Potential Six-Year Delay in Notice of Flood and Mold Damage “Substantially Prejudiced” Insurer In Atain Specialty Insurance Company v. Carolina Professional Builders, LLC et al., 2:18-cv-2352-BHH (D.S.C. Oct. 2, 2020), a federal judge in South Carolina granted summary judgment to an insurer after finding that the record clearly supported that although flood and mold damages may have occurred during the policy period, that damage was distinct from the damage being ... Keep Reading »
Minnesota Supreme Court’s First Opinion on the State’s Bad Faith Statute
The Minnesota Supreme Court in the matter of Alison Joel Peterson v. Western National Mutual Insurance Company, 946 N.W.2d 903 (Minn. 2020) opined for the first time on the state’s bad faith statute (Minn. Stat. § 604.18) and weighed in on the interpretation of the two prongs contained within the statute. The statute provides the following two prongs that must be determined for a court to award bad faith damages to an insured against the insurer: the absence of a ... Keep Reading »
The No Corners Rule? New York Federal Court Holds No Duty to Defend Where There Is No Possible Legal or Factual Basis for Indemnification of Insured
Under New York law, an insurer's duty to defend ends if it establishes as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured. This rule was recently applied by the Southern District of New York in Philadelphia Indemnity Insurance Co. v. Streb, Inc., No. 19 CIV. 366 (KPF), 2020 WL 5549316 (S.D.N.Y. Sept. 16, 2020). In Streb, the Philadelphia Indemnity Insurance Company ("PIIC") issued a ... Keep Reading »
An Equitable Exception To the Four Corners Rule: The Eleventh Circuit Looks Beyond Operative Complaint To Find No Duty To Defend
Under Florida law, similar to that of other states, an insurer’s duty to defend is generally determined solely by the allegations found within the four corners of the complaint. Florida courts, however, recognize an exception to that general rule and will allow for the consideration of extrinsic undisputed facts, which, if pled, would place the claim outside the scope of coverage. The Eleventh Circuit recently applied this exception in BBG Design Build, LLC v. Southern ... Keep Reading »
Fifth Circuit Holds That Ensuing Loss Provision of Builders’ Risk Policy Requires Two Separate Events to Qualify for the Construction Exclusion Carve-Out
In Balfour Beatty Construction, LLC v. Liberty Mutual Fire Insurance Company, No. 19-20216 (August 3, 2020), the Fifth Circuit determined that Liberty Mutual’s policy does not cover a construction company’s claim for window damage to a skyscraper caused by a subcontractor’s welding because the policyholder failed to show the damage resulted from a covered peril. The case turned on the court’s interpretation of the policy’s construction exclusion, which included an ... Keep Reading »
Washington Federal Court Finds Attorney-Client Privilege Waived by Claims Handler’s Inadvertent Disclosure of In-House Counsel’s Coverage Opinion to Defense Counsel
A federal district court in Washington recently held that a claims handling mishap resulted in a waiver of the attorney-client privilege otherwise protecting a coverage opinion provided by the insurer’s internal legal department. The Underlying Action & Internal Claims Handling Phoenix issued a liability policy to Diamond Plastics Corporation (Diamond), which supplied sewer and water pipes to H.D. Fowler (Fowler). The pipes were installed during a utility ... Keep Reading »
Eleventh Circuit Finds No “Direct Physical Loss” to Dust-Covered Restaurant that Merely Required Cleaning
As the COVID-19 pandemic continues, so does the deluge of litigation stemming from property insurers' denials of COVID-19 business interruption claims. Much of the debate between carriers and policyholders concerns whether the coronavirus or the COVID-19 shutdown orders caused "direct physical loss of or damage to" the insured's property. The Eleventh Circuit's recent opinion in Mama Jo's Inc. v. Sparta Insurance Co., while not related to COVID-19, arguably supports the ... Keep Reading »
Fifth Circuit Ices Insured’s Bid to Recover Insurance Proceeds for Assigned Boiler Claim
The Fifth Circuit Court of Appeals recently ruled that an insured could not bring a claim to recover proceeds against its insurer after the insured transferred its rights to recover the proceeds to a third party. The case, CRU Shreveport LLC v. United National Insurance Co., stems from a coverage dispute between CRU Shreveport and United National Insurance regarding a boiler accident in a hotel owned by CRU and insured by United. The incident occurred in 2016 when a ... Keep Reading »
Coverage Claim Bites the Dust: Seventh Circuit Finds No Coverage for $50 Million Judgment Resulting From Dust Pollution Due to Known Claim and Expected or Intended Injury Exclusions
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 »
Eleventh Circuit Explicitly Adopts Distinction Following Hoover to Confirm That Coverage Cannot Be Created Through Waiver or Estoppel
On July 30, 2020, the Eleventh Circuit Court of Appeals in AEGIS Electric & Gas International Services Ltd. v. ECI Management LLC reversed the trial court's grant of summary judgment in favor of an insurer, AEGIS Electric & Gas International Services Ltd. In that case, AEGIS issued a real estate services professional liability policy to ECI Management LLC. Subsequently, ECI was named as a defendant in a putative class action in which the plaintiff alleged that ... Keep Reading »
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