Progressive Losses

1) Introduction to the topic
a) Damage that continues to develop over time
b) May go undetected for some period of time
2) Typical progressive loss case
a) 1977 Application
b) Water damage reports
c) Engineer’s report
d) Ins. co. paid for all resulting loss
e) Suit Limitation
f) “New” damage
g) Problems/concerns
i) Neglect exclusion
ii) Waiver
iii) Estoppel
3) Typical issues in a progressive loss case
a) Multiple insurance companies
b) Timely notice from the insured
c) Timely suit
d) Causation issues
e) Neglect of the insured
f) Newly manifested damages
g) Waiver and Estoppel
4) Recap

1) Suit limitation time period
2) Four key dates
a) Trigger
b) Suit time stops
c) Suit time starts again
d) Suit time in totality
3) Inception of the loss, i.e. trigger
a) Injury in fact trigger
b) Manifestation of appreciable damage trigger
c) Policy language trigger
d) Continuous trigger theory
4) Manifestation of Appreciable Damage rule
a) Example
b) Analysis
5) Recap

1) Manifestation of Appreciable Damage rule [continued]
a) Insured’s coverage knowledge irrelevant
b) Example
c) “Manifestation of appreciable damage”
i) triggers reporting duty
ii) which successive insurer is responsible
iii) “suit” condition trigger
d) Insured’s diligence or lack thereof
i) actual knowledge
ii) diligent in the face of discovered facts
iii) substantiality
iv) unreasonableness as a defense
2) Trigger – review
3) Recap

1) Defined – Statutory or Equitable
2) Statutory tolling
a) Illinois Revised Statute example
b) Majority – Equitable tolling
c) One-year from date of loss – no tolling
3) Equitable tolling
a) Introduction
b) Statutory tolling distinction
i) equitable tolling from notice to the insurer
ii) until unequivocal resolution of the claim
c) Graphical representation
d) Fair Claims Settlement Practices Regulation
e) “Unequivocal resolution”
4) Criminal prosecutions
5) Implied Covenant of Good Faith and Fair Dealing
6) Recap

1) Later discovered damage
2) Predominant cause
a) Predominant versus contributing cause example
b) Intervening cause
c) Newly manifested damage?
3) Waiver and Estoppel
4) Common scenarios involving waiver/Estoppel
5) Cannot create coverage by waiver
6) Cannot waive rights by conduct after the suit limitation period
7) Best “insurance” against claims of waiver/Estoppel
8) Recap

1) Number of losses/occurrences
2) Proving the predominant cause
3) Exclusions
a) Direct and ensuing loss
b) Neglect of the insured exclusion
i) Defined
ii) Example
iii) precludes both direct and ensuing loss
4) Review
a) When did the loss occur
b) Reporting duty of the insured
c) Which policy will respond
d) Suit condition trigger
e) Tolling
f) When suit time starts again
g) Neglect exclusion
h) Waiver/Estoppel
5) Questions
6) Recap