:8.3    Coverage under policies not containing earthquake
             insurance provision
§ 38:8.4    Private rights of action under California earthquake
             insurance

D.   MEDICAL PAYMENTS
§ 38:9     Medical payments

E.   MEASURE OF RECOVERY
§ 38:10      Diminution in value
§ 38:11      Consequential damages
§ 38:12      Actual cash value
§ 38:13      Actual cash value when property lacks market value
§ 38:13.1    Coinsurance clauses
§ 38:13.2    Reduction in coverage for deferred maintenance and
              depreciation
§ 38:14      Replacement cost



                                                                   lxix
                                   California Insurance Law Handbook

§ 38:14.1     Time and place of replacement
§ 38:14.2     Code upgrades
§ 38:15       Investigation costs

F.    APPRAISALS
§ 38:16     Validity
§ 38:17     Subject matter
§ 38:18     QualiŽcations of appraisers

G.    CROSS–REFERENCES
§ 38:19     Notice
§ 38:20     Personal liability insurance
§ 38:21     Proof of loss
§ 38:22     Trigger of coverage

H.    WORKERS' COMPENSATION
§ 38:23     Workers' compensation endorsement

CHAPTER 39. INNOCENT COINSUREDS
A.    FIRST-PARTY COVERAGE
§ 39:1     First–party coverage

B.    LIABILITY INSURANCE
§ 39:2      Liability insurance
§ 39:2.1    Negligent supervision and entrustment

C.    ‘‘JOINT OBLIGATIONS’’ CLAUSE
§ 39:3     “Joint obligations” clause

CHAPTER 40. INSOLVENCY
A.    IN GENERAL
§ 40:1     Background
§ 40:2     Grounds for initiating conservatorship proceedings

B.    CONSERVATION AND LIQUIDATION
§ 40:3        Conservation and liquidation proceedings
§ 40:3.1      Conservation order
§ 40:3.2      Authority and duty of insurance commissioner



lxx
Table of Contents

§ 40:3.3     Authority and duty of insurance commissioner:
              Commissioner's authority to settle disputes among
              claimants
§ 40:3.4     Authority and duty of insurance commissioner: Authority of
              insurance commissioner to marshal assets
§ 40:3.5     Jurisdiction of liquidation court
§ 40:3.6     Right to jury trial in liquidation proceedings
§ 40:3.7     Court's discretionary power to issue orders assisting
              commissioner
§ 40:3.8     Liquidation order and notice of time for Žling claims
§ 40:3.9     Liquidation order and notice of time for Žling claims:
              Applicable law
§ 40:3.10    Commissioner's duty to provide notice of liquidation
§ 40:3.11    Timeliness of claims
§ 40:3.12    Timeliness of claims: secured creditors
§ 40:3.13    Timeliness of claims: guaranty associations
§ 40:3.14    Timeliness of claims: life insurers
§ 40:3.15    Who may Žle claims
§ 40:3.16    Who may Žle claims: Setos
§ 40:3.17    Setos: Statutory exceptions to right of seto
§ 40:3.18    Valuation of contingent policy rights
§ 40:3.19    Attorney fees
§ 40:3.20    Priority of payment
§ 40:3.21    Priority of payment: federal superpriority
§ 40:3.22    Priority of payment: guaranteed investment contracts
§ 40:3.23    Priority of payment: assignments of statutory priority

C.   CALIFORNIA INSURANCE GUARANTEE
     ASSOCIATION
§ 40:4      Covered claims
§ 40:4.1    When insured has uninsured motorist coverage available
§ 40:4.2    Against insolvent uninsured motorist carrier
§ 40:5      Excluded claims
§ 40:6      Credit for uninsured motorist beneŽts
§ 40:7      Credit for federal social security disability beneŽts or state
             unemployment compensation beneŽts
§ 40:8      Loss adjustment expenses
§ 40:9      Tort liability
§ 40:10     Right to reimbursement when CIGA breaches duty to defend
             or to pay claims
§ 40:11     Liability for default or stipulated judgments

D.   CALIFORNIA LIFE AND HEALTH INSURANCE
     GUARANTEE ASSOCIATION
§ 40:12     Scope of coverage



                                                                       lxxi
                                  California Insurance Law Handbook

§ 40:13     BeneŽts limitations

E.      OTHER SOURCES OF RECOVERY
§ 40:14     Agent and broker liability when insolvent insurer is admitted
             to do business in California
§ 40:15     Agent and broker liability when insolvent insurer is not
             admitted to do business in California
§ 40:16     Liability of entities that provide information to agents and
             brokers
§ 40:17     Reinsurance
§ 40:18     Direct actions against those responsible for carrier's demise
§ 40:19     Subrogation actions

CHAPTER 41. INSURANCE COMPANY
ORGANIZATION
§ 41:1     Background
§ 41:2     Stock insurance companies
§ 41:3     Mutual insurance companies
§ 41:4     Reciprocal insurers
§ 41:5     Withdrawal of insurance companies from the California
            marketplace
§ 41:6     Insurance company reorganizations

CHAPTER 42. INSURANCE FRAUD
§ 42:1     Attorney liability
§ 42:2     Insurer's obligation to report suspected fraud
§ 42:3     Insurer's right to recover damages for fraud: Detrimental
            reliance requirement
§ 42:4     Rescission

CHAPTER 43. INSUREDS AND INSURABLE
INTEREST
A.      IN GENERAL
§ 43:1      Insureds generally
§ 43:1.1    Contractual liability endorsement
§ 43:1.2    Successors in interest

B.      INSURABLE INTEREST
§ 43:2     Standing to challenge insurable interest
§ 43:3     Life insurance
§ 43:4     Property insurance



lxxii
Table of Contents

C.   TERMINATION OF INSURABLE INTEREST
§ 43:5     Transfer of ownership before loss
§ 43:6     Transfer of ownership after loss
§ 43:7     Extinguishment of debt
§ 43:8     Bankruptcy of insured—Eect on insured's rights against
            insurer

CHAPTER 44. LIABILITY INSURANCE,
GENERAL ISSUES
A.   POLICY LANGUAGE
§ 44:1      Policy language
§ 44:1.1    Pre-1966 accident policies
§ 44:1.2    1966 CGL policy
§ 44:1.3    1973 CGL form
§ 44:1.4    1986 CGL policy

B.   AFTER ACQUIRED CORPORATIONS
     COVERAGE
§ 44:2     Applicability of predecessor corporation's products liability
            insurance to cover liability of successor corporation
§ 44:3     Applicability of corporation's products liability insurance to
            liability of corporation acquired after expiration of policy

C.   ASSIGNMENT
§ 44:4     Anti-assignment clauses

D.   COLLATERAL ESTOPPEL
§ 44:5      Collateral estoppel eect of liability action on coverage
             dispute
§ 44:6      Collateral estoppel eect of declaratory relief action
§ 44:7      Collateral estoppel eect of criminal conviction or nolo
             contendere plea on coverage dispute
§ 44:7.1    Evidentiary eect of criminal conviction or nolo contendere
             plea where collateral estoppel denied
§ 44:8      Collateral estoppel eect of private, nonjudicial arbitration
             proceeding
§ 44:9      Contractual liability endorsement

E.   DUTY TO COOPERATE
§ 44:10     Duty to cooperate



                                                                        lxxiii
                                 California Insurance Law Handbook

F.      DUTY TO DEFEND
§ 44:11     Duty to defend

G.      DUTY TO INDEMNIFY
§ 44:12      Duty to indemnify
§ 44:12.1    SigniŽcance of distinction between categorizing expenses as
              cost of defense or a cost of indemnity
§ 44:12.2    Allocation between covered and uncovered claims
§ 44:12.3    SigniŽcance of imposing burden of proof on policyholder
              where covered and uncovered damage cannot be
              dierentiated

H.      DUTY TO SETTLE
§ 44:13      Duty of good faith and fair dealing
§ 44:14      Insurer's duty to reimburse insured for settlements within
              policy limits
§ 44:14.1    Insurer's obligation to pay settlements entered into by
              insured's independent counsel
§ 44:15      Insured's obligation to reimburse insurer when policy does
              not provide coverage
§ 44:16      Insurer's right to obtain reimbursement from third-party
              claimant when policy does not provide coverage

I.      ESTOPPEL
§ 44:17     Estoppel

J.      EXCLUSIONS
§ 44:18     Exclusions

K.      INSURING AGREEMENT, IN GENERAL
§ 44:19      Requirement that insurer be “legally liable”
§ 44:19.1    Is insured “legally liable” to pay contract damages
§ 44:20      “Damages”

L.      PRE-1966 ACCIDENT POLICIES
§ 44:21     Suddenness requirement
§ 44:22     Accidental from whose perspective

M.      1966 AND 1986 OCCURRENCE POLICIES
§ 44:23      Accident requirement
§ 44:23.1    Eect of insured's mental incapacity



lxxiv
Table of Contents

§ 44:24      Accidental event requirement
§ 44:25      Accident or event requirement
§ 44:26      Requirement that injury or damage be neither expected nor
              intended
§ 44:26.1    Subjective standard for determining expectation or intent
§ 44:26.2    Kinds and degrees of damage
§ 44:26.3    Corporate expectation or intent
§ 44:26.4    Insurance Code § 533 compared
§ 44:26.5    Intentional acts taken in self-defense
§ 44:26.6    Local government self-insuring pools
§ 44:27      Burden of proof
§ 44:28      Number of occurrences
§ 44:29      Bodily injury
§ 44:29.1    Bodily injury resulting from economic loss is not covered
§ 44:29.2    Bodily injury “sustained by a person”
§ 44:30      Property damage
§ 44:30.1    Tangible property qualiŽcation: no coverage for purely
              economic loss
§ 44:30.2    Incorporation of defective product or work as property
              damage
§ 44:30.3    Incorporation of defective product or work as property
              damage: signiŽcance of physical injury qualiŽcation
§ 44:30.4    Property damage need not occur while claimant owns
              property
§ 44:30.5    Requirement that insured be liable for damage when
              damage occurs
§ 44:30.6    Cost of preventing property damage
§ 44:30.7    Loss of use

N.   NO ACTION CLAUSES
§ 44:31     No action clauses

O.   NOTICE REQUIREMENTS
§ 44:32     Notice requirements

P.   POLICY LIMITS
§ 44:33      Aggregate v. per occurrence or per claim limits
§ 44:34      Defense costs within policy limits
§ 44:34.1    Stacking of per occurrence limits
§ 44:34.2    Noncumulation clause
§ 44:34.3    Stacking of coverage under policy covering “acts, errors or
              omissions during the policy period”
§ 44:34.4    Stacking of per claim limits



                                                                      lxxv
                                  California Insurance Law Handbook

Q.      REFORMATION
§ 44:35     Reformation

R.      TRIGGER OF COVERAGE
§ 44:36        Trigger of coverage
§ 44:36.1      Montrose Chemical Co. v. Admiral Insurance Co.: the
                California Supreme Court's continuous trigger ruling
§ 44:36.2      Montrose Chemical Co. v. Admiral Insurance Co.:
                applicability of Montrose continuous trigger to duty to
                indemnify
§ 44:36.3      Montrose Chemical Co. v. Admiral Insurance Co.:
                applicability of Montrose continuous trigger to disputes
                between insurers
§ 44:36.4      Montrose Chemical Co. v. Admiral Insurance Co.: non-
                standard policy language
§ 44:36.5      Montrose Chemical Co. v. Admiral Insurance Co.: bodily
                injury cases decided prior to Montrose
§ 44:36.6      Montrose Chemical Co. v. Admiral Insurance Co.: property
                damage cases decided prior to Montrose
§ 44:36.7      Property damage that occurs when claimant does not own
                property
§ 44:36.8      Separate and distinct damage or injury
§ 44:36.9      Malicious prosecution claims
§ 44:36.10     Professional malpractice claims
§ 44:36.11     Loss-in-progress: California Supreme Court's holding in
                Montrose Chemical v. Admiral Insurance Co.
§ 44:36.12     Loss-in-progress: cases prior to Montrose Chemical v.
                Admiral Insurance Co.
§ 44:36.13     Apportionment of indemnity obligation among multiple
                policies in multiple policy years
§ 44:36.14     Apportionment of indemnity obligation among multiple
                policies in multiple policy years: eect of settlement by
                one insurer on liability of remaining nonsettling insurers
§ 44:36.15     Apportionment of indemnity obligation among multiple
                policies in multiple policy years: eect of insurer
                insolvency

S.      IN GENERAL
§ 44:37     Vicarious liability of innocent coinsureds
§ 44:38     Supplementary payments clause
§ 44:39     Voluntary payments clause

CHAPTER 45. LIABILITY INSURANCE,
EXCLUSIONS
§ 45:1       Aircraft



lxxvi
Table of Contents

§ 45:2      Alienated premises
§ 45:3      Automobile
§ 45:4      Asbestos exclusion
§ 45:5      Assault and battery
§ 45:6      Business pursuits
§ 45:6.1    Business operations
§ 45:7      Business risk exclusions (insured's product, insured's work
             or work performed, product recall, design defect)
§ 45:8      Condemnation or inverse condemnation
§ 45:9      Contractual liability exclusion
§ 45:9.1    “Liability assumed under contract”
§ 45:10     Criminal acts
§ 45:11     Cross suits exclusion
§ 45:12     Dram shop
§ 45:13     Employee exclusion: bodily injury
§ 45:14     Employment-related practices
§ 45:14.1   Employment practices exclusion limited to insured's own
             employees
§ 45:15     Employee dishonesty exclusion
§ 45:16     Family or household: scope
§ 45:17     Bodily injury to insured: application to wrongful death
             claims
§ 45:18     Firearms
§ 45:19     Intentional or willful act: public policy [Insurance Code
             § 533]
§ 45:20     Illegal acts
§ 45:20.1   Illegal activity
§ 45:21     Insured versus insured
§ 45:22     Other premises or residence
§ 45:23     Public livery exclusion
§ 45:24     Property in care, custody, and control of insured
§ 45:25     Property owned, used, or controlled by the insured
§ 45:26     Design defect exclusion
§ 45:27     Named insured's products or own products
§ 45:28     Joint venture
§ 45:29     1986 “absolute” pollution exclusion
§ 45:29.1   “Absolute” exclusion is not always absolute
§ 45:29.2   Application of absolute pollution exclusion to workplace
             injuries and products liability claims
§ 45:30     1973 “Limited” pollution exclusion
§ 45:30.1   No distinction between active and passive polluters
§ 45:30.2   SigniŽcance of preventative measures
§ 45:30.3   Policyholder has burden of proving applicability of “sudden
             and accidental” exception to pollution exclusion
§ 45:31     Product recall or sistership



                                                                   lxxvii
                                 California Insurance Law Handbook

§ 45:32      Insured's product and insured's work or work performed
              exclusions
§ 45:33      Loss of use resulting from delay/failure to perform
              exclusion
§ 45:34      Loss of use resulting from quality, Žtness or durability of
              named insured's product exclusion
§ 45:35      Impaired property exclusion
§ 45:35.1    Sudden and accident exception
§ 45:36      Property on which operations are being performed
              exclusion
§ 45:37      Faulty workmanship exclusion
§ 45:38      Incorrectly performed work exclusion
§ 45:39      Professional services exclusion
§ 45:40      Regulatory exclusion
§ 45:41      Sexual behavior or intimacy
§ 45:42      Subsidence
§ 45:43      Claims unreported during term of occurrence policy when
              insured obtains similar insurance after termination of
              policy
§ 45:44      Watercraft
§ 45:45      Watercourse exclusion
§ 45:46      Workers' compensation exclusion
§ 45:47      Sale or transfer of real property

CHAPTER 46. LIABILITY INSURANCE,
DUTY TO DEFEND
A.    INTRODUCTION AND BACKGROUND
§ 46:1     Introduction and background

B.    ALLOCATION AND APPORTIONMENT OF
      DEFENSE COST
§ 46:2      Allocation of defense costs between covered and uncovered
             claims or uncovered portions of a claim
§ 46:3      Apportionment of defense costs among multiple insurers
§ 46:3.1    Insured's obligation to contribute
§ 46:3.2    Illustrative cases permitting contribution of defense costs
§ 46:3.3    Special rules applicable to automobile insurers
§ 46:3.4    Eect of insurer insolvency
§ 46:3.5    Eect of breach of duty to defend
§ 46:4      Apportionment of pre-tender defense costs among multiple
             insurers



lxxviii
Table of Contents

C.   BAD FAITH
§ 46:5     Bad faith (extra-contractual liability for breach of duty to
            defend)

D.   CIGA
§ 46:6     California Insurance Guaranty Association (CIGA)

E.   CONFLICT OF INTEREST
§ 46:7        Insurer's duty to provide independent adjusters
§ 46:7.1      Civil Code § 2860
§ 46:7.2      Civil Code § 2860: retroactive applications of Civil Code
               § 2860
§ 46:7.3      Civil Code § 2860: insurer's burden of establishing absence
               of conict requiring independent counsel
§ 46:7.4      Conicts of interest requiring insurer to pay for
               independent counsel
§ 46:7.5      Conicts of interest requiring insurer to pay for
               independent counsel: insurer's right to investigate conict
               before agreeing to pay for Cumis counsel
§ 46:7.6      Defense counsel's duty to inform insured of conict
§ 46:7.7      Defense counsel's duty to inform insured of conict: when
               providing a courtesy defense
§ 46:7.8      Declaratory relief to determine rights and liabilities under
               Civil Code § 2860
§ 46:7.9      Declaratory relief to determine rights and liabilities under
               Civil Code § 2860: evidentiary issues
§ 46:7.10     Arbitration of disputes over amount of independent
               counsel's fees
§ 46:7.11     Insurer's right to determine independent counsel's
               qualiŽcations
§ 46:7.12     Insurer's right to interfere with independent counsel's
               handling of defense
§ 46:7.13     One attorney representing multiple insureds
§ 46:7.14     Insurance company house counsel
§ 46:7.15     Do “outside counsel guidelines” impair the independence of
               defense counsel?
§ 46:8        Insurer's duty when providing a courtesy defense
§ 46:9        Compensatory damages for insurer's breach of its duty to
               provide a conict-free defense

F.   REMEDIES
§ 46:10        Compensatory damages for inadequate defense
§ 46:10.1      Trial within a trial requirement



                                                                          lxxix
                                  California Insurance Law Handbook

§ 46:11        Compensatory damages for refusal to defend
§ 46:11.1      Excess judgment or settlement
§ 46:11.2      California Insurance Guarantee Association's liability for
                settlement within statutory limits
§ 46:11.3      Damages excluded from coverage
§ 46:11.4      Consequential damages
§ 46:11.5      Defense costs
§ 46:11.6      Defense costs: allocable to noncovered claims
§ 46:11.7      Defense costs: contingency fees as part of defense costs
§ 46:11.8      Defense costs: when insured is state agency
§ 46:11.9      Eect of no policy limits
§ 46:11.10     Eect of insured's insolvency
§ 46:11.11     Eect of defense by other insurers
§ 46:11.12     Loss of right to obtain relief from judgment based on
                “mistake, inadvertence, surprise or excusable neglect”
§ 46:11.13     Failure to defend and refusal to settle
§ 46:11.14     Punitive damages
§ 46:11.15     Insured's burden of proving damages resulting from
                failure to defend or from inadequate defense
§ 46:12        Equitable remedies against insurer for breach of duty to
                defend

G.     EXCESS INSURERS
§ 46:13      Excess insurers' duty to defend
§ 46:13.1    Reservation of rights

H.     FIRST-PARTY COVERAGE
§ 46:14     First-party coverage: duty to contribute to defense costs
             under “sue and labor” clause

I.     INDEMNITY COVERAGE
§ 46:15     No duty to defend
§ 46:16     Duty to advance costs
§ 46:17     Eect of self-consuming policy limits

J.     INSURANCE DEFENSE COUNSEL
§ 46:18        Insurance defense counsel
§ 46:18.1      DisqualiŽcation
§ 46:18.2      Ethical duties
§ 46:18.3      Liability of insurer-appointed defense counsel for
                insurance bad faith
§ 46:18.4      No liability for conspiracy to violate covenant of good faith
                and fair dealing



lxxx
Table of Contents

§ 46:18.5     Liability of insurer-appointed defense counsel for
               breaching duties owed directly to insured
§ 46:18.6     —Right to seek indemnity from independent counsel
§ 46:18.7     —Insurer's vicarious liability for malpractice of insurer-
               appointed attorney
§ 46:18.8     Legal malpractice liability to insurer
§ 46:18.9     Liability to insurer for insurance bad faith
§ 46:18.10    House counsel
§ 46:18.11    Duties of defense counsel when providing courtesy defense
§ 46:18.12    Coverage counsel's liability to third party claimants for
               misrepresenting scope of coverage

K.   PROCEDURAL ISSUES
§ 46:19      Declaratory relief to determine duty to defend
§ 46:19.1    Appeal of order compelling insurer to defend
§ 46:20      Interpleader
§ 46:21      Standing to sue for failure to defend
§ 46:21.1    Eect of another insurer assuming insured's defense
§ 46:22      Statute of limitations on action for breach of duty to defend

L.   REIMBURSEMENT OF DEFENSE COSTS
§ 46:23      Reimbursement of defense costs: insurer's right to recover
              after absence of coverage established
§ 46:23.1    Equitable restitution
§ 46:23.2    Reservation of rights to seek reimbursement
§ 46:23.3    Reimbursement under an indemnity policy
§ 46:23.4    Right to jury trial

M.   RESERVATION OF RIGHTS TO DENY
     COVERAGE AFTER DEFENDING INSURED
§ 46:24      Adequacy of reservation of rights
§ 46:25      Eect of reservation of rights
§ 46:26      Nonwaiver agreements distinguished
§ 46:27      Defense without reservation of rights
§ 46:27.1    Burden of proof
§ 46:28      Waiver of or estoppel to assert defenses asserted
§ 46:29      Waiver of or estoppel to assert defenses not asserted
§ 46:29.1    Waiver and estoppel cases decided prior to Waller
§ 46:30      Suciency of defense under reservation of rights
§ 46:31      Excess insurer's duty to reserve rights
§ 46:32      Reservation of rights to seek contribution from other
              insurers

N.   SCOPE OF DUTY TO DEFEND
§ 46:33       Scope of duty to defend



                                                                      lxxxi
                                  California Insurance Law Handbook

§ 46:33.1      Insurer's duty to provide adequate defense
§ 46:33.2      Insurer's duty to provide adequate defense: duty to pursue
                counterclaims
§ 46:33.3      Duty to appeal
§ 46:33.4      Allegations not covered by the policy
§ 46:33.5      Allegations not covered by the policy: allegations in
                underlying action when covered claims are in
                cross-complaint
§ 46:33.6      Allegations not covered by the policy: insurer's continuing
                duty to defend uncovered claims after covered claims are
                resolved
§ 46:33.7      Allegations not covered by the policy: duty of title insurers
                to defend allegations not covered by policy
§ 46:33.8      Time duty to defend is determined
§ 46:33.9      Insurer's duty to determine whether defense is owed
§ 46:33.10     Insurer's duty to determine whether defense is owed:
                insurer's continuing duty to investigate whether duty to
                defend exists
§ 46:33.11     Insurer's duty to determine whether defense is owed:
                insurer's duty to pay insured's investigational costs

O.       INCEPTION OF DUTY TO DEFEND
§ 46:34     Upon tender of insured's defense
§ 46:35     Eect of insurer's denial of coverage on insurer's duty to
             tender defense
§ 46:36     Eect of insured's late notice on insurer's duty to defend
§ 46:37     Insurer's liability for pre-tender defense costs
§ 46:38     Insurer's duty to defend pre-litigation claims
§ 46:39     Duty to defend “suits”
§ 46:40     Duty to defend “actions” and “arbitrations”

P.       TERMINATION OF DUTY TO DEFEND
§ 46:41      Judicial determination that policy does not provide
              coverage
§ 46:41.1    Permissibility of multiple motions for summary
              adjudication of duty to defend
§ 46:42      Judicial determination that potentially covered claims in
              underlying action are “sham” claims
§ 46:43      Eect of judicial determination eliminating potentially
              covered claims
§ 46:43.1    Judicial determination unnecessary where insurer never
              had duty to defend
§ 46:44      Eect of settlement of potentially covered claims
§ 46:45      Termination of insurer's duty to defend upon exhaustion of
              policy limits



lxxxii
Table of Contents

§ 46:45.1    Payment of policy limits on behalf of one insured
              terminates insurer's duty to defend other insureds
§ 46:46      Eect of insured's refusal to cooperate on insurer's duty to
              defend
§ 46:47      Insured's right to terminate defense by withdrawing tender
              of defense

Q.   DUTY TO DEFEND POTENTIALLY COVERED
     CLAIMS
§ 46:48      Duty extends only to insureds
§ 46:48.1    Duty extends to additional insureds
§ 46:49      Duty to defend based on insured's reasonable expectations
§ 46:50      Duty to defend any potentially covered claim
§ 46:50.1    Illustrative cases Žnding potential for coverage
§ 46:50.2    Illustrative cases Žnding no potential for coverage
§ 46:51      Potential for coverage based on evidence extrinsic to
              complaint
§ 46:52      Potential for coverage based on facts unrelated to liability
§ 46:53      Potential for coverage based on unresolved questions of law
§ 46:54      Potential for coverage based on unpled claims
§ 46:55      Potential for coverage based on conduct independent of or
              separable from inherently wrongful conduct
§ 46:56      No potential for coverage based on nature of wrong alleged
§ 46:57      No potential coverage where no coverage as matter of law
§ 46:57.1    No potential for coverage based on statutory prohibition
              against indemniŽcation
§ 46:58      Criminal proceedings
§ 46:59      Disciplinary hearings
§ 46:60      Related proceedings
§ 46:61      Duty to defend against equitable claims
§ 46:62      Duty to defend frivolous or unmeritorious claims
§ 46:62.1    Duty to defend where statute of limitations bars underlying
              claim
§ 46:63      Cross claims and armative defenses against insured in
              suit brought by insured

R.   PRE-TENDER DEFENSE COSTS
§ 46:64     Indemnity policies
§ 46:65     General liability policies
§ 46:66     Contribution actions between insurers
§ 46:67     Policy language negating duty
§ 46:68     Pre-litigation claims expenses



                                                                   lxxxiii
                                  California Insurance Law Handbook

CHAPTER 47. LIABILITY INSURANCE,
ADVERTISING INJURY COVERAGE
A.   BACKGROUND
§ 47:1     Background

B.   PREDICATE OFFENSES: 1976 BROAD FORM
     ENDORSEMENT
§ 47:2      Business and Professions Code § 17200, fall within coverage
             for “unfair competition”
§ 47:2.1    Cases examining whether consumer fraud and/or negligent
             misrepresentation claims fall within coverage for “unfair
             competition”
§ 47:2.2    Cases examining whether interference with economic
             relations claims fall within coverage for “unfair
             competition”
§ 47:2.3    Cases examining whether patent infringement claims fall
             within coverage or “unfair competition,” “piracy” or
             “infringement of title”
§ 47:2.4    Cases examining whether misappropriation of trade name
             claims fall within coverage for infringement of title or
             slogan

C.   PREDICATE OFFENSES: 1986 BROAD FORM
     ENDORSEMENT
§ 47:3      1986 Policy
§ 47:3.1    Patent infringement
§ 47:3.2    Trade dress and trademark infringement
§ 47:3.3    Trade secret misappropriation
§ 47:3.4    Business torts

D.       CAUSATION
§ 47:4     Causal connection to injury requirement

E.   ADVERTISING
§ 47:5     Advertising activity

F.   TRIGGER OF COVERAGE
§ 47:6     Oense committed during policy period



lxxxiv
Table of Contents

CHAPTER 48. LIABILITY INSURANCE,
PERSONAL INJURY COVERAGE
A.   INTRODUCTION
§ 48:1     Introduction and background

B.   EMOTIONAL DISTRESS CLAIMS
§ 48:2     Emotional distress claims

C.   INVASIONS OF RIGHTS OF PRIVATE
     OCCUPANCY
§ 48:3      Environmental claims
§ 48:4      Limited to interference with real property
§ 48:4.1    Future interests in property
§ 48:4.2    May not apply to claims brought by organizations
§ 48:5      Breach of contract and misrepresentation claims
§ 48:6      Breach of Žduciary duty claims

D.   DISPARAGEMENT, DEFAMATION, AND
     SLANDER CLAIMS
§ 48:7     Patent infringement claims
§ 48:8     Product disparagement, trade libel, and disparagement of title
            claims

E.   MALICIOUS PROSECUTION AND ABUSE OF
     PROCESS CLAIMS
§ 48:9      Malicious prosecution claims
§ 48:9.1    Abuse of process claims

F.   MISCELLANEOUS CLAIMS
§ 48:10     Sex discrimination claims
§ 48:11     Violation of privacy: Sexual harassment claims
§ 48:12     Wrongful termination claims
§ 48:13     Liability for promissory fraud based on sale of personal
             injury coverage

G.   PRIOR PUBLICATION EXCLUSION
§ 48:14     Prior publication exclusion



                                                                       lxxxv
                                   California Insurance Law Handbook

CHAPTER 49. LIABILITY INSURANCE,
PRODUCTS, COMPLETED OPERATIONS
AND PREMISES LIABILITY COVERAGES
§ 49:1      Premises operations, completed operations, and products
             liability coverages compared and contrasted
§ 49:2      Premises operations coverage: Scope
§ 49:3      Products—Completed operations hazard coverage: Scope
§ 49:3.1    Products hazard coverage: Named insured's products
§ 49:4      Products hazard exclusion
§ 49:4.1    Other relevant exclusions
§ 49:5      Vendor's endorsement
§ 49:5.1    Labeling and relabeling exclusion
§ 49:5.2    Product alteration exclusion
§ 49:6      Applicability of predecessor corporation's products liability
             insurance to cover liability of successor corporation
§ 49:7      Applicability of corporation's products liability insurance to
             liability of corporation acquired after expiration of policy
§ 49:8      Property damage
§ 49:9      Trigger of coverage

CHAPTER 50. LIABILITY INSURANCE,
COVERAGE FOR INTENTIONAL AND
CRIMINAL ACTS
A.   POLICY LANGUAGE
§ 50:1      Policies: Background and policy language
§ 50:1.1    Comprehensive business liability policies
§ 50:1.2    Comprehensive business liability policies: Pre–1966 accident
             policies
§ 50:1.3    Comprehensive business liability policies: 1966 Occurrence
             policy
§ 50:1.4    Personal liability policies
§ 50:1.5    Statutory exclusions
§ 50:1.6    Judicial interpretation of policy language

B.   OCCURRENCE DEFINITION
§ 50:2     Accident requirement
§ 50:3     Requirement that injury be neither expected nor intended
            from the standpoint of the insured

C.   STATUTORY PROHIBITIONS AGAINST
     COVERAGE FOR INTENTIONAL OR WILLFUL
     ACTS
§ 50:4      Insurance Code § 533



lxxxvi
Table of Contents

§ 50:4.1    Local government self–insuring pools
§ 50:4.2    Vicarious liability
§ 50:4.3    Estoppel to deny coverage
§ 50:4.4    Duty to defend
§ 50:4.5    Insurance Code § 533.5
§ 50:5      Civil Code § 1668
§ 50:6      Civil Code § 2773

D.   EFFECT OF INSURED'S LACK OF CAPACITY
§ 50:7     Eect of insured's insanity
§ 50:8     Eect of insured's intoxication

CHAPTER 51. LIABILITY INSURANCE,
CONSTRUCTION DISPUTES
§ 51:1     Requirement that injury or damage occur during policy period
            (trigger of coverage)
§ 51:2     Completed operations coverage (trigger of coverage)
§ 51:3     Policy limits and deductibles (number of occurrences)
§ 51:4     Relevant exclusions
§ 51:5     Subrogation issues
§ 51:6     Coverage conditioned on insured obtaining additional liability
            coverage from subcontractors

CHAPTER 52. LIABILITY INSURANCE,
EMPLOYMENT LIABILITY
A.   BACKGROUND AND INTRODUCTION
§ 52:1     Background and introduction

B.   BREACH OF CONTRACT
§ 52:2     Breach of contract claims

C.   EMOTIONAL DISTRESS
§ 52:3     Emotional distress claims

D.   EMPLOYMENT DISCRIMINATION CLAIMS
§ 52:4     CGL coverage
§ 52:5     Personal injury coverage
§ 52:6     Coverage under employer's liability portion of workers'
            compensation policy
§ 52:7     Directors and ocers liability coverage



                                                                     lxxxvii
                                    California Insurance Law Handbook

§ 52:8     Sexual harassment claims

E.    WRONGFUL TERMINATION CLAIMS
§ 52:9      CGL coverage
§ 52:9.1    Complaint alleging negligent conduct
§ 52:10     Personal injury coverage
§ 52:11     Professional liability insurance
§ 52:12     Workers' compensation coverage
§ 52:13     Coverage for equitable indemnity claims under employers
             liability portion of workers' compensation policy

F.    EXCLUSIONS
§ 52:14      Business pursuits
§ 52:15      Employee
§ 52:16      Employment–related practices
§ 52:16.1    Employment practices exclusion limited to insured's own
              employees
§ 52:17      Workers' compensation

CHAPTER 53. LIABILITY INSURANCE,
ENVIRONMENTAL CLAIMS
A.    DUTY TO PAY ‘‘DAMAGES’’
§ 53:1      Costs of complying with government order
§ 53:2      Costs of reimbursing government for clean–up costs
§ 53:3      Requirement that insured be ‘‘legally obligated’’ to pay
             damages—No coverage for compliance with administrative
             orders
§ 53:3.1    Coverage for compliance with administrative orders under
             excess/umbrella policies
§ 53:3.2    Funds paid to settle lawsuit are not “damages” within
             meaning of liability policy insurer has no duty to indemnify
§ 53:4      Diminished Value of Property in Eminent Domain
             Proceeding Due to Environmental Contamination
§ 53:5      No coverage when pollution damage is expected or intended
§ 53:6      Policy limits and deductibles (number of occurrences)
§ 53:7      Requirement that injury or damage occur during policy
             period (trigger of coverage)

B.    DUTY TO DEFEND
§ 53:8      Scope
§ 53:9      Duty to defend ‘‘suits’’
§ 53:10     Duty to defend ‘‘actions’’ and ‘‘arbitrations’’



lxxxviii
Table of Contents

§ 53:11     Characterization of investigational/feasibility costs as defense
             costs

C.   ABSOLUTE POLLUTION EXCLUSION
§ 53:12      1986 ‘‘Absolute’’ pollution exclusion
§ 53:12.1    ‘‘Absolute’’ exclusion is not always absolute
§ 53:12.2    Application of absolute pollution exclusion to workplace
               injuries
§ 53:12.3    Application of absolute pollution exclusion to products
               liability claims

D.   LIMITED POLLUTION EXCLUSION
§ 53:13      1973 ‘‘Limited’’ pollution exclusion
§ 53:13.1    No distinction between active and passive polluters
§ 53:13.2    SigniŽcance of preventative measures

E.   OWN PROPERTY EXCLUSION
§ 53:14     Own property exclusion

F.   PERSONAL INJURY COVERAGE
§ 53:15     Trespass or other invasion of private occupancy

G.   ENVIRONMENTAL IMPAIRMENT INSURANCE
§ 53:16     Accident requirement
§ 53:17     Preexisting condition exclusion
§ 53:18     Compliance with Žnancial responsibility of requirement

H.   TITLE INSURANCE
§ 53:19     Title insurance

CHAPTER 54. LIABILITY INSURANCE,
MISCELLANEOUS COVERAGE QUESTIONS
§ 54:1      Generally
§ 54:2      Abuse of process
§ 54:3      Airwave piracy
§ 54:4      Antitrust
§ 54:5      Arson
§ 54:6      Asbestos
§ 54:7      Assault and battery
§ 54:8      Attorney fees
§ 54:9      Child care



                                                                      lxxxix
                               California Insurance Law Handbook

§ 54:10   Civil rights violations
§ 54:11   Collateral estoppel
§ 54:12   Completed operations coverage
§ 54:13   Contractual obligations
§ 54:14   Conversion
§ 54:15   Copyright infringement
§ 54:16   Criminal proceedings
§ 54:17   Defamation
§ 54:18   Disability discrimination
§ 54:19   Disciplinary hearings
§ 54:20   Disparagement of title claims
§ 54:21   Drugs
§ 54:22   Economic loss
§ 54:23   Emotional distress
§ 54:24   Employment discrimination
§ 54:25   Equitable relief
§ 54:26   Fraud and fraudulent concealment
§ 54:27   Hazardous waste
§ 54:28   Injunctive relief
§ 54:29   Interference with economic advantage or contractual
           relations
§ 54:30   Invasions of rights of private occupancy
§ 54:31   Investment loss
§ 54:32   Malicious prosecution
§ 54:33   Murder
§ 54:34   Negligent entrustment
§ 54:35   Negligent hiring and supervision
§ 54:36   Negligent misrepresentation
§ 54:37   On–premises liability
§ 54:38   Palimony
§ 54:39   Patent infringement
§ 54:40   Prejudgment interest
§ 54:41   Pre–natal injuries
§ 54:42   Property damage
§ 54:43   Property owned by insured
§ 54:44   Punitive damages awarded under California law
§ 54:45   Punitive damages awarded under laws of other states
§ 54:46   Punitive damages based on conduct of insured's
           predecessor-in-interest
§ 54:47   Punitive damages awarded after insurer breaches duty to
           settle
§ 54:48   Racial discrimination
§ 54:49   Racial harassment
§ 54:50   Repossession
§ 54:51   Restitution



xc
Table of Contents

§ 54:52     Sanctions
§ 54:53     Securities fraud
§ 54:54     Sex discrimination
§ 54:55     Sexual disease
§ 54:56     Sexual harassment
§ 54:57     Sexual molestation and misconduct
§ 54:58     Slander of title and trade libel
§ 54:59     Trademark infringement
§ 54:60     Trade secret misappropriation
§ 54:61     Trespass
§ 54:62     Ultimate net loss
§ 54:63     Unlawful detainer
§ 54:64     Vacant land
§ 54:65     Vicarious liability
§ 54:66     Unfair competition
§ 54:67     Wrongful death
§ 54:68     Wrongful termination
§ 54:69     Withholding medical service

CHAPTER 55. LIFE AND ACCIDENT
INSURANCE
A.   ACCIDENTAL DEATH
§ 55:1      Accidental death coverage
§ 55:1.1    Accidental means
§ 55:1.2    Burden of proof
§ 55:1.3    Evidentiary considerations

B.   ASSIGNMENTS
§ 55:2     Assignment of policy

C.   BENEFICIARIES
§ 55:3     BeneŽciaries

D.   CANCELLATION AND TERMINATION OF
     COVERAGE
§ 55:4     Cancellation by insured
§ 55:5     Cancellation by insurer for nonpayment of premium

E.   DEATH
§ 55:6     Death, proof of



                                                               xci
                                    California Insurance Law Handbook

F.     DISMEMBERMENT COVERAGE
§ 55:7    Loss of limbs

G.     EXCLUSIONS
§ 55:8      Alcohol and drug
§ 55:9      Death while committing criminal act
§ 55:10     Pilot exclusion
§ 55:11     Suicide

H.     INSURABLE INTEREST
§ 55:12      Insurable interest
§ 55:12.1    When interest must exist
§ 55:12.2    Who may challenge

I.     INTERIM COVERAGE
§ 55:13      Interim coverage while insured's application is under
              consideration
§ 55:13.1    Eect of provisions in policy application or conditional
              receipt of premium form making acceptance a condition
              precedent to coverage
§ 55:13.2    Eect of provision making insured's “continued good
              health” condition to coverage
§ 55:13.3    Cancellation of interim insurance before applicant's death
              or injury: insurer's right

J.     LAPSE
§ 55:14     Lapse, notiŽcation requirements

K.     POLICY INTERPRETATION
§ 55:15     Policy interpretation

L.     REFORMATION
§ 55:16      Reformation
§ 55:16.1    Incontestability clauses

M.       RESCISSION
§ 55:17        Rescission
§ 55:17.1      Requirement of materiality
§ 55:17.2      Requirement that application be attached to policy
§ 55:17.3      Insured's knowledge of misrepresentation
§ 55:17.4      Duty to disclose material changes after application



xcii
Table of Contents

§ 55:17.5      Insured's right to review application
§ 55:17.6      Waiver of rescission remedy: insurer's duty to investigate
§ 55:17.7      Mutual rescission or accord and satisfaction
§ 55:17.8      Incontestability clause
§ 55:17.9      Incontestability clause: impostor defense
§ 55:17.10     Rescission by insured

N.   REINSTATEMENT
§ 55:18     Reinstatement, estoppel
§ 55:19     Holocaust era claims

CHAPTER 56. [Reserved]
CHAPTER 57. [Reserved]
CHAPTER 58. NO ACTION AND
VOLUNTARY PAYMENTS CLAUSES
§ 58:1     Background
§ 58:2     No action clause
§ 58:3     Voluntary payments provision

CHAPTER 59. NOTICE
A.   INTRODUCTION AND BACKGROUND
§ 59:1     Introduction and background
§ 59:2     Burden of proof
§ 59:3     Notice by whom
§ 59:4     Notice to whom
§ 59:5     Adequacy of notice

B.   CLAIMS MADE POLICIES
§ 59:6       Claims made policies—Timeliness
§ 59:7       —Prejudice requirement
§ 59:7.1     Notice—Prejudice rule applicable where policy does not
              require claim be reported during policy period

C.   EXCESS INSURANCE
§ 59:8     Excess insurance

D.   FIRST–PARTY COVERAGE
§ 59:9        Timeliness



                                                                      xciii
                                   California Insurance Law Handbook

§ 59:10      Prejudice requirement
§ 59:10.1    No preemption of notice—Prejudice requirement

E.     OCCURRENCE OR ACCIDENT POLICIES
§ 59:11      Timeliness
§ 59:11.1    Excuse for delay
§ 59:12      Prejudice
§ 59:13      Delay in tendering defense

F.     REINSURANCE
§ 59:14     Reinsurance

G.     WAIVER
§ 59:15     Waiver of late notice defense

H.     CONTRIBUTION
§ 59:16     Contribution actions

CHAPTER 60. OTHER INSURANCE
CLAUSES
A.     PREREQUISITES TO APPLICATION OF OTHER
       INSURANCE CLAUSE
§ 60:1     Multiple policies applicable to same loss
§ 60:2     Multiple policies covering same insured
§ 60:3     Multiple policies providing same layer of coverage
§ 60:4     ‘‘Collectible’’ other insurance
§ 60:5     Self–insurance as other insurance
§ 60:6     Apportionment of coverage among multiple policies covering
             loss in absence of other insurance clauses

B.     TYPES OF OTHER INSURANCE CLAUSES
§ 60:7     Types of other insurance clauses

C.     RESOLVING CONFLICTS BETWEEN
       COMPETING OTHER INSURANCE CLAUSES
§ 60:8      Conicting other insurance clauses
§ 60:8.1    Policies providing fundamentally dierent coverages

D.     INDEMNITY AGREEMENTS
§ 60:9     Eect of indemnity agreements



xciv
Table of Contents

CHAPTER 61. POLICY INTERPRETATION
A.   CONTRACT FORMATION
§ 61:1     Formation of insurance contracts

B.   EVIDENTIARY ISSUES
§ 61:2      Evidentiary issues
§ 61:2.1    Burden of proof in coverage disputes
§ 61:2.2    Burden of proof in coverage disputes: Exceptions to
             exclusions
§ 61:2.3    Burden of proof in coverage disputes: SigniŽcance of
             imposing burden of proof on policyholder where covered
             and uncovered damages cannot be dierentiated
§ 61:2.4    Privileges
§ 61:2.5    Expert testimony
§ 61:2.6    Questions of law and fact

C.   INTERPRETATION OF GROUP POLICIES
§ 61:3     Application of contra insurer rule
§ 61:4     Conicts between master policy and certiŽcate of insurance
§ 61:5     Conicts between group policy and sales literature

D.   POLICY INTERPRETATION RULES
§ 61:6       Rules of construction
§ 61:6.1     Contra proferentum
§ 61:6.2     AIU and Bank of the West
§ 61:6.3     Powerine
§ 61:6.4     MacKinnon
§ 61:7       Requirement that parties' intent be inferred from plain
              meaning of policy whenever possible
§ 61:7.1     Ambiguity
§ 61:7.2     Ambiguity: Technical terms
§ 61:7.3     Ambiguity: Inconsistent policy provisions
§ 61:7.4     Ambiguity: Policy's failure to deŽne terms
§ 61:7.5     Ambiguity: Excess insurance
§ 61:7.6     Ambiguity: Requirement that term's meaning not depend
              on event or occurrence to which it applies
§ 61:7.7     Contra insurer rule
§ 61:7.8     Contra insurer rule: Statutorily authorized or mandatory
              coverage
§ 61:7.9     Contra insurer rule: Policy language approved by insurance
              commissioner



                                                                        xcv
                                  California Insurance Law Handbook

§ 61:7.10     Contra insurer rule: Applicability when insured and
               insurer have equal bargaining power
§ 61:7.11     Contra insurer rule: Applicability to disputes between
               insurers
§ 61:7.12     Reasonable expectations doctrine
§ 61:7.13     Reasonable expectations doctrine: Requirement that policy
               be ambiguous
§ 61:7.14     Reasonable expectations doctrine: Applicability of
               reasonable expectations doctrine to additional insureds
§ 61:7.15     Reasonable expectations doctrine: Eect of insurer's
               advertising
§ 61:7.16     Plain, clear, and conspicuous requirement
§ 61:7.17     Plain, clear, and conspicuous requirement: Federal common
               law
§ 61:7.18     Plain, clear, and conspicuous requirement: Relevance of
               insured's reasonable expectations
§ 61:7.19     Plain, clear, and conspicuous requirement: Declarations
               page
§ 61:7.20     Plain, clear, and conspicuous requirement: Tension between
               insured's duty to read policy and insurer's duty to advise
               insured of ‘‘conspicuous, plain and clear’’ policy provisions
               that are inconsistent with insured's reasonable
               expectations
§ 61:7.21     Forfeitures
§ 61:7.22     Warranties
§ 61:8        Public policy
§ 61:9        Statutory interpretation

CHAPTER 62. POLICY LIMITS
A.     AGGREGATE
§ 62:1     Aggregate limits

B.     AUTO CLAIMS
§ 62:2     Per person
§ 62:3     Per accident

C.     PER CLAIM LIMITS
§ 62:4     Per claim limits

D.     DEDUCTIBLES AND SELF–INSURED
       RETENTIONS
§ 62:4.1    Liability policies



xcvi
Table of Contents

§ 62:4.2    Theft and employee dishonesty claims
§ 62:4.3    Theft and employee dishonesty claims: Stacking of coverage
             under successive employee dishonesty policies

E.   PER LOSS
§ 62:5     Per loss limits and deductibles

F.   PER OCCURRENCE
§ 62:6     Per occurrence limits and deductibles

G.   STACKING OF LIMITS
§ 62:7     Liability insurance
§ 62:8     Uninsured motorist coverage

CHAPTER 63. PROCEDURE
A.   APPELLATE REVIEW
§ 63:1     Appealable orders
§ 63:2     Standard of review:   interpretation of insurance policies
§ 63:3     Standard of review:   punitive damages
§ 63:4     Standard of review:   refusal to grant declaratory relief
§ 63:5     Standard of review:   federal district court's exercise of
            jurisdiction

B.   BANKRUPTCY
§ 63:6     Bankruptcy of insured—Eect on insured's rights against
            insurer
§ 63:7     Bankruptcy of person or entity against whom subrogation is
            sought: eect on insurer's subrogation rights

C.   CHOICE OF LAW
§ 63:8     Choice of law

D.   CHOICE OF FORUM: CONVENIENCE OF
     PARTIES AND JUDICIAL ADMINISTRATOR
§ 63:9        Contractual choice of forum provisions
§ 63:10       Forum non conveniens issues
§ 63:11       Exhaustion of administrative remedies doctrine
§ 63:12       Primary jurisdiction doctrine
§ 63:13       Impact of service of suit clause
§ 63:13.1     Forum selection provision



                                                                        xcvii
                                  California Insurance Law Handbook

§ 63:13.2    Does service of suit clause preclude removal to federal
              district court?
§ 63:13.3    Eect of service of suit clause on enforceability of policy's
              arbitration clause

E.       CHOICE OF FORUM: JURISDICTIONAL ISSUES
§ 63:14      Constitutional limits on exercise
§ 63:14.1    Constitutional limits on exercise of jurisdiction in disputes
              between insurers
§ 63:15      Federal diversity jurisdiction
§ 63:15.1    Eect of direct action proviso
§ 63:16      Appellate review of district court's remand for lack of
              diversity

F.       CHOICE OF FORUM: FEDERAL ABSTENTION
         DOCTRINES
§ 63:17      Eect of parallel state action (Colorado River abstention)
              on federal declaratory relief actions
§ 63:17.1    Applicability of Colorado River abstention to rescission
              actions
§ 63:18      Eect of state regulatory scheme (Burford abstention)
§ 63:19      Appellate review of district court's decision to abstain from
              jurisdiction

G.       CLASS ACTIONS
§ 63:20     Class actions

H.       DECLARATORY RELIEF ACTIONS
§ 63:21      Insured's right to recover
§ 63:22      Disputes over independent counsel fees
§ 63:23      Case and controversy requirement
§ 63:24      Proper parties
§ 63:24.1    Third-party's standing to litigate coverage issues
§ 63:25      Right to jury trial
§ 63:26      Exhaustion of administrative remedies requirement
§ 63:27      Declaratory relief action to determine right to independent
              (Cumis) counsel
§ 63:28      Declaratory relief action to determine duty to defend when
              coverage depends on fact in underlying suit
§ 63:29      Stay of declaratory relief action pending resolution of
              underlying action
§ 63:30      California Insurance Guaranty Association
§ 63:31      Cross claims for bad faith in declaratory relief action



xcviii
Table of Contents

§ 63:32      Application of anti-SLAPP (Strategic Lawsuits against
              Public Participation) statute
§ 63:33      Liability for Žling declaratory relief action: bad faith
§ 63:34      Liability for Žling declaratory relief action: malicious
              prosecution

I.   INTERPLEADER AND INTERVENTION
§ 63:35     Interpleader actions
§ 63:36     Intervention in actions against suspended corporate insureds

J.   SETTLEMENTS
§ 63:37     Binding eect of good faith settlement determination
§ 63:38     Rescission of settlement based on insurer's misrepresentation
             of policy limits

K.   STANDING
§ 63:39      Breach of implied covenant of good faith and fair dealing
§ 63:40      Traditional tort and statutory theories
§ 63:41      Judgment creditors
§ 63:42      Express beneŽciaries
§ 63:43      Additional or unnamed insureds
§ 63:43.1    Standing to sue for denial of beneŽts to another insured
§ 63:44      Insured's spouse
§ 63:45      Shareholders in or members of insured organization
§ 63:46      Organization's standing to sue for members' injury
§ 63:47      Insured's estate
§ 63:48      Special rules applicable to nonadmitted insurers
§ 63:49      Bankruptcy trustees
§ 63:49.1    Eect of insured's bankruptcy on insured's standing to sue
§ 63:50      Standing to seek reformation
§ 63:51      Standing to enforce Unfair Competition Law

L.   TIME LIMITS ON FILING SUIT
§ 63:52      Contractual limitations periods
§ 63:53      Statute of limitations: coverage actions
§ 63:54      Statute of limitations: bad faith actions
§ 63:55      Statute of limitations: contribution actions between
              insurers
§ 63:56      Statute of limitations: rescission
§ 63:57      Statute of limitations: professional negligence actions
              against agents and brokers
§ 63:57.1    Tolling of limitations period
§ 63:58      Eect of insurer's advance payment on tolling of limitations
              period



                                                                        xcix
                                  California Insurance Law Handbook

§ 63:60      Commencement of statute of limitations on claim for policy
              beneŽts
§ 63:59      Commencement of statute of limitations on breach of duty
              to defend
§ 63:61      Commencement and tolling of statute of limitations on
              claims for bad faith failure to settle
§ 63:62      Loss of right to assert limitations period through waiver or
              estoppel
§ 63:63      Special limitations period for claims arising out of
              Northridge earthquake

M.       SUBROGATION
§ 63:64     Subrogation

N.   SUMMARY JUDGMENT
§ 63:65     Summary judgment

CHAPTER 64. PROFESSIONAL LIABILITY
INSURANCE
A.   ALLOCATION OF COVERAGE
§ 64:1     Allocation of coverage among successive insurers

B.   CLAIMS MADE COVERAGE
§ 64:2      Claims
§ 64:2.1    Timing
§ 64:2.2    Number
§ 64:3      Requirement that claim be both made and reported during
             policy period: relevance of prejudice
§ 64:4      Policies interpreted to provide both claims made and
             occurrence coverage
§ 64:5      Insurer's duty to inform insured of limited nature of claims-
             made coverage
§ 64:6      Coverage limited to damages
§ 64:7      Extension of coverage upon cancellation or nonrenewal
§ 64:8      Coverage for “potential” claims reported during policy period

C.   DUTY TO DEFEND
§ 64:9      Indemnity coverage
§ 64:10     Pre-litigation claims expenses
§ 64:11     Pre-tender defense costs
§ 64:12     Criminal proceedings



c
Table of Contents

D.   CONFIDENTIALITY
§ 64:13     Duty of medical liability insurers to maintain conŽdentiality
             of medical records

E.   EXCLUSIONS
§ 64:14     Claims unreported during term of occurrence policy when
             insured obtains similar insurance after termination of policy
§ 64:15     Pollution
§ 64:16     Sexual intimacy
§ 64:17     Transaction in which partnership has an interest

F.   INSUREDS
§ 64:18     Insureds

G.   INDEMNITY COVERAGE
§ 64:19     Indemnity coverage

H.   CONSENTION
§ 64:20     Insured's consent to settlements clauses

I.   POLICY LIMITS
§ 64:21     Policy limits

J.   RENEWALS
§ 64:22     Renewals

K.   SCOPE OF COVERAGE
§ 64:23      Professional services
§ 64:23.1    Requirement that professional services be performed “in
              conduct of the insured Žrm's business”
§ 64:23.2    Cases interpreting professional services exclusion
§ 64:24      Fee disputes
§ 64:25      Partnership and business disputes
§ 64:26      Directors and ocers liability
§ 64:27      Real estate appraisers
§ 64:28      Wrongful termination claim
§ 64:29      Withholding medical service

L.   TRIGGER OF COVERAGE
§ 64:30      Trigger of coverage



                                                                        ci
                                  California Insurance Law Handbook

§ 64:30.1     Requirement that insured work for Žrm at time of error or
               omission

CHAPTER 65. PROPERTY INSURANCE,
FIRST-PARTY COVERAGE
A.    APPRAISALS
§ 65:1      Appraisals
§ 65:1.1    Validity
§ 65:1.2    Subject matter
§ 65:1.3    Judicial conŽrmation of appraisal awards
§ 65:1.4    QualiŽcations of appraisers
§ 65:1.5    Appraiser immunity

B.    ASSIGNABILITY OF COVERAGE
§ 65:2     Before loss
§ 65:3     After loss

C.    BURGLARY OR THEFT COVERAGE
§ 65:4     Burglary or theft coverage

D.    COINSURANCE CLAUSES
§ 65:5     Coinsurance clauses

E.    CONDITIONS OF COVERAGE
§ 65:6     Notice
§ 65:7     Proof of loss
§ 65:8     Contractual limitations periods
§ 65:9     Newly acquired property provision

F.    EARTHQUAKE COVERAGE
§ 65:10     Earthquake coverage

G.    ENSUING LOSS COVERAGE
§ 65:11     Ensuing loss clause

H.    EXAMINATION UNDER OATH
§ 65:12       Examination under oath
§ 65:12.1     Bad faith
§ 65:12.2     Privilege against self-incrimination



cii
Table of Contents

I.   EXCLUSIONS
§ 65:13      Applicability when damage results from combination of
              covered and excluded perils
§ 65:14      Contractor negligence and faulty workmanship
§ 65:15      Deterioration, wear and tear
§ 65:16      Earth movement
§ 65:17      Enforcement of ordinance or building code
§ 65:18      Flood
§ 65:19      Interior of building unless covered by roof
§ 65:20      Latent defect and inherent vice
§ 65:20.1    Latent defects include defects in both design and
              construction
§ 65:21      Leakage and seepage
§ 65:22      Neglect
§ 65:23      Plumbing leakage
§ 65:24      Pollution
§ 65:25      Underground water
§ 65:26      Water through drains or sewer
§ 65:27      Willful acts of insured
§ 65:27.1    Coverage for innocent co-insureds
§ 65:28      Wet or dry rot
§ 65:28.1    Vacancy exclusion
§ 65:28.2    “Under construction” exception to vacancy exclusion

J.   INSURABLE INTEREST
§ 65:29     Insurable interest

K.   LOSS PAYEES
§ 65:30      Loss payable or mortgagee clauses
§ 65:30.1    Extinguishment of insurable interest
§ 65:30.2    Lenders' rights to insurance proceeds
§ 65:30.3    Eect of credit bid rule on loss payee lender's recovery for
              bad faith

L.   MEASURE OF RECOVERY
§ 65:31      Diminution in value
§ 65:32      Consequential damages
§ 65:33      Actual cash value
§ 65:34      Actual cash value when property lacks market value
§ 65:34.1    Coinsurance clauses
§ 65:34.2    Reduction in coverage for deferred maintenance and
              depreciation
§ 65:35      Replacement cost coverage



                                                                        ciii
                                   California Insurance Law Handbook

§ 65:35.1    Time and place of replacement
§ 65:35.2    Code upgrades
§ 65:36      Investigation costs

M.       NOTICE ISSUES
§ 65:37     Notice issues

N.    RIOT COVERAGE
§ 65:38     Riot coverage

O.    SCOPE OF COVERAGE
§ 65:39     “Other structures”
§ 65:40     Land
§ 65:41     Lateral support
§ 65:42     Collapse coverage
§ 65:43     Stock
§ 65:44     Direct physical loss

P.    SUBROGATION
§ 65:45     Subrogation: insurer's right to obtain reimbursement for loss
             from third-parties

Q.    SUE AND LABOR
§ 65:46     Sue and labor clause: insurer's obligation to reimburse
             insured for cost of mitigating damages

R.    TRIGGER OF COVERAGE
§ 65:47      Trigger of coverage
§ 65:47.1    Loss-in-progress or known loss rule

CHAPTER 66. RATES
A.    PROPOSITION 103
§ 66:1    Background
§ 66:2    Classes of insurance to which Proposition 103 applies
§ 66:3    Proposition 103's rate reduction provisions
§ 66:4    Proposition 103's rate freeze provisions
§ 66:5    Proposition 103's requirement that insurers obtain
           commissioner's “prior approval” for rate changes after
           November 8, 1989
§ 66:6    Procedures for obtaining commissioner's prior approval under
           Proposition 103



civ
Table of Contents

B.   REGULATIONS
§ 66:7      Insurance commissioner's regulations implementing
             Proposition 103
§ 66:7.1    Insurance commissioner's formula for determining rates
§ 66:7.2    20th Century insurance company's challenge
§ 66:7.3    20th Century insurance company's challenge: Superior Court
             Judge Janavs' opinion rejecting the regulations
§ 66:7.4    20th Century insurance company's challenge: Supreme
             Court's decision

C.   AUTO RATING FACTORS
§ 66:8      Factors for setting automobile insurance rates
§ 66:8.1    SpeciŽcally prohibited rating factors
§ 66:8.2    Good driver discount policies
§ 66:8.3    California assigned risk plan rates

D.   PRIVATE ENFORCEMENT ACTIONS
§ 66:9      Private enforcement actions
§ 66:9.1    The statutory scheme
§ 66:9.2    Meaning of the statutory scheme in light of Proposition 103's
             history and purpose
§ 66:9.3    Practical implications of recognizing private rights of action

E.   TITLE INSURANCE RATES
§ 66:10     Title insurance rates

F.   WORKERS' COMPENSATION RATES
§ 66:11     Workers' compensation rates

G.   PROCEDURAL ISSUES
§ 66:12     Exhaustion of administrative remedies doctrine
§ 66:13     Primary jurisdiction doctrine

H.   PUBLIC INSPECTION
§ 66:14     Public Inspection

CHAPTER 67. REFORMATION
A.   INTRODUCTION
§ 67:1     Generally



                                                                        cv
                                    California Insurance Law Handbook

B.    EVIDENTIARY ISSUES
§ 67:2     Evidentiary issues

C.    GROUNDS FOR REFORMATION
§ 67:3     Oral representations of insurer's agents
§ 67:4     Misrepresentation
§ 67:5     Mutual mistake

D.    DEFENSES
§ 67:6     Lack of reasonable care
§ 67:7     Incontestability clause
§ 67:8     Rights of third–parties
§ 67:9     Statute of limitations

E.    STANDING
§ 67:10     Standing

CHAPTER 68. REINSURANCE
A.    BACKGROUND
§ 68:1     Reinsurance terminology
§ 68:2     Assumption reinsurance versus indemnity reinsurance:
            Nature of reinsurance relationship
§ 68:3     Purpose of reinsurance
§ 68:4     Treatment of reinsurance on ceding insurer's Žnancial
            statements

B.    REINSURED'S DUTIES TO REINSURER
§ 68:5      Obligation of “utmost good faith”
§ 68:6      Notice obligations
§ 68:6.1    Waiver of late notice defense

C.    REINSURER'S DUTIES TO REINSURED
§ 68:7      Obligation to “follow the fortunes” of reinsured
§ 68:7.1    Obligation to reimburse reinsured's defense costs
§ 68:8      Obligation to indemnify reinsured against extra–contractual
             liability
§ 68:9      Breach of covenant of good faith and fair dealing

D.    REINSURER'S DUTIES TO ORIGINAL
      INSURED—INDEMNITY REINSURANCE
§ 68:10     Contractual liability



cvi
Table of Contents

§ 68:11     Extra–contractual liability
§ 68:12     Assumption reinsurance

E.   REINSURER'S DUTIES TO THIRD–PARTY
     CLAIMANTS
§ 68:13     Reinsurer's duties to third–party claimants against original
             insured

F.   INSOLVENCY
§ 68:14      Reinsurer's duties in event of reinsured's insolvency
§ 68:14.1    Seto rights

G.   ARBITRATION
§ 68:15     Arbitration of reinsurance disputes

CHAPTER 69. RENEWALS, LAPSE &
REINSTATEMENT
A.   ACCEPTANCE
§ 69:1    Necessity of premium payment

B.   RENEWALS
§ 69:2    Agent's authority to renew policy
§ 69:3    Bad faith refusal to renew
§ 69:4    Grace periods
§ 69:5    Insurer's duty to provide notice of nonrenewal
§ 69:6    Insurer's duty to notify regulators of cancellation or
           nonrenewal
§ 69:7    Insurer's duty to notify insured of reductions of coverage in
           renewal policy

C.   STATUTORY RESTRICTIONS ON INSURER'S
     RIGHT TO REFUSE RENEWALS
§ 69:8      Automobile insurance and Proposition 103
§ 69:9      Common carrier insurance
§ 69:10     Non–automobile insurance polices

D.   LAPSE
§ 69:11      Lapse
§ 69:11.1    Eect of requirement that insurer notify government
              regulator of nonrenewal



                                                                          cvii
                                  California Insurance Law Handbook

E.      REINSTATEMENT
§ 69:12     Estoppel to deny

CHAPTER 70. RESCISSION
A.      BACKGROUND
§ 70:1     Background
§ 70:2     Bad faith liability

B.      ELEMENTS OF RESCISSION CLAIM
§ 70:3      Misrepresentation or concealment in application
§ 70:3.1    Scienter requirement
§ 70:3.2    Requirement that insured know of fact misrepresented or
             concealed
§ 70:3.3    Basis for rescinding renewal policy
§ 70:3.4    Misrepresentation or concealment by agent or broker
§ 70:3.5    Continuing duty to disclose material information after
             application
§ 70:3.6    Continuing duty to disclose material information after
             application: eect of provision making insured's “continued
             good health” condition to coverage
§ 70:3.7    Eect of misrepresentation as to one coverage
§ 70:3.8    Insured's right to review application
§ 70:3.9    Requirement that application be attached to policy
§ 70:4      Misrepresentation concerning claims and proof of loss
§ 70:4.1    Innocent co-insureds
§ 70:5      Materiality
§ 70:5.1    Proof
§ 70:5.2    Causal connection to loss not required
§ 70:5.3    Kinds of material misrepresentations
§ 70:6      Special rules applicable to marine insurance
§ 70:7      Special rules applicable to health insurance

C.      WAIVER OF RESCISSION REMEDY
§ 70:8     Insurer's duty to investigate

D.      RIGHTS OF INNOCENT PARTIES
§ 70:9      Rights of additional and innocent insureds
§ 70:10     Rights of third-parties
§ 70:11     Subrogation by California Insurance Guarantee Association
§ 70:12     Mutual rescission or accord and satisfaction

E.      PROCEDURE
§ 70:13       Method



cviii
Table of Contents

§ 70:14       Eect of action on policy requirement that right to rescind
               be exercised before Žling action “on the policy”
§ 70:15       Eect of insured's Žling Žrst
§ 70:16       Eect of interpleader action
§ 70:17       Statutory and contractual time limits (incontestability
               clauses)
§ 70:17.1     Incontestability clause does not aect coverage limitations

CHAPTER 71. RESTITUTION
§ 71:1     Insurer's right to recover mistaken payment
§ 71:2     Insurer's right to recover from insured payment required by
            statute

CHAPTER 72. RACKETEER INFLUENCED
CORRUPT ORGANIZATIONS ACT (RICO)
§ 72:1     Introduction and background
§ 72:2     Elements of RICO action
§ 72:3     Application of RICO to insurer claims–handling practices
§ 72:4     Application of RICO to insurer insolvency litigation
§ 72:5     RICO as tool for Žghting insurance fraud
§ 72:6     Mccarran–Ferguson Act “reverse preemption” of RICO actions

CHAPTER 73. SALES AND UNDERWRITING
PRACTICES
§ 73:1     Proposition 103's repeal of prohibitions on right of banks to
            sell insurance
§ 73:2     Discrimination
§ 73:3     Regulatory jurisdiction
§ 73:4     Liability for misleading sales literature
§ 73:5     Commission rebating
§ 73:6     Duty to advise about anticipated material changes in policy
§ 73:7     Credit reports

CHAPTER 74. SUBROGATION
A.   NATURE AND SOURCE OF SUBROGATION
     RIGHTS
§ 74:1      Equitable subrogation
§ 74:2      Contractual subrogation
§ 74:2.1    Equity may limit contractual subrogation
§ 74:2.2    Contractual liens distinguished
§ 74:2.3    Contractual liens distinguished: Applicability of contractual
             lien provision to third party beneŽciaries



                                                                           cix
                                  California Insurance Law Handbook

§ 74:2.4    Contractual liens distinguished: Attorney liability for failure
             to disburse funds to insurer
§ 74:2.5    Contractual liens distinguished: Insurer liability for failure
             to disburse funds to hospital
§ 74:2.6    Contractual liens distinguished: Federal preemption of a
             health insurer's reimbursement rights
§ 74:2.7    Contribution distinguished
§ 74:3      Subrogation to insured's indemniŽcation rights
§ 74:4      Insured's duty to protect insurer's subrogation rights
§ 74:4.1    Eect of insurer's conduct on insured's duty to protect
             insurer's subrogation rights
§ 74:5      Subrogation against insureds or co–insureds
§ 74:6      Subrogation against government entities
§ 74:7      Subrogation by excess insurers against primary insurers

B.   DEFENSES
§ 74:8       Equities do not favor insurer
§ 74:9       Insurer's bad faith
§ 74:9.1     Insurer not liable for bad faith refusal to exercise
              subrogation right
§ 74:10      Insolvency: Of tortfeasor's insurer
§ 74:11      Bankruptcy of person or entity against whom subrogation
              is sought
§ 74:12      No insured loss
§ 74:12.1    Burden of proof
§ 74:13      No payment by insurer
§ 74:14      Volunteers may not recover
§ 74:15      No subrogation of “personal rights”
§ 74:16      Statutory prohibition against subrogation by collateral
              source in medical malpractice action
§ 74:17      Waiver of subrogation: Contractual
§ 74:18      Waiver of subrogation: Implied when subrogating against
              own insured
§ 74:19      Waiver of subrogation: Limitations periods
§ 74:19.1    Uninsured motorist claims
§ 74:20      Settlement and release by insured of person from whom
              subrogation sought
§ 74:21      Equitable defenses assertable against insured
§ 74:21.1    Eect of insured's pleading errors
§ 74:22      Insured's culpable conduct

C.   PROCEDURE
§ 74:23     Procedure

D.   RECOVERY
§ 74:24     Nature of damages from which subrogation may be obtained



cx
Table of Contents

§ 74:25    Priority when insurer's rights are contractual
§ 74:26    Priority when insurer's rights are equitable: Requirement
            that insured be made whole
§ 74:27    Policy provisions altering requirement that insured be made
            whole
§ 74:28    Post–loss agreement to modify requirement that insured be
            made whole
§ 74:29    Priority between insurers
§ 74:30    Attorney's fees: Insured's attorney fees
§ 74:31    Attorney's fees: defendant's attorney fees
§ 74:32    Eect of subrogation recovery on insured tortfeasor's liability
            to insured plainti
§ 74:33    Insured's deductible

E.   ASSIGNMENTS
§ 74:34    Assignment of subrogation rights

CHAPTER 75. [Reserved]

CHAPTER 76. [Reserved]
CHAPTER 77. THEFT COVERAGE
§ 77:1    Bad faith
§ 77:2    First–party claims
§ 77:3    Third–party claims

CHAPTER 78. TITLE INSURANCE
A.   NATURE OF TITLE INSURANCE
§ 78:1    Title insurance deŽned
§ 78:2    Contract of indemnity against loss, rather than guaranty of
           title
§ 78:3    Rules of construction
§ 78:4    Preliminary title reports, commitments, binders and abstracts
           of title: Compared and contrasted
§ 78:5    Guarantees

B.   TITLE INSURANCE POLICIES
§ 78:6     California Land Title Association and American Land Title
            Association policies compared and contrasted
§ 78:7     Persons or entities insured
§ 78:8     Property insured



                                                                        cxi
                                  California Insurance Law Handbook

§ 78:9      “Public records” deŽned
§ 78:10     Insuring agreement—Coverages common to both CLTA and
             ALTA policies

C.     EXCLUSIONS COMMON TO BOTH CLTA AND
       ALTA POLICIES
§ 78:11     Government regulation and police power
§ 78:12     Defects created, suered, assumed, or agreed to by insured
§ 78:13     Unrecorded defects known by insured and not disclosed to
             insurer
§ 78:14     Defects resulting in no damage to insured and defects arising
             after date of policy
§ 78:15     Loss or damage that would not have been sustained if
             insured had been a bona Žde purchaser
§ 78:16     Exceptions from coverage
§ 78:17     Obligations of insured when claim arises

D.     OBLIGATION OF TITLE INSURER IN EVENT
       OF COVERED LOSS
§ 78:18      Insurer's alternatives
§ 78:19      Duty to defend
§ 78:19.1    Conict of interest

E.     STATUTE OF LIMITATIONS
§ 78:20      Statute of limitations in title insurance disputes: Code of
              Civil Procedure § 339(1)
§ 78:20.1    Tolling

F.     MEASURE OF RECOVERY UNDER POLICY—
       CONTRACTUAL
§ 78:21     Cost of removing title defect
§ 78:22     Diminution in value
§ 78:23     Rents and carrying costs
§ 78:24     Limitations on recovery by lenders

G.     MEASURE OF RECOVERY—
       EXTRA–CONTRACTUAL DAMAGES
§ 78:25     Bad faith
§ 78:26     Fraud
§ 78:27     Negligence in excepting or failing to except defects from
             coverage
§ 78:28     Negligence in performing escrow duties



cxii
Table of Contents

§ 78:29   Negligence in preparing preliminary title reports

H.   RESCISSION
§ 78:30   Rescission of title insurance policies
Table of Laws and Rules
Table of Cases
Index




                                                              cxiii

								
To top