Originally published by Robert Trautmann.
Commercial insurance policies are often complex agreements with many levels of coverages, sub-limits and exclusions. Negotiations of policy terms often take time and lots of back and forth between the prospective policyholder and the insurance carrier. Because of this, these sorts of policies are often multiyear agreements that will include automatic renewal language or a promise to offer a renewal. A recent Third Circuit Court of Appeals opinion in a Pennsylvania case speaks to what can be considered a renewal.1
In Indian Harbor Insurance Company v. F&M Equipment, LTD, the question was whether Indian Harbor breached its initial insurance policy with F&M when it offered a “renewal” that contained substantially different terms than the initial policy. The initial policy issued by Indian Harbor to F&M was for a 10-year term with $14 million in coverage. Near the expiration of the initial 10-year policy, Indian Harbor offered a “renewal” with a new…
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