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Policy's Wording Is Key to Determining Insured's Coverage in Matters that Do Not Constitute Formal Lawsuits

By Clyde Hettrick

The recent California Supreme Court decisions in Powerine Oil Co. v. Superior Court, Case No. 113295 (Aug. 29, 2005) ('Powerine II') and County of San Diego v. Ace Property & Casualty Ins. Co., Case No. S114778 (Aug. 29, 2005), illustrate the significance the court ascribes to specific wording of insurance policies and the coverage they afford for liability imposed on an insured other than through a formal court judgment. In particular, Powerine II establishes umbrella and excess carriers' possible duty to indemnify insureds for administrative actions or other matters that do not constitute formal lawsuits.

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