In State Farm Fire and Casualty Co. v. Motta, et al., No 18-cv-3956 (E.D. Pa. Dec. 11, 2018), the Eastern District of Pennsylvania Court held that State Farm Fire and Casualty Co. had a duty to defend a teenage boy against a lawsuit accusing him of cyberbullying one of his classmates that led her to commit suicide, under the boy’s mothers’ homeowners insurance policy. Julia Morath died by suicide within a couple of days of Zach Trimbur attacking her, via text message ... Keep Reading »
Duty to Defend
Second Circuit Holds “Offering for Sale” Is “Advertising Injury” Under CGL Policy, But Allegation Not Enough to Trigger Duty to Defend
Several months ago we blogged about the duty to defend advertising injury claims under commercial general liability (CGL) policies, noting that many courts continue to struggle with the practical application of basic duty to defend principles in this context. The court in that particular case had no such issues. In a more recent decision, however, the potential complexities of this task were on full display. See High Point Design LLC v. LM Insurance Corp. et ... Keep Reading »
Nevada Supreme Court Holds That Insurer’s Liability for Breach of the Duty to Defend is Not Capped at Policy Limits
In Century Surety Company v. Dana Andrew (Dec. 13, 2018), the Nevada Supreme Court issued an opinion regarding whether, under Nevada law, the liability of an insurer that has breached its duty to defend, but not acted in bad faith, is capped at the policy limit plus any costs incurred by the insured in mounting a defense, or whether the insurer is liable for all losses consequential to the insurer's breach. Ryan Pretner ("Pretner") and Pretner's guardian (Respondents) ... Keep Reading »
Intentional Accidents: California Supreme Court Announces that General Commercial Liability Policies Apply to Negligent Hiring, Training, and Supervising Claims for Failing to Prevent Intentional Torts
In a recent decision, the U.S. Court of Appeals for the Ninth Circuit observed that under California law, there was an unresolved question as to whether a commercial general liability (“CGL”) insurance policy covers an employer-insured for negligently failing to prevent an employee’s intentional misconduct. In essence, it was unclear whether such an incident constituted an “occurrence” that only covers “accidents,” as an intentional act cannot, by definition, be an ... Keep Reading »
Six Degrees of Separation: Eleventh Circuit Upholds a Broad ‘Related Claims’ Provision
“Related Claims” provisions in directors and officers (D&O) and errors and omissions (E&O) policies, while common, can spawn disagreement as to scope and application. Beyond these substantive questions, an issue arises as to what information a court may consider in determining whether two or more claims are “related” within the meaning of a given policy. The Eleventh Circuit recently analyzed this issue in Health First, Inc. v. Capitol Specialty Insurance ... Keep Reading »
Eleventh Circuit Finds Exclusion Bars Trademark Infringement and Dependent False Designation and Unfair Competition Claims
Duty to defend principles are generally well-settled in most jurisdictions: If the allegations in an underlying complaint potentially fall within the scope of coverage, the insurer must defend. In many – but not all – jurisdictions, the insurer must defend the entire suit as long as it alleges any potentially covered claims. Once implicated, the duty may be negated if the allegations against the insured fall entirely within a policy exclusion. While ingrained in ... Keep Reading »
Underlying Assertion of Negligent Misrepresentation Is Not Necessarily an Occurrence
Courts sometimes struggle with the issue of whether property damage arising in the context of a contractual relationship, particularly in construction contracts, constitutes an “occurrence” under a standard commercial general liability (CGL) policy. Generally, but not always – and it varies from jurisdiction to jurisdiction – courts regard contractual breaches as non-accidental conduct, and/or apply the so-called “business risk” exclusions (such as the standard CGL “Your ... Keep Reading »
To Defend or Not to Defend? Northern District of Ohio Provides Guidance for Determining Whether to Defend an Arbitration
While the rules for determining whether a liability insurer has a duty to defend a lawsuit are generally well-known, questions can arise when an insurer is asked to defend an arbitration. For example, can an insurer’s duty to defend be determined by looking solely at the initial request for arbitration even if that document is not required to fully clarify the claims asserted and damages sought? According to the Northern District of Ohio’s decision in Maxum Indemnity ... Keep Reading »
The Sentinel Strike: The Hartford’s Gift to New York Insurers in the War to Stop Policyholder Experts from Claiming Ambiguities Exist in Clear Policy Exclusions
In this age of exponentially increasing technology, we can rely on one certainty in property casualty jurisprudence – that is, bold policyholder assertions supported by even bolder “expert” opinions. In BF Advance, LLC v. Sentinel Insurance Company, No. 16-cv-5931 (E.D.N.Y. Mar. 20, 2018), decided in New York federal court this past March, the policyholder argued that a CGL policy’s Software Exclusion does not apply to injuries caused by software, and hired an insurance ... Keep Reading »
AIG Won’t Have to Defend Carfax in $50 Million Antitrust Suit
On March 1, a New York appeals court ruled that American International Group, Inc. (AIG) need not defend Carfax, Inc. against a $50 million suit alleging the company monopolized the vehicle history report market. The decision affirmed the lower court’s determination that the matter did not fall within the insuring agreement and that, even if it did, it would be precluded from coverage based on the application of the policy’s antitrust exclusion. In May 2017, AIG ... Keep Reading »
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