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Survey Article


What constitutes an "occurrence," as defined by a commercial general liability policy, was again a significant focus of the appellate courts during the survey year. The Georgia Supreme Court finally resolved opposite positions taken by federal courts and state courts in Georgia, deciding that negligent faulty workmanship by a contractor resulting in damage to other property constitutes an occurrence. However, when an insured acts negligently, but with foresight, expectation, or design, such conduct will not be a covered occurrence. The Georgia Court of Appeals also reinforced the correct legal standard to consider when deciding whether an insured is justified in failing to provide timely notice of a claim to its insurer.

In the property insurance policy arena, the doctrines of implied waiver and estoppel based upon the conduct of an insurer or agent generally cannot create coverage under a policy where coverage does not otherwise exist. Moreover, courts continue to show their propensity to enforce policy language as clearly written, even if the insured contends such enforcement is unfair under the circumstances. Also, diminution of value is not a recoverable loss under commercial property policies. In addition, an assignment of a claim cannot overcome a forfeiture of coverage caused by the voluntary payment doctrine. Moreover, suit limitation clauses that are not less than two years are enforced and are not extended to the six-year statute of limitations for breach of contract claims. Lastly, a policy of title insurance covers a forged deed.

With respect to auto insurance policies, a liability carrier's payment of a hospital lien does not reduce the limit of liability available to pay an uninsured motorist claim. Courts remain split on whether an insurer must offer uninsured motorist coverage when doing so would conflict with sovereign immunity or with specific limitations of a statutorily created insurance company. The lack of timely notice defense is available to an automobile insurer when the insured does not provide notice, even though the carrier is aware of the accident through other sources. A renter of a vehicle who violates the rental agreement may forfeit coverage provided by the rental company. Finally, in several factually diverse cases, courts addressed whether a driver who causes an accident qualifies as a permissive user thereby entitling the driver to coverage under an automobile liability policy.

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