In a non-precedential decision, the Third Circuit Court of Appeals upheld a district court’s grant of summary judgment to an errors and omissions insurer that declined to indemnify a settlement because the insured had settled the underlying lawsuit without obtaining the insurer’s prior written consent, “an express condition of coverage under the policy’s consent clause.” Interestingly, the court noted that the E&O insurer had paid the insured’s “defense costs to the ... Keep Reading »
About Charles W. Stotter
PSA: Second Circuit Issues Reminder of the Consequences for Lack of Specificity in Disclaimers of Coverage for Personal Injury Claims Under New York Law
We have previously discussed the requirements imposed on insurers by New York law to inform insureds seeking coverage for death or bodily injury to describe any disclaimer of coverage “with a high degree of specificity of the ground or grounds on which the disclaimer is predicated.” In Philadelphia Indemnity Insurance Co. v. Yeshivat Beth Hillel of Krasna Inc., the Second Circuit Court of Appeals recently illustrated the consequences of failing to disclaim with such ... Keep Reading »
New Jersey Federal Court Holds Virus Exclusion Bars Coverage for Car Dealerships’ COVID-19 Losses; Rejects Public Policy Argument Based on Pending Legislation
We previously described a proposed New Jersey bill that was introduced to the state assembly in March 2020 that would require insurers to cover business interruption losses related to the novel coronavirus pandemic. Almost a year later, the proposed bill has yet to be voted on by the legislature — and the stalled bill is causing significant roadblocks for policyholders who wish to rely on it to escape the application of virus exclusions in property insurance policies to ... Keep Reading »
Target Data Breach Not Covered Under CGL Policy: Court Rejects “But-For” Theory for Loss of Use Damages Where There Was No Evidence of Value of the Use of Payment Cards
Following a 2013 data breach in which the credit and debit card information of more than 110 million customers was stolen or exposed, Target Corp. sought coverage from its CGL insurers for $74 million that it incurred in settlements with various banks (the credit and debit card issuers) for their costs in issuing new payment cards (both credit and debit cards) to the customers. In a recent decision on the parties’ cross-motions for summary judgment, the U.S. District ... Keep Reading »
Outlier Decision of New York Appellate Court Denies Insurer’s Right to Recoup Defense Costs Even Though Court Found No Duty to Indemnify
Recoupment of defense costs (defense fees and costs) by insurers in the absence of a duty to indemnify under a liability policy is an unsettled issue in many states. In a recent decision, a New York intermediate appellate court held that even though there was no duty to indemnify an underlying personal injury action under a CGL policy, the insurer could not recoup the defense costs it had advanced under a reservation of rights (ROR) letter where the policy at issue ... Keep Reading »
Louisiana, Pennsylvania, and South Carolina Join in Introducing Legislation That Would Force Insurers to Retroactively Cover COVID-19 Losses
An increasing number of state legislatures have recently introduced measures that would require the insurance industry to bear much of the burden of business interruption and other losses due to the economic downturn brought on by the global COVID-19 pandemic. Louisiana, Pennsylvania, and South Carolina are among the latest states to join in proposing legislation that would require retroactive coverage for business interruption losses related to COVID-19, despite ... Keep Reading »
New York Among the Latest States to Propose Legislation That Would Require Insurers to Cover COVID-19 Business Interruption Losses
We previously described here proposed New Jersey legislation that would also compel coverage of business interruption claims based on COVID-19 losses. The New Jersey bill was voted out of the New Jersey Assembly’s Homeland Security and State Preparedness Committee but continues to be the subject of negotiation among insurance industry representatives and the bill’s sponsors. Ohio, Massachusetts, and now New York have since followed New Jersey’s lead, introducing bills ... Keep Reading »