In reviewing cases today through my Westclip service, I came across an interesting case: Colorado Division of Insurance v. Auto-Owner’s Insurance Company, 219 P.3d 371 (Colo. Ct. App. 2009). I admit that it takes an odd person to find the case interesting, but these are the types of things that keep my mind working.
In the case, a homeowner obtained a judgment against its homebuilder for construction defects, then sought to recover the judgment from the builder’s insurer. As part of that process, the homeowner complained to the Colorado Department of Insurance regarding the insurer’s refusal to pay the judgment. During its investigation, the DOI asked for a certified copy of the policy from the insurer. When the insurer failed to comply with the request, the DOI levied a fine against the insurer, and the insurer appealed. Ultimately, the Court of Appeals affirmed the DOI’s imposition of a fine.
As attorneys litigating construction defect cases in Colorado, one of the things with which we deal on an ongoing basis is the pursuit of all available coverage for our clients, including through carriers who have issued policies naming our clients as additional insureds. One of the hurdles to obtaining a defense through AI carriers is obtaining the policies necessary to prove to them that they owe such a duty. To accomplish this, we rely heavily on the disclosure and discovery process, including taking records depositions of the involved carriers and of the insurance producers. This can sometimes be a combersome and inefficient process. That is why the Auto-Owner’s case appears interesting. If there is a manner in which to have the DOI request the policies on behalf of the putative additional named insured, that may streamline the process. Its at least something to think about.
If you would like to read more about additional insured coverage for construction defect cases in Colorado, please read our article on the subject, entitled, “Additional Insured and Insured Contract Liability; Insurance Coverage for General Contractors.” If you would like to discuss the topic, please feel free to contact me at (303) 987-9813 or by e-mail at email@example.com.