Potential Six-Year Delay in Notice of Flood and Mold Damage “Substantially Prejudiced” Insurer In Atain Specialty Insurance Company v. Carolina Professional Builders, LLC et al., 2:18-cv-2352-BHH (D.S.C. Oct. 2, 2020), a federal judge in South Carolina granted summary judgment to an insurer after finding that the record clearly supported that although flood and mold damages may have occurred during the policy period, that damage was distinct from the damage being ... Keep Reading »
Seventh Circuit Rejects Insured’s “Claim Within a Claim” Argument
The Seventh Circuit Court of Appeals recently had occasion to clarify the parameters of a “claim” in insurance policies. In Market Street Bancshares Inc. v. Federal Insurance Co., Judge Kanne penned an opinion holding that a legal argument appearing in an already uncovered “claim” cannot itself constitute a “claim” for purposes of liability policies. This insurance coverage dispute involved an almost two-decade-long underlying lawsuit against the insured, a bank, long ... Keep Reading »
Pennsylvania Court Ices General Reservation of Rights Letters: Insurers Must Specify “Emergent Coverage Issues”
In Selective Way Insurance Co. v. MAK Services Inc., the Superior Court of Pennsylvania reversed an insurer-favorable summary judgment after finding that its reservation of rights letter was insufficient. Following what appeared to be a standard slip-and-fall case, an insurer provided a defense under a reservation of rights to its insured — a snow and ice removal company. Astonishingly, the policy contained a snow and ice removal exclusion, barring coverage for bodily ... Keep Reading »
South Carolina Supreme Court’s Quiet Erosion of Insurers’ Attorney-Client Privilege Rights
One decision that flew under the radar in 2019 continues the recent trend of courts to dispense, under among other things the previously discussed “at-issue” waiver doctrine, with insurers’ fundamental rights to confidentiality with respect to legal advice. In the June 2019 decision In re Mt. Hawley Insurance Co., No. 2018-001170 (S.C. June 12, 2019), South Carolina directed, in response to a certified question from the Fourth Circuit Court of Appeals, the circumstances ... Keep Reading »
War of the Words: Ninth Circuit Reverses Judgment for the Insurer in Rare War Exclusion Case
In Universal Cable Prods. LLC v. Atlantic Specialty Ins. Co., 2:16 cv-04435 PA, (9th Cir. July 12, 2019), the Ninth Circuit reversed the district court’s determinations as it relates to the application of two war exclusions. In the summer of 2014, Universal Cable Productions was filming a television series, Dig, in Jerusalem. During filming, hostilities arose in the region as Hamas, a Palestinian political movement, began firing rockets from Gaza into Israel. The ... Keep Reading »
California Federal Court Holds Scope of Duty to Defend Is Determined by the Language of the Contract
In Harper Construction Co. v. National Union Fire Insurance Co. of Pittsburgh, No. 3:18-CV-00471-BAS-NLS (S.D. Cal. Mar. 28, 2019), the Southern District of California rejected an insured's attempt to expand a CGL policy's definition of "suit" to encompass mere demands without a formal proceeding for damages. In 2007, the federal government awarded a contract for a military training facility in Fort Sill, Oklahoma, to an insured general contractor. After structural ... Keep Reading »
Clearing the Air: Tenth Circuit Strikes Down an Indoor Air Quality Exclusion, Citing Ambiguity
Ambiguity strikes again. While the heavily litigated pollution exclusion is well-known in the insurance world, its progeny—the indoor air exclusion—only recently has started making its way around the block. Insurers should be aware of the trend in cases holding that indoor air quality exclusions are ambiguous. Such holdings are resulting in courts applying a strict and narrow construction. For example, in Siloam Springs Hotel v. Century Sur. Co., No. 17-6208 (10th Cir. ... Keep Reading »