“Accident” Includes Continuous or Repeated Exposure to Conditions
Post 5176
“Occurrence” is an Accident & Includes Repeated Damage
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In The Cobblestone Lofts Condominium v. Great American Insurance Company, Admiral Indemnity Company et al., Appeal No. 4265, 2025 NY Slip Op 04749, Index No. 653189/21, Case No. 2024-01860, Supreme Court of New York, First Department (August 21, 2025) the court resolved the issues.
FACTS
The Supreme Court of New York, First Department (trial court) dealt with a declaratory judgment action concerning an insurance coverage dispute. The plaintiff, a condominium association, was being sued for property damage and bodily injury caused by unintended water and moisture infiltration, resulting in toxic contamination of a condominium unit. The infiltration was allegedly caused by the plaintiff’s breaches of its contractual obligations under its bylaws and condominium declarations, as well as violations of statutory duties under the Multiple Dwelling Law and the Administrative Code of the City of New York.
PRIMARY ISSUE
The was asked to resolve whether the Great American Insurance Company was obligated to provide coverage for the plaintiff under its policy. The policy covers liability for bodily injury and property damage caused by an “occurrence,” which includes continuous or repeated exposure to harmful conditions.
Great American argued that the alleged damages were caused by the plaintiff’s breaches of its bylaws and condominium declarations, and not by an accident. However, the term “occurrence” in the policy includes continuous exposure to harmful conditions caused by breaches of contract or statutory violations.
THE ORDER
The Supreme Court, New York County (Louis L. Nock, J.), order granted plaintiff’s motion for summary judgment on its second cause of action declaring that defendant Great American Insurance Company was obligated to provide coverage for plaintiff.
Great American issued a “direct, definitive notice” to plaintiff disclaiming coverage. By letter dated September 17, 2018, Great American notified plaintiff that its policy does not afford coverage because:
1. a breach of contract is not an accident and, therefore, does not constitute an “occurrence” under the Primary Policy or Umbrella Policy and
2. because the Primary Policy excludes coverage for breach of contract.
Contrary to Great American’s argument, the denial letter is a repudiation of plaintiff’s rights. Great American will be obligated to indemnify plaintiff for any liability imposed upon it in the underlying action that is in excess of the policy issued by Admiral Indemnity Company the primary insurer to Great American’s umbrella policy.
The Great American policy covers liability for bodily injury and property damage “that takes place during the Policy Period and is caused by an ‘occurrence’ happening anywhere…” The term “occurrence” is defined, in relevant part, to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Under this definition, the term “occurrence” includes within its scope continuous exposure to a harmful condition alleged, as in the underlying action, to have been caused by the insured’s breaches of contract or violations of statutory or regulatory duties.
Great American argued that the alleged “bodily injury” and “property damage” were caused by plaintiff’s breaches of its bylaws and condominium declarations, and not by an accident. The policy defines “accident” to include “continuous or repeated exposure to substantially the same general harmful conditions,” which is exactly what was alleged in the underlying action.
The court declared that Great American is obligated to indemnify the plaintiff for any liability imposed in the underlying action that exceeds the policy issued by Admiral Indemnity Company.
ZALMA OPINION
Fortuity is a required element of every liability insurance policy determined by the definition of “occurrence” in the policy. Since the cause of damage was found by the trial court to be a result of continuous or repeated exposure to harmful conditions, it concluded the loss was due to a fortuitous “occurrence” and Great American must pay damages that could be found against the Plaintiff Condominium.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Detail Charging Defendant for Fraud is Sufficient
Post 5242
Read the full article at https://lnkd.in/g_HVw36q, see the video at https://lnkd.in/gpBd-XTg and at https://lnkd.in/gzCnBjgQ and at https://zalma.com/blog plus more than 5200 posts.
Charges that Advises the Defendant of the Crime Cannot be Set Aside
In United States Of America v. Lourdes Navarro, AKA Lulu, No. 25-661, United States Court of Appeals, Ninth Circuit (December 4, 2025) Lourdes Navarro appealed the district court’s denial of her motion to dismiss the indictment and enter final judgment was in error.
FACTUAL BACKGROUND
The indictment alleged that insurers reimburse only for medically necessary services. Navarro performed unnecessary respiratory pathogen panel (RPP) tests on nasal swabs collected from asymptomatic individuals for COVID-19 screening.
Navarro billed over $455 million to insurers for those additional RPP tests that she knew to be medically unnecessary. These allegations constituted a plain, concise, and definite written ...
Louisiana Statute Prevents Enforcement of Contract Term Requiring Arbitration of Disputes
Post 5241
Read the full article at https://www.linkedin.com/pulse/international-convention-requiring-enforcement-award-barry-sttdc, see the video at and at and at https://zalma.com/blog plus more than 5200 posts.
In Town of Vinton v. Indian Harbor Insurance Company, Nos. 24-30035, 24-30748, 24-30749, 24-30750, 24-30751, 24-30756, 24-30757, United States Court of Appeals, Fifth Circuit (December 8, 2025) municipal entities including the Town of Vinton, et al sued domestic insurers after dismissing foreign insurers with prejudice. The insurers sought arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”) but the court held Louisiana law — prohibiting arbitration clauses in such policies—controls, as the Convention does not apply absent foreign parties who ...
Refusal to Provide Workers’ Compensation is Expensive
Post 5240
Read the full article at https://lnkd.in/guC9dnqA, see the video at https://lnkd.in/gVxz-qmk and at https://lnkd.in/gUTAnCZw, and at https://zalma.com/blog plus more than 5200 posts.
In Illinois Department of Insurance, Insurance Compliance Department v.USA Water And Fire Restoration, Inc., And Nicholas Pacella, Individually And As Officer, Nos. 23WC021808, 18INC00228, No. 25IWCC0467, the Illinois Department of Insurance (Petitioner) initiated an investigation after the Injured Workers’ Benefit Fund (IWBF) was added to a pending workers’ compensation claim. The claim alleged a work-related injury during employment with the Respondents who failed to maintain workers’ compensation Insurance.
Company Overview:
USA Water & Fire Restoration, Inc. was incorporated on January 17, 2014, and dissolved on June 14, 2019, for failure to file annual reports and pay franchise taxes. It then operated under assumed names including USA Board Up & Glass Co. and USA Plumbing and Sewer. The business ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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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/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
