In Rice Enterprises LLC v. RSUI Indemnity Co., the Third Circuit Court of Appeals affirmed the district court’s finding that the insured was not entitled to coverage from its employer’s liability insurer or its umbrella insurer for an underlying sexual assault lawsuit filed against an owner and operator of multiple McDonald’s restaurants in Pennsylvania. The insurers denied coverage for a negligence lawsuit filed against the insured by an employee arising out of its ... Keep Reading »
Tenth Circuit Interprets Excess Policy’s Definition of “Medical Incident” as Applying to the Injuries of One Single Person
On May 2, 2025, the Tenth Circuit Court of Appeals issued an opinion in AdHealth Limited v. PorterCare Adventist Health Systems affirming the lower court’s summary judgment ruling that a hospital’s excess liability insurance policies’ definition of “medical incident” unambiguously applies to the injuries of a single person, not the treatment of multiple people exposed to the same conditions. As a result, each claim for a “medical incident” must individually exceed the ... Keep Reading »
Divided Ninth Circuit Finds Claimant’s Failure to Provide Medical Records Insulates Insurer From Bad Faith Failure to Settle
If at first you don’t succeed, try, try again. An age-old adage that now provides critical guidance for insurers seeking to protect themselves in the face of bad faith failure to settle claims. In McGranahan v. Geico Indemnity Co., Michael McGranahan appealed a California district court’s order against him that granted Geico’s motion for summary judgment. In the district court, McGranahan asserted that Geico breached the implied covenant of good faith and fair dealing ... Keep Reading »
Eighth Circuit Finds No Coverage Under “Ensuing Loss” Provision Under Arkansas Law
“Ensuing loss” provisions have long been the subject of nuanced arguments in insurance litigation. The provisions, which sometimes afford coverage for a “covered loss” stemming from an expressly excluded peril, serve as fodder for policyholders to attempt to argue a policy is ambiguous, often where the losses are clearly excluded. Ensuing loss provision disputes can be fact-intensive and should be evaluated carefully. While this area of the law is generally ... Keep Reading »
Texas Appeals Court Finds Project Owner Excluded From Coverage as Claimants’ Statutory Employer
On April 3, 2025, a Texas state appeals court reversed a trial court order awarding Exxon Mobil $25 million under an umbrella insurance policy issued by Lexington Insurance Co. to Brock Services Ltd. The appeals court found that the umbrella policy’s employer’s liability exclusion applied to preclude coverage for bodily injury claims made against Exxon given its status as a “statutory employer” of the injured claimants. Brock Services contracted with Exxon to provide ... Keep Reading »
Seventh Circuit Holds Liability Carrier Did Not Act in Bad Faith by Paying Underinsured Motorist Benefits After Four Years of Negotiations
In Wolf v. Riverport Insurance Co., the Seventh Circuit Court of Appeals affirmed the district court’s holding, under Illinois law, that an underinsured motorist insurer did not breach its insurance contract, and no implied duty of good faith and fair dealing was implicated, where the insurer resolved the claimant’s claim for underinsured motorist benefits after negotiating with the claimant for four years. The claimant suffered multiple pelvic fractures as a result ... Keep Reading »
New York Federal Court Enforces Exclusion Barring Coverage for Claims Based on Any Misrepresentation, Regardless of Perceived Materiality
When state law provides that an insurance contract can be rescinded for misrepresentations only if they are “material,” can an insurer contract around that rule by adding an exclusion for all claims based on any misrepresentation, regardless of materiality? The Southern District of New York says “yes” in Mt. Hawley Insurance Co. v. Beach Cruiser LLC. The insureds were the owner and property manager of various rental properties, including a house in downtown ... Keep Reading »
Eleventh Circuit Holds Course of Construction Exclusion Applies to Water Damage as Project Was Not Fully Complete
In Liberty Surplus Insurance Corp. v. Kaufman Lynn Construction Inc., the Eleventh Circuit Court of Appeals held that a “course of construction exclusion” in a commercial general liability precluded coverage for water damage caused by a hurricane during a construction project. However, the court found that the insured had standing to assert a claim for reformation of the insurance policy due to mutual mistake, even though the insured was not necessarily making a claim ... Keep Reading »
California Appellate Court Agrees Marijuana Delivery Driver’s Accident Not Covered Under Personal Auto Policy
A California Court of Appeals decision brought one auto policyholder decidedly down from “cloud nine” in Murphy v. AAA Auto Insurance of Southern California, which found no coverage over a cannabis delivery service employee’s collision in a personal vehicle while on the job. The court ruled the “compensated carrying exclusion” barred coverage, holding it was neither ambiguous nor contrary to public policy in this instance. The insured, Andrew Murphy, was a full-time ... Keep Reading »
Recent Denial of Business Interruption Coverage to Cannabis Manufacturer Highlights Importance of Diving Into the Weeds of Insured’s Business Practices
In Theraplant LLC v. National Fire & Marine Insurance Co., the U.S. District Court for the District of Connecticut denied the insured cannabis cultivator’s claim for business interruption coverage because the insured failed to demonstrate a causal link between its loss and the suspension of its operations. The insured, Theraplant, suffered a loss when a fire at its facility in Watertown destroyed 998 marijuana plants and damaged one of seven flowering rooms. After ... Keep Reading »
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