New Jersey broadens its pre-suit insurance disclosure statute, the Vermont Supreme Court rules a shipbuilder’s COVID-19 business interruption claim can proceed, and, in California, insurers get some statutory protections when insuring cannabis businesses.
Colorado
Five States ID’d as Most At-Risk for Fire Damage
Florida, California, Texas, Colorado, and New Mexico are at the most risk for wildfire damages in 2022, according to a new report released last week by CoreLogic. The report examined property-related wildfire risk alongside reconstruction resource availability, temporary housing capacity for displaced individuals, and community economic recovery potential among fire-prone regions. The model compared the number of homes at risk of damage from a 1-in-50-year fire to the total housing stock in each state to determine the communities that have the most economic risk from wildfire. In Colorado’s most heavily populated county, a wildfire could affect 39,000 homes, and New Mexico’s counties have an even greater percentage of risk, given it is much smaller. California faces prolonged drought conditions and firefighter shortages, employing about 25% fewer of these crucial first responders in the summer of 2022 than initially projected. Virtually the entire state of Florida is considered at high risk of wildfire property damage, according to CoreLogic’s analysis.—From Mark Friedlander, Insurance Information Institute
California
Cannabis Insurance Providers Get Legal Protections
Several cannabis-related bills were signed by California Gov. Gavin Newsom on Sept. 18, 2022, including AB 2568, which clarifies that it is not a crime for individuals and firms licensed by the California Department of Insurance to provide insurance or related services to persons licensed to engage in commercial cannabis activities. Though the California Civil Code was amended in 2018 to clarify that cannabis is the legal object of a contract, and it has been tacitly understood that insurance contracts are legal in California, the intent of this new law is to remove any uncertainty and to encourage further growth of admitted insurance products for California cannabis businesses. AB 2568 was strongly supported by the Department of Insurance, which argued that “we must provide commercial cannabis businesses with multiple, affordable options for insurance as they pursue and maintain state licensure.”—From CLM Member Ian A. Stewart, Wilson Elser
Missouri
Cannabis Ballot Measure Clears Lawsuit
A proposed constitutional amendment to legalize recreational marijuana will go before voters after Cole County Circuit Judge Cotton Walker dismissed a lawsuit against the measure, according to news reports. Plaintiff alleged Secretary of State Jay Ashcroft’s office overstepped by rechecking the voter signatures that were required to get the measure on the ballot, which is typically done by local election officials, the Associated Press reports. The judge dismissed the lawsuit, stating plaintiff did not prove she was a Missouri resident. He added he would have ruled against her even if she had. The measure will now head to the ballot on Nov. 8.—From Senior Managing Editor Phil Gusman
Ohio
Law Clarifying At-Home Injuries Goes Into Effect
H.B. 447 went into effect Sept. 23, offering some clarity regarding the compensability of injuries sustained by remote workers. The bill, which was signed in June, adds an exclusion for compensation for employees who sustain an injury or disability while performing work duties in a work area that is located within the employee’s home and that is separate and distinct from the location of the employer, unless all of the following apply: The employee’s injury or disability must arise out of the employee’s employment; the employee’s injury or disability must be caused by a special hazard of the employee’s employment activity; and the employee’s injury or disability must be sustained in the course of an activity undertaken by the employee for the exclusive benefit of the employer. H.B. 447 passed the House in February 2022 and the Senate in June.—From Senior Managing Editor Phil Gusman
New Jersey
Pre-Suit Insurance Disclosure Statute Broadened
New Jersey recently enacted legislation that requires pre-suit disclosures by insurers of policy limits. Under the new law, N.J.S.A. 39:6B-1.1, insurers are now required to disclose their policy limits in response to a written request for such information from a New Jersey-licensed attorney, even if the matter is not yet in suit. The statute is currently in effect. Broader than the existing pre-suit disclosure statute that applies to passenger automobile policies, the new statute applies to “all applicable insurance policies and any applicable umbrella or excess liability insurance policies.” In addition, effective Oct. 4, 2022, each insurer issuing applicable policies in New Jersey must provide the New Jersey Department of Banking and Insurance (DOBI) an e-mail address for receiving disclosure requests, which DOBI will publish on its website.—From CLM Members Thomas M. Wester, Christian A. Cavallo, Jeffrey L. Kingsley, and David L. Brown, Goldberg Segalla
Vermont
Shipbuilder May Seek COVID-19 Coverage
In a 3-2 decision, the Vermont Supreme Court ruled in Huntington Ingalls Industries Inc. et al. v. Ace American Insurance Co. et al. that a shipbuilder’s COVID-19 business interruption claim can proceed, reversing the trial court. In determining whether there might be a direct physical loss that could trigger the policy in question, the court says, “The virus can ‘adhere’ to surfaces, transforming the surface into a fomite. This process of the virus ‘adhering’ to surfaces caused ‘detrimental physical effects’ that ‘altered and impaired the functioning of the tangible, material dimensions’ of the property.” The court adds, “To be clear, this opinion does not state that what occurred in insured’s shipyards is ‘direct physical loss or damage to property’ under the policy. We merely conclude that insured has alleged enough to survive a Rule 12(c) motion under our extremely liberal pleading standards.” Stating that the complaint “plausibly alleges ‘direct physical damage,’” the court decided the reinsurer defendants are not entitled to judgment on the pleadings.—From Senior Managing Editor Phil Gusman