Main Page Not logged inLogin

For questions, changes or clarifications regarding the Insurance Coverage Resources, please contact

Last Reviewed / Modified On 13 May 2020.

NEVADA INSURANCE COVERAGE RESOURCES

Contents [hide]

Insurer’s Duty to Defend

Four Corners Rule

An insurer is required to defend any suit that potentially implicates coverage. See Rockwood Ins. Co. v. Federated Capital Corp., 694 F.Supp. 772 (D.Nev. 1988); United National Ins. Co. v. Frontier Ins. Co., Inc., 120 Nev. 678, 686, 99 P.3d 1153, 1158 (2004). The determination of “whether an insurer owes a duty to defend is achieved by comparing the allegations of the complaint with the terms of the policy.” United National, 120 Nev. at 686.

The Nevada district court has concluded that if the Nevada Supreme Court addressed the issue of whether Nevada follows the “four corners” rule, it would adopt the four corners rule. Andrew v. Century Sur. Co., No. 2:12-CV-00978-APG, 2014 WL 1764740 at *6 (D. Nev. 2014).

Consideration of Extrinsic Evidence

Under Nevada law, liability insurer had duty to defend under the terms of the policy and the four corners of the complaint despite the fact that other extrinsic evidence arguably takes the matter outside of coverage. Great American Ins. Co. of New York v. North American Specialty Ins. Co., 542 F. Supp. 2d 1203 (D. Nev. 2008) (noting that under Nevada law determinations as to duty to defend are achieved by comparing the allegations of the complaint and the terms of the policy.)

Occurrence Requirement

General rule

Nevada Supreme Court has defined “accident,” as “a happening that is not expected, foreseen, or intended.” Beckwith v. State Farm Fire & Cas. Co., 120 Nev. 23, 83 P.3d 275, 276 (2004).

Faulty workmanship and construction defect claims

The district court, predicting how the Nevada Supreme Court would rule, held that “faulty workmanship itself does not fall under the common meaning of an accident, and therefore is not an occurrence,” however, “an unexpected happening caused by faulty workmanship could be an occurrence.” Big-D Const. Corp. v. Take it for Granite Too, 917 F.Supp. 2d 1096, 1108 (2013). The court further held “Nevada therefore likely would follow the courts which recognize that although faulty workmanship itself is not an accident, the unexpected consequences of that faulty workmanship is an accident.” Id.

Bodily Injury Requirement

Emotional distress

The district court, addressing an issue of first impression, held that wife’s emotional distress from witnessing her husband’s fatal motorcycle accident qualified as a “bodily injury.” Brewington v. State Farm Mut. Auto. Ins. Co., 45 F.Supp. 3d 1215, 1219-1220 (2014).

Consideration of physical manifestations

See above. A claim for purely emotional distress held to qualify as a “bodily injury” in district court. Brewington v. State Farm Mut. Auto. Ins. Co., 45 F.Supp. 3d 1215, 1219-1220 (2014).

Property Damage Requirement

Purely economic loss

Nevada Supreme Court held that the insured’s negligent welding was not “property damage.” United National Ins. Co. v. Frontier Ins. Co., Inc., 120 Nev. 678, 689. Although not directly addressing the issue of whether purely economic loss qualifies as “property damage,” the court noted that “improper welding or general negligent acts as intangible, economic injuries and not the type of physical, tangible injury or destruction to property that a reasonable person would contemplate as covered under the policy.” Id.

Loss of use

The Supreme Court of Nevada held that under both prongs of the definition of “property damage,” including the “loss of use” prong, there must be a tangible, physical injury to property that occurs during the policy period for coverage to be triggered. United Nat. Ins. Co. v. Frontier Ins. Co., Inc., 120 Nev. 678, 685 (2004).

Trigger of Coverage for Latent Injury i.e. exposure to asbestos, silica and lead paint

Continuous trigger

The Nevada Supreme Court applied the “manifestation” rule to a first party insurance case where a homeowner was experiencing ongoing property damage to their home. Jackson v. State Farm Fire & Cas. Co., 108 Nev. 504, 509, 835 P.2d 786, 789 (1992). The court in Jackson commented that, in asbestos cases, the continues trigger should apply, noting “the need to apportion astronomical damages associated with asbestos supports the equal exposure rule [continuous trigger].” Id.

Injury-in-fact trigger

Not applicable.

Another trigger

Not applicable.

Trigger of Coverage Non-Latent Injury

General

Construction Defect Claims

The manifestation trigger applies to first party insurance cases. See Jackson v. State Farm Fire & Cas. Co., 108 Nev. 504, 835 F.2d 786 (Nev. 1992).

Duty to Defend Covered and Uncovered Claims

There is a duty to defend whenever there is a potential for coverage. United National Ins. Co. v. Frontier Ins. Co., Inc., 120 Nev. 678, 686-87 (2004).

Duty to defend contractual indemnity and common law indemnity claims

General contractor against insured

An indemnity provision stating that a party must indemnify and defend an indemnitee for the indemnitees sole negligence must be expressed in clear and unequivocal terms. George L. Brown Ins. Agency v. Star Ins. Co., 237 P.3d 92 (2010). Further, an indemnity provision providing that a party must indemnify and defend an indemnitee for the indemnitees contributory negligence must also be expressed in clear and unequivocal terms. Reyburn Lawn & Landscape v. Plaster Dev. Co., Inc., 255 P.3d 268 (2011) (holding that a general statement of indemnity will not be sufficient).

Is there an anti-indemnification statute?

Yes, effective in 2015. See N.R.S. § AB 125, § 2 (2015).

Insurer’s Wrongful Refusal to Defend

Reliance on coverage defenses to deny indemnity

The district court, predicting how the Nevada Supreme Court would rule, held that when an insurer breaches the duty to defend it is bound by the resulting default judgment and cannot “re-litigate any issue of coverage that would contradict the facts necessary to the insured’s liability in the underlying action.” Andrew v. Century Surety Co., 134 F.Supp. 3d 1249, 1265 (2015). The court further held that the insurer is bound by the default judgment unless “the settlement agreement and subsequent default judgment were unreasonable, fraudulent, or collusive.” Id.

Conditions of Coverage

Late notice

Factors considered to determine if coverage is forfeited

Nevada follows the “notice-prejudice” rule. Before an insurer can deny coverage because of late notice, the insurer must show that the notice was late and that the insurer was prejudiced by the late notice. Las Vegas Met. Police Dept. v. Coregis Ins. Co., 256 P.3d 958, 965 (Nev. 2011).

Prejudice requirement

See above.

Meaning of “arising out of”

Coverage grants/agreements

In Nevada, “arising out of” is construed broadly, does not require causation, but rather “broadly linked a factual situation with the event creating liability and connoted ‘only a minimal causal connection or incidental relationship.’” Federal Ins. Co. v. American Hardware Mut. Ins. Co., 124 Nev. 319, 327, 184 P.3d 390, 395 (2008).

Exclusions

See above. The meaning of the phrase is the same.

Other policy forms

See above. The meaning of the phrase is the same.

Coverage for punitive damages

Insurable?

The Supreme Court of Nevada limited the coverage available under uninsured motorist coverage to bodily injury, which is compensatory in nature, and found that bodily injury does not include punitive damages. Siggelkow v. Phoenix Ins. Co., 846 P.2d 303 (Nev. 1993); Lombardi v. Maryland Casualty Co., 894 F.Supp. 369, 372 (D. Nev. 1995) (holding that “[t]he Nevada Supreme Court clearly prohibits, on grounds of public policy, indemnification for punitive damages.”).

Distinction for statutory multiple damages?

No cases.

Additional Insured Endorsement

Contract or writing required

No cases.

Analysis and factors considered for liability arising out/caused by of the named insured’s work

Construed broadly in favor of coverage. “[W]hen an additional insured endorsement simply covers liabilities arising out of operations of the named insured performed for the additional insured, that endorsement includes coverage for liabilities caused by the additional insured’s direct negligent acts, so long as those acts are connected to the named insured’s operations performed for the additional insured.” Federal Ins. Co. v. American Hardware Mut. Ins. Co., 124 Nev. 319, 329, 184 P.3d 390, 397 (2008).

Coverage B- Personal and Advertising Injury

Meaning of publication for “oral or written publication of material, in any manner, that violations a person’s right of privacy” offense

No Nevada cases address this.

^ Back to Top