In Greene v. Westfield Insurance Co., the Seventh Circuit Court of Appeals recently affirmed summary judgment finding that commercial general liability policies issued by Westfield Insurance Co. did not cover a $50.56 million default judgment entered against its insured, VIM Recycling, based on the policies’ “known claims” and “expected or intended injury” exclusions. Dust Pollution Leads to $50.56 Million Default Judgment VIM Recycling operated a wood recycling ... Keep Reading »
Exclusions/Exceptions
Iowa Supreme Court Finds Fatality Allegedly Caused by Gross Negligence Was a Potential “Accident” Under CGL Policy
Coverage under most commercial general liability (CGL) policies applies only to liability arising from an “accident.” As such, injury or damage that an insured “expected or intended” to occur is not covered. But whether an insured subjectively intended to cause injury may be difficult to determine, even when the conduct itself was clearly intentional. In a recent decision by the Supreme Court of Iowa, the court examined a related, if not potentially more difficult, ... Keep Reading »
A Case of Mass Listeria: Insurer’s Duty to Defend in New Jersey Contaminated Pizza Crusts Suit
Last week, in Conte’s Pasta Co. v. Republic Franklin Insurance Co., a New Jersey federal court ruled that Republic Franklin Insurance Co. was obligated to indemnify Conte’s Pasta for the costs incurred defending against a suit brought by one of its customers, Nature’s One, for damages related to listeria contamination in its gluten-free pizza crusts. Underlying Litigation In early 2017, Nature’s One contracted with Conte’s Pasta to manufacture gluten-free pizza ... Keep Reading »
Years of Embezzlement Precluded From Coverage Under E&O Policy’s Commingling Exclusion
A federal district court in North Dakota recently granted an insurer’s motion to dismiss in Campbell Property Management LLC v. Lloyd’s Syndicate 3624, finding that both prongs of a “commingling exclusion” to coverage applied. The court granted the insurer’s motion to dismiss the breach of contract and bad faith claims asserted by Campbell Property Management, finding that there was no coverage for the subject acts, and thus there could be no bad faith. Lloyd’s issued ... 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 »
Eighth Circuit Enforces Contract Liability Exclusions to Bar Contract Claims, Regardless of Non-Contractual Cause of Action in Complaint
The Eighth Circuit Court of Appeals recently decided a case, Russell v. Liberty Insurance Underwriters Inc., involving a dispute between the co-owners of a business and the widow of their deceased former partner. The widow sued the business’s surviving co-owners for breach of fiduciary duty for failing to apply a life insurance payout to the company to buy out her deceased husband’s shares pursuant to an agreement between the business owners. The co-owners submitted the ... Keep Reading »
Are COVID-19 Business Interruption Claims Appropriate for a Coverage Class Action?
Over the last few weeks, a tsunami of lawsuits has been filed in many states alleging a variety of issues related to the global COVID-19 pandemic. The lawsuits have targeted a variety of industries, such as banking and financial services, travel and hospitality, and retail. The property and casualty insurance industry has also been in the news as likely hundreds of thousands of policyholders have faced shutdowns of their businesses. These policyholders have looked to ... Keep Reading »
New Jersey Proposes Bill That May Require Insurers to Cover COVID-19 Business Interruption Losses
As the United States faces a surge in confirmed cases of COVID-19, New Jersey is proposing a bill that would require property insurers that cover risks in New Jersey to pay for business interruption losses due to the disease, despite their policies expressly excluding coverage for losses due to viruses or bacteria. The law, which would take effect immediately and be retroactive to March 9, 2020, is aimed at reducing the financial impact of the coronavirus on New Jersey’s ... Keep Reading »
Insured’s Leaky “Abrupt” Interpretation of All-Risk Insurance Collapses Under Eleventh Circuit Scrutiny
In S.O. Beach Corp. v. Great American Insurance Company of New York, No. 18-1967 (11th Cir. Oct. 31, 2019), the Eleventh Circuit affirmed the district court’s grant of summary judgment in full to the insurer, finding there was no ambiguity in the all-risk policy’s definition of a “collapse” as “an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its intended purpose” ... Keep Reading »
Look No Further Than the Insuring Clause: Ill-Gotten Gains Do Not Constitute Covered “Loss”
On August 26, 2019, the Eleventh Circuit Court of Appeals, applying Florida Law, held that ill-gotten gains do not constitute covered “loss” within the meaning of a D&O policy. In Philadelphia Indemnity Insurance Co. v. Sabal Insurance Group, Inc., No. 17-14844 (11th Cir. Aug. 29, 2019), the Miami-Dade County Office of the Inspector General investigated Sabal Insurance Group and its CEO/president Ian Norris for overcharging the Miami-Dade Aviation Department for ... Keep Reading »
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