When There are Two Damage Causing Events The Aggregate Limit Applies
Post 5078
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In February 2024, in the matter of Ciara Kilburn, et al. v. Bill Simmon, et al., 20-CV-461, a jury returned a plaintiffs’ verdict against Defendant The Media Factory f/k/a Vermont Community Access Media, Inc. (“VCAM”) and one of its employees.
VCAM’s liability insurer, plaintiff Hanover Insurance Company (“Hanover”) sued VCAM and the plaintiffs in the underlying suit, seeking a declaration as to the scope of its coverage obligations with respect to that verdict.
In The Hanover Insurance Company v. The Media Factory f/k/a Vermont Community Access Media, Inc. et al, 2025 Vt Super 051401, No. 24-CV-03700, Superior Court of Vermont, Civil Division, Chittenden Unit (May 14, 2025) decided how many occurrences impinged on the Hanover policy.
BACKGROUND
In the underlying action, Ciara Kilburn and Brona Kilburn alleged that in 2012 Bill Simmon, then an employee of VCAM, used a hidden camera to record them changing in and out of costumes in a utility room and then posted those videos on the internet. The women subsequently sued Simmon and VCAM. The jury found that Simmon invaded Ciara and Brona’s privacy and that VCAM negligently supervised Simmon. It awarded Ciara and Brona $1.75 million each from Simmon in compensatory damages, another $1.75 million each from VCAM in compensatory damages, and another $2 million each from Simmon in punitive damages.
THE INSURANCE
Hanover Commercial Line Policy No. ZHV 8849689 07 (“the Policy”) insured VCAM. The CGL Coverage Form describes the two coverages at issue here: Coverage A insures against “Bodily Injury and Property Damage Liability,” while Coverage B insures against “Personal and Advertising Injury Liability.”
Hanover issued no reservation of rights with respect to its obligations under the Policy. Rather it engaged counsel to represent VCAM and subsequently controlled that defense.
DISCUSSION
Hanover seeks a declaration that there can be no recovery under “Coverage B,” that there was only a single “occurrence” under Coverage A, and that VCAM’s coverage under the Policy is therefore limited to the $1 million per-occurrence limit.
There is no dispute that the most Hanover can owe under the Policy, whether under Coverage A, Coverage B, or any combination of the two, is the Policy’s aggregate limit of $2,000,000. A decision either that there were multiple occurrences or that Coverage B applies will leave the full aggregate limit exposed.
Because it did not reserve rights Hanover is now estopped from making the argument it should have reserved long ago.
The court concluded that Hanover’s aggregate limit, rather than the single occurrence limit, applies.
Focusing on the immediate cause-that is, the act that causes the damage-rather than the underlying tort-that is, the insured’s negligence-is consistent with the interpretation of other forms of insurance policies. An occurrence takes place at the time the party is actually damaged, rather than at some other moment when an allegedly wrongful act sets in motion the chain of events that eventually leads to the injury.
The Court found that sexual abuse does not fit neatly into the policies’ definition of continuous or repeated exposure to conditions. The jury verdict form further reflects that there were two “occurrences”: The jury found that Mr. Simmon invaded the Kilburns’ privacy by “taking the photos/videos” and also by “posting the photos/videos online/sharing them with a stranger.” The court rejected Hanover’s self-serving interpretation of the verdict form and instead concluded that there were two “occurrences” under the Policy.
The court denied Hanover’s motion and granted VCAM’s motion in part. The court declared that Hanover owes VCAM a duty of indemnification under Coverage A of the CGL coverage part of the Policy, up to its aggregate CGL coverage limit of $2,000,000, against the verdict obtained by the Kilburns in the underlying suit.
The determination that Hanover owes this duty under Coverage A moots any consideration of obligations owed under Coverage B.
VCAM and the Kilburns are entitled to judgment as a matter of law on Hanover’s Complaint.
ZALMA OPINION
When an insurer fails to advise its insured that it intends to reserve its right to limit coverage to a single limit of liability it essentially waives the right to make that claim. In this case, since there were obviously, at least, two separate actions causing damage to the underlying case’s plaintiffs which were two “occurrences” as defined in the policy and impinged two separate policy limits and requires Hanover to pay its full aggregate limit.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Evidence of Unreasonable Conduct Required To Obtain Bad Faith Damages
Repair vs. Replace not a Tort
Post 5100
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Posted on June 17, 2025 by Barry Zalma
See the full video at and at
In Michael Gerstman and Marie Webster v. Crestbrook Insurance Company, Civil Action No. 3:24-CV-0635-D, United States District Court, N.D. Texas, Dallas Division (June 9, 2025)Michael Gerstman and Marie Webster sued Crestbrook Insurance Company over a storm damage insurance coverage dispute. The court proceedings include various claims related to breach of contract and violations of Texas insurance laws, following Crestbrook’s denial of the plaintiffs’ claim for damages caused by a hail and wind storm.
CASE BACKGROUND
The plaintiffs’ property...
ZIFL – Volume 29, Number 12
The Source for the Insurance Fraud Professional
Read the full article at https://lnkd.in/g3cETykR, see the full video at https://lnkd.in/gNCv_PVN and at https://lnkd.in/gfgweM9r, and at https://zalma.com/blog plus more than 5050 posts.
Subscribe to the e-mail Version of ZIFL, it’s Free! https://lnkd.in/gfpn78FM
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at https://lnkd.in/gVT5G9s You can read the full 25 page issue of the June 15, 2025 issue at https://lnkd.in/gTWZUnnF
Read this article and the full 25 page issue of Zalma’s Insurance Fraud Letter Here https://lnkd.in/gnNk7mFd
Fraud is a Crime that Should Never Pay
Aric Lynn Holloway II (plaintiff), appealed the stipulated order of dismissal in favor of defendant-appellee, Citizens Insurance Company of the ...
ZIFL – Volume 29, Number 12
The Source for the Insurance Fraud Professional
Read the full article at https://lnkd.in/g3cETykR, see the full video at https://lnkd.in/gNCv_PVN and at https://lnkd.in/gfgweM9r, and at https://zalma.com/blog plus more than 5050 posts.
Subscribe to the e-mail Version of ZIFL, it’s Free! https://lnkd.in/gfpn78FM
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at https://lnkd.in/gVT5G9s You can read the full 25 page issue of the June 15, 2025 issue at https://lnkd.in/gTWZUnnF
Read this article and the full 25 page issue of Zalma’s Insurance Fraud Letter Here https://lnkd.in/gnNk7mFd
Fraud is a Crime that Should Never Pay
Aric Lynn Holloway II (plaintiff), appealed the stipulated order of dismissal in favor of defendant-appellee, Citizens Insurance Company of the ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
