New York, NY - In an effort to avoid Preferred Contractors Insurance Company lawsuit, Bentley & More LLP aldermen & riedel LLP filed a Notice of Default on a contractual agreement between the parties. On September 7, the parties met with the consent of the court for an opportunity for negotiation. On September 8, the court issued an order granting the parties' request for a default on the contract. On September 10, the parties met for final negotiations. Following are major highlights from the content of Bentley & More LLP's anderman & rider's Notice of Default:
The parties agree that they have reached an agreement whereby the Preferred Contractors Insurance Company will not file a tort claim against any of the named defendants in the case. The parties also agree that they have determined that the insured's claims against the other defendants in the case will not result in catastrophic personal injury damages.
Section 3420 (b) (2) of the proposed agreement provides that the Preferred Contractors Insurance Company will disclose to the general contractors that the Preferred Contractors Insurance Company will not be responsible for punitive damages, as long as the contractors comply with the disclosure requirement. The Preferred Contractors Insurance Company will also disclose to the general contractors that it will not be responsible for indirect or incidental losses. Finally, the Preferred Contractors Insurance Company will provide the general contractors with a blanket "disclaimer of warranties," so long as the general contractors comply with the disclosure requirement. The companies have 30 days to comply with the terms of the disclaimer. If the contractor does not comply, the company will have to notify the state attorney general and the contractor will lose its privilege to sell Preferred Contractors Insurance.
The second section is divided into two parts. The first part is the Preferred Contractors' Obligation to Disclose Coverage and the second part is the Preferred Contractors' Liability for Non-Disclosure. The first part requires that the Preferred Contractors make available to the insureds, a copy of the Preferred Contractor's Insurance Policy and the policy design. The second part requires that the insureds promptly disclose to all who are or become involved in the project, (I) all the names and addresses of the Preferred Contractors and their Affiliates, (ii) all material conditions and restrictions under which the project was carried out and (iii) all the circumstances under which the Preferred Contractors bears responsibility for non-disclosure. Failure to timely and promptly disclose coverage creates a duty to comply with the requirement in the second paragraph of the second section.
Under the third section (section 3420 (d) (2) the insurance company must identify risks. One of those risks is an incident that might cause harm to another person or to a third person. Any reference to an incident that might cause harm to another person is construed as a limitation. This limitation can be illustrated by a statement that "any incident that causes physical injury to one person or to one hundred fifty (five hundred) other persons" is a limitation.
Each policy will specify the maximum limits under which the Preferred Contractors is liable. Examples are: If it is found that a member of the Preferred Contractors has violated any provision of the policy such as the limit on liability for workers compensation, then the insurance company will have to pay for any death or injury that results from that violation. In addition, if an employee of the Preferred Contractors is found to have caused a death or injury that would otherwise have been prevented under applicable laws, the insurance company will have to pay for the victim's loss. A company cannot prevent the victim's loss.
There are a number of exclusions that may be included in a Preferred Contractor's Insurance policy. An exclusions list consists of words that are used to describe a risk or a limitation on a policy. The insurance company will either attempt to exclude all risks or all limitations. For example, if it is found that the insured has created an account under an HSA for health-related issues and has paid into that account. The insurance company will consider the income of the person who receives benefits from this account and excluded the risk of disability income. The words that are usually found on an exclusions list are: income protection, personal property protection, lifetime benefit increase, and accident benefit increase.
It is necessary that the Preferred Contractors Insurance Company have a preferred contractor's insurance policy in effect prior to allowing the contractors to do business in their state. The insurance company must also ensure that there is compliance with prevailing professional licensing laws for each state in which the contractor wishes to do business. When the Preferred Contractors Insurance Company issues a Preferred Contractor's Insurance policy to a contractor, it is important that the contractor is aware of the terms of the policy.
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