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 »
Target Data Breach Not Covered Under CGL Policy: Court Rejects “But-For” Theory for Loss of Use Damages Where There Was No Evidence of Value of the Use of Payment Cards
Following a 2013 data breach in which the credit and debit card information of more than 110 million customers was stolen or exposed, Target Corp. sought coverage from its CGL insurers for $74 million that it incurred in settlements with various banks (the credit and debit card issuers) for their costs in issuing new payment cards (both credit and debit cards) to the customers. In a recent decision on the parties’ cross-motions for summary judgment, the U.S. District ... Keep Reading »
New York First Department Clarifies Effect of New York Insurance Law Section 3420 on Claims-Made-and-Reported Policies
In Certain Underwriters at Lloyd's London v. Advance Transit Co., a New York appellate court provided valuable clarity into how New York Insurance Law section 3420 applies to claims-made-and-reported insurance policies. Underwriters issued a claims-made-and-reported liability policy to Advance Transit Co., effective October 30, 2016, to October 30, 2017. The policy provided that if it were renewed, Advance would have an additional 60 days after the expiration of the ... Keep Reading »
Florida Supreme Court Defines Damages Recoverable by First-Party Insureds in Actions Alleging Breach of Policy
In Citizens Property Insurance Corp. v. Manor House, LLC, the Florida Supreme Court recently answered “no” to the following question certified as a matter of “great public importance”: In a first-party breach of insurance contract action brought by an insured against its insurer, not involving suit under section 624.155, Florida Statutes, does Florida law allow the insured to recover extra-contractual, consequential damages? The case involved a dispute over property ... 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 »
Outlier Decision of New York Appellate Court Denies Insurer’s Right to Recoup Defense Costs Even Though Court Found No Duty to Indemnify
Recoupment of defense costs (defense fees and costs) by insurers in the absence of a duty to indemnify under a liability policy is an unsettled issue in many states. In a recent decision, a New York intermediate appellate court held that even though there was no duty to indemnify an underlying personal injury action under a CGL policy, the insurer could not recoup the defense costs it had advanced under a reservation of rights (ROR) letter where the policy at issue ... Keep Reading »
Florida Judges Find COVID-19 Does Not Cause Direct Physical Loss or Damage
The tidal wave of favorable rulings for insurers in COVID-19 business interruption insurance coverage lawsuits that started in 2020 is continuing in 2021. As this blog has previously explained, commercial property insurance policies generally require “direct physical loss of or damage to” the insured property to trigger business interruption coverage. In some COVID-19 business interruption insurance lawsuits, policyholders have alleged that the presence of COVID-19 on ... 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 »
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