In a non-precedential decision, the Third Circuit Court of Appeals upheld a district court’s grant of summary judgment to an errors and omissions insurer that declined to indemnify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 »
Exclusions/Exceptions
Illinois Supreme Court Finds That Alleged Sharing of Fingerprint Data Violates the Right of Privacy, a “Personal Injury” Triggering Duty to Defend
The Illinois Supreme Court recently affirmed that West Bend Mutual Insurance Co. has a duty to defend an insured under a business insurance policy against allegations that they violated the Illinois Biometric Information Privacy Act (BIPA), finding that an exclusion that bars coverage for certain statutory actions did not apply. The court ruled that a tanning salon’s sharing of its clients’ biometric identifiers and biometric information (fingerprints) with a third-party ... Keep Reading »
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 »
Gluing Feathers to a Phone Does Not Make a Turkey: Seventh Circuit Finds Mere “Negligence” Label and “Stitched Together” Factual Allegations Do Not Trigger Duty to Defend Aggressive Robocall Lawsuit Under Illinois Law
In 2015, Ocwen Financial Corp. was sued for its attempts to collect on a mortgage loan that had been discharged in bankruptcy. It tendered the defense to Zurich American Insurance Co., but Zurich asserted that two exclusions precluded coverage and sought a declaration from a federal court that it had no duty to defend the underlying complaint. The district court agreed, and the Seventh Circuit affirmed on appeal. The underlying complaint alleged that Ocwen violated ... Keep Reading »
Delaware Supreme Court Affirms Insurability of Fraud and Larger Settlement Allocation Rule
On March 3, 2021, the Supreme Court of Delaware issued a significant decision in the D&O coverage space, RSUI Indemnity Co. v. Murdock, analyzing whether fraud claims against insureds were covered under an excess D&O policy issued by RSUI Indemnity Co. to Dole Food Company Inc. The coverage dispute centered on stockholder litigation arising after David Murdock, the CEO and a director of Dole, took Dole private through a merger transaction resulting in Murdock ... 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 »
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 »
Florida Appellate Court Determines Faulty Workmanship Exclusion in Homeowner’s Policy Is Not Ambiguous and Thus Damage Caused by Contractor’s Conduct Is Not a Covered Loss
In Saunders v. Florida Peninsula Insurance Co., a Florida appellate court recently determined whether a faulty workmanship exclusion in a homeowner’s policy applied to a property loss caused by a contractor. The insured, Veronica Saunders, hired a contractor to install a new addition to her home, which was insured by Florida Peninsula Insurance Co. During the construction process, the contractor took off a portion of the roof and only covered the exposed area with ... Keep Reading »
New York Supreme Court Allows Paint Company to Pursue Coverage for $102M Lead Paint Settlement
In Certain Underwriters at Lloyd’s, London v. NL Industries Inc., a New York Supreme Court recently ruled that paint maker NL Industries Inc. may seek insurance coverage for its almost $102 million share of a settlement, stemming from a suit over the negative impact of the use of its lead-based paint in California homes and buildings. A Case 20 Years in the Making The underlying suit was first filed in 2000 by certain California counties that sought to hold a number of ... Keep Reading »
Ninth Circuit Applies Willful Violation of Law Exclusion in Professional Liability Policy To Preclude Coverage for Wrongful Death Lawsuit Stemming From Doctor’s Unlawful Distribution of Fentanyl
In National Fire & Marine Insurance Company v. Hampton, No. 19-17235 (9th Cir. Oct. 21, 2020), the Ninth Circuit held that a doctor’s guilty plea to the unlawful distribution of a controlled substance barred insurance coverage under his professional liability policy for a subsequent wrongful death lawsuit resulting from a patient’s overdose. According to the Ninth Circuit, the doctor’s admission that he intentionally distributed fentanyl clearly implicated the ... Keep Reading »
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