Invoking the legal equivalent of "you snooze, you lose," the Sixth Circuit Court of Appeals found a farmer slept on its right to argue on appeal that an exclusion in its insurance policy was ambiguous. The decision, Arbre Farms Corp. v. Great American E&S Insurance Co., affirmed a district court ruling that the farmer was not entitled to coverage under its product recall policy based on a prior knowledge exclusion. Arbre Farms grows and sells vegetables. In 2019, ... Keep Reading »
About Alex B. Silverman
Delaware Court Finds Appraisal Proceeding Is Not a Claim “for a Wrongful Act” and Dismisses $177M Coverage Action
The Superior Court of Delaware rebuffed efforts by a policyholder to recover defense costs and interest it incurred in connection with an underlying appraisal proceeding, agreeing with the defendant-insurers that the proceeding did not seek redress “for a wrongful act.” The Appraisal Action Jarden LLC f/k/a Jarden Corp. was a holding company for a number of well-known consumer brands. In December 2015, Jarden agreed to merge with Newell Rubbermaid Inc. for cash ... Keep Reading »
Colorado Federal Court Finds “Kona” Class Actions Did Not Trigger “Personal and Advertising Injury” Insuring Agreement
A Colorado federal court relieved the Travelers Indemnity Company of America and Travelers Property Casualty Company of America of any obligation to defend or indemnify two putative class actions, finding neither action implicated the insuring agreement for "personal and advertising injury" contained in several Travelers commercial liability policies. The Underlying Actions Two underlying class actions were filed in Washington federal court against various coffee ... Keep Reading »
New York Court Finds Securities Settlements Not Covered by D&O Policies Due to Insured Capacity and Uninsurable Loss Issues
A New York trial court recently granted summary judgment to a group of excess D&O insurers seeking a declaration that their policies do not cover settlements and consent judgments the defendants paid in connection with underlying securities actions. The decision emphasizes the insured capacity limitation in the D&O policy definition of a “wrongful act” and also reinforces that amounts paid as disgorgement are uninsurable as a matter of New York ... Keep Reading »
Ninth Circuit Adopts General Rule Regarding Circumstances in Which Excess Insurers May Dispute Exhaustion of Underlying Insurance
Addressing an issue of first impression, the Ninth Circuit recently adopted a general rule that will sharply limit the ability of excess insurers to second-guess payment decisions made by lower-level insurers. Subject to limited exceptions, the court concluded that an excess carrier generally cannot challenge decisions underlying insurers made with respect to earlier, unrelated claims, as a basis for arguing that its own layer of coverage has not yet been reached. AXIS ... Keep Reading »
Washington Federal Court Finds Attorney-Client Privilege Waived by Claims Handler’s Inadvertent Disclosure of In-House Counsel’s Coverage Opinion to Defense Counsel
A federal district court in Washington recently held that a claims handling mishap resulted in a waiver of the attorney-client privilege otherwise protecting a coverage opinion provided by the insurer’s internal legal department. The Underlying Action & Internal Claims Handling Phoenix issued a liability policy to Diamond Plastics Corporation (Diamond), which supplied sewer and water pipes to H.D. Fowler (Fowler). The pipes were installed during a utility ... Keep Reading »
Iowa Supreme Court Finds Fatality Allegedly Caused by Gross Negligence Was a Potential “Accident” Under CGL Policy
Coverage under most commercial general liability (CGL) policies applies only to liability arising from an “accident.” As such, injury or damage that an insured “expected or intended” to occur is not covered. But whether an insured subjectively intended to cause injury may be difficult to determine, even when the conduct itself was clearly intentional. In a recent decision by the Supreme Court of Iowa, the court examined a related, if not potentially more difficult, ... Keep Reading »
Ransomware Attack Replacement Costs Are Covered “Direct Physical Loss or Damage” Under Standard Business Owner’s Policy, According to Maryland Federal Court
A Maryland federal court recently weighed in on the still-murky world of insurance coverage for cybersecurity losses, finding replacement costs necessitated by a ransomware attack were “direct physical loss or damage” to a computer system within the meaning of a business owner’s policy. Even as insurers continue efforts to develop cyber insurance products, National Ink demonstrates potential exposure to carriers under existing non-cyber ... Keep Reading »
Court Finds Animals Incapable of Vandalism or Malicious Mischief for Insurance Purposes (and all other purposes, too)
I am willing to go out on a limb and say that if asked whether an animal, say, a raccoon, is capable of committing malicious criminal acts, most humans would agree that the issue is beyond dispute. But, alas, most humans would be wrong (apparently it very much can be disputed). There is good news, however. The nation’s courts have been quietly tackling the issue, and, thankfully, they have been able to allay any fear of a raccoon uprising occurring in the near future. A ... Keep Reading »
EDNY “Teas” It Up On Additional Insured, Finds Insurer May Withdraw Defense and Recoup Defense Costs
Given the broad duty to defend rules in most jurisdictions, liability insurers often find that they must — or perhaps should out of an abundance of caution — defend an insured against a claim that in all likelihood will not implicate the duty to indemnify, such as when extrinsic evidence strongly suggests that an exclusion will apply. In these situations, insurers in many states are permitted to offer a defense under a reservation of rights to withdraw and seek ... Keep Reading »