We previously discussed the Superior Court of Delaware's finding in Jarden, LLC v. Ace American Insurance Co. et. al that an appraisal proceeding was not covered under a directors and officers policy because it does not seek redress for a wrongful act." Now, the Delaware Supreme Court has adopted the lower court's opinion and order in full, agreeing with the insurers in finding that an appraisal action was not covered under the policy agreements. Case No. 273, 2021 (Del. ... Keep Reading »
Delaware Superior Court Applies “Meaningful Linkage” Test for D&O Related Acts Analysis
In Options Clearing Corp. v. U.S. Specialty Insurance Co., the Delaware Superior Court addressed the scope of related or interrelated wrongful acts policy language in connection with SEC investigations and enforcement actions involving the insured, Options Clearing Corp. (OCC). According to the opinion, OCC is a registered U.S. clearing agency and derivatives clearing organization, which provides clearing and settlement services to 18 exchanges. OCC is the sole ... Keep Reading »
Georgia Federal Court Extinguishes Fire Claim Because of Insured’s Failure to Update Insurer on Home Use
In Mehic v. Allstate Property and Casualty Insurance Co., the U.S. District Court for the Northern District of Georgia determined that an insured did not satisfy a condition precedent to coverage under a homeowners policy — keeping the insurer apprised of the property’s occupancy — thereby finding that the insurer had no duty to provide benefits. Mehic arose after the insured’s home, which she had not inhabited full time in nearly three years, was damaged in a fire. ... Keep Reading »
Fifth Circuit Determines a Deductible Buyback Policy Was a Named Perils Policy for Hurricane Harvey Flood Damage
The Fifth Circuit Court of Appeals recently reversed a federal Texas court’s order granting summary judgment in favor of the insured, holding that its “deductible buyback policy” was a “named perils” policy that did not provide coverage in relation to the insured’s flood-related damage sustained by a commercial building during Hurricane Harvey. The insured’s primary “all-risks” policy, which provided insurance for several of the insured’s properties, had a high ... Keep Reading »
Eleventh Circuit Finds Employer’s Liability Exclusion Ambiguous Under Alabama Law
The Eleventh Circuit Court of Appeals affirmed a decision that an insurer had a duty to defend its insureds under a commercial general liability policy in an action arising out of a catastrophic explosion at a pyrotechnics plant that killed two individuals and injured another, holding an "employer's liability exclusion" was ambiguous under Alabama law and thus must be construed in favor of coverage. The exclusion provided: "This insurance does not apply to any claim, ... Keep Reading »
“Belt and Suspenders” Don’t Need Zip: Federal New York Court Rejects Timeliness Obligation for Optional Disclaimer
In Adirondack Insurance Exchange v. Banagos, the Eastern District of New York held that an insurer is not required to send a disclaimer letter where a loss does not fall within the scope of the insuring agreement and voluntarily sending a disclaimer letter, including one that discusses exclusions, does not create the obligation to send it in a timely manner. At issue in the case was a homeowners insurance policy that Adirondack Insurance Exchange issued in favor of ... Keep Reading »
Fifth Circuit Affirms Finding of No Coverage for Phished Funds Never “Held” by Insured
As we previously reported, in February 2021, a Texas federal court ruled that RealPage Inc. was not entitled to insurance coverage for funds diverted in an email phishing scheme because RealPage did not "hold" the diverted funds. The Fifth Circuit Court of Appeals has now weighed in, agreeing that RealPage never "held" the diverted funds as required by the policy and affirming the district court's decision. In 2018, a RealPage employee clicked on a phishing email ... Keep Reading »
Proposed Amendments to New York’s Comprehensive Insurance Disclosure Act Would Ease Burden on New York Litigants
On December 31, 2021, New York Gov. Kathy Hochul signed into law the Comprehensive Insurance Disclosure Act, a sweeping reform to the disclosure obligations formerly required under CPLR 3101(f). As enacted, the Comprehensive Insurance Disclosure Act places restrictive new disclosure requirements on defendants and defense counsel litigating in New York. You can read our prior coverage of the act here. However, even as she was signing the bill into law, Gov. Hochul ... Keep Reading »
Ninth Circuit Affirms Coverage Denial Based on Insured’s Unreasonable Expectations
In a brief opinion filed on December 3, 2021, in Atain Specialty Insurance Co. v. Dignity Housing West Inc., the Ninth Circuit Court of Appeals held that terms of coverage are limited by information contained in policy declarations and do not extend to risks not disclosed in the application. Oakland Apartment Fire In the early morning of Monday, March 27, 2017, a fire swept through a large, three-story transitional housing development in Oakland, California. The ... Keep Reading »
Claim Managers Take Note: New York’s Comprehensive Insurance Disclosure Act Places New, Immediate, and Retroactive Disclosure Obligations Under CPLR 3101(f) on Defendants and Defense Counsel
On December 31, 2021, New York Gov. Kathy Hochul signed into law the Comprehensive Insurance Disclosure Act, significantly increasing the disclosure requirements for defendants litigating in New York state court. The Comprehensive Insurance Disclosure Act amends CPLR 3101(f), which previously allowed plaintiffs in litigation to seek disclosure from defendants as to the existence and contents of any insurance agreement that may be used to satisfy a judgment. Under the ... Keep Reading »
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