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 »
Exclusions/Exceptions
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 »
Seventh Circuit Finds “Based Upon or Arising Out of” Language in Contract Exclusion Renders Coverage “Illusory”
In Crum & Forster Specialty Insurance Co. v. DVO, Inc., No. 18-2571 (7th Cir. Sept. 23, 2019), the Seventh Circuit reversed a decision of the U.S. District Court for the Eastern District of Wisconsin, finding that the contractual liability exclusion in an E&O policy containing “based upon or arising out of” language rendered coverage under the policy “illusory” and therefore must be reformed to match the policyholder’s “reasonable expectations.” The appeal ... Keep Reading »
Seventh Circuit Reverses Prior Ruling After Reexamining Exclusion Clause
After a panel rehearing, the Seventh Circuit in Emmis Communications Corp. v. Illinois National Insurance Co., No. 18-3392 (7th Cir. Aug. 21, 2019), vacated a prior judgment and withdrew an opinion issued in July 2019, finding upon second review that Emmis Communications was entitled to summary judgment in its favor with regard to a breach of contract claim against Illinois National Insurance Co. The litigation involved Illinois National's denial of insurance coverage to ... Keep Reading »
Second Circuit Confirms: Rolling Trash Cans Are Not “Vehicles” as Common Sense Prevails Again
In July 2018, we wrote about an interesting decision out of the Southern District of New York in which a court rejected a claim that an exclusion did not apply because a recycling bin on wheels was a "vehicle" under the applicable "all risks" insurance policy. We described the district court's decision that the glorified trash can was not a "vehicle" as a victory for common sense over a claim based on a hypertechnical definition. The Second Circuit has now affirmed ... Keep Reading »
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