Sentinel Insurance Co. v. VLM Foods Inc. arose after a hepatitis A outbreak was traced back to contaminated strawberries used and sold by several insured smoothie cafe franchises. The insured tendered all of the outbreak claims to its strawberry suppliers, pursuant to several hold harmless agreements. Although the suppliers paid a bulk of the claims, they refused to pay any of the insured’s attorneys’ fees and costs incurred in defending the outbreak claims, which were ... Keep Reading »
Pennsylvania Federal Court Refuses to Dismiss Bad Faith Claim, Even Though Insurer Timely Made Demanded Payments
There have been more developments in Ironshore Specialty Insurance Co. v. Conemaugh Health System Inc., the case brought by Ironshore, as excess carrier, to seek reimbursement of amounts paid in an underlying medical malpractice settlement. While we previously reported that the court denied Conemaugh's (the insured's) motion to dismiss, the court has now also ruled that Conemaugh's counterclaims for bad faith can move forward, despite the fact that Conemaugh did not ... Keep Reading »
Is Your “Securities Claim” Actually Covered Under Your D&O Policy? A Review of In Re Verizon Insurance Coverage Appeals
The question of what constitutes a "securities claim" in the context of public company D&O policies is often debated in insurance coverage disputes, and the answer to this question can have significant effects on the scope of what insurance companies would be forced to cover under these policies. In In re Verizon Insurance Coverage Appeals, the Delaware Supreme Court reversed an earlier Superior Court ruling that, if upheld, would have considerably broadened that ... 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 »