On June 28, 2023, the Eleventh Circuit Court of Appeals issued an opinion in Southern-Owners Insurance Co. v. Waterhouse Corp. affirming that fungi or bacteria exclusions did not apply because a cooling tower that allegedly contained Legionella bacteria was neither a “building” nor a “structure” within the meaning of the exclusions. In Waterhouse, a horticultural manufacturer hired Waterhouse Corp. to perform monitoring, maintenance, and water treatment services for ... Keep Reading »
Seventh Circuit Declines to Enforce Plain Language of Distribution of Material Exclusion in Business Liability Policy
On June 15, 2023, in Citizens Insurance Company of America v. Wynndalco Enterprises LLC, the Seventh Circuit Court of Appeals affirmed the U.S. District Court for the Northern District of Illinois’ decision holding that a Citizens’ business liability insurance policy exclusion for the distribution of material in violation of statutes gave rise to an ambiguity. The ruling stems from two putative consumer class actions filed against Wynndalco Enterprises LLC, an ... Keep Reading »
Sixth Circuit Finds Lanham Act False Advertising Claim Not a Personal and Advertising Injury Under General Liability Policy
On June 1, 2023, the Sixth Circuit Court of Appeals found that a Lanham Act false advertising lawsuit was not covered under the “personal and advertising injury” coverage section of a commercial general liability (CGL) policy under Michigan law. The plaintiff in L&K Coffee LLC v. LM Insurance Corp. is a Michigan-based company that roasts and sells coffee products throughout the United States. In early 2019, coffee growers from the Kona region of Hawaii sued ... Keep Reading »
Florida Enacts Bill Imposing Regulatory Oversight Relating to Insurer Accountability
On May 31, Gov. DeSantis signed a new law that enacts several wide-ranging regulatory requirements on insurers transacting business in Florida. The regulatory changes instituted by the new Insurer Accountability Act, which takes effect July 1, include amendments to Florida’s deceptive and unfair trade practices statute, increased fines, the imposition of potential criminal penalties, new requirements for residential property insurers, and the authorization of new ... Keep Reading »
7th Cir. Holds Insurance Coverage Applies to Settlement Payments for Alleged Anti-Kickback and False Claims Act Violations
On May 3, 2023, the Seventh Circuit Court of Appeals, in Astellas US Holding Inc. v. Federal Insurance Co., held that a liability insurer was required to contribute its limits toward its insured’s payment to settle potential anti-kickback claims because the insurer did not show that such amounts were uninsurable restitution. Astellas, a Japanese drugmaker, launched a drug to treat metastatic prostate cancer in 2012. Astellas priced the treatment at $7,800 per month, ... Keep Reading »
Fifth Circuit Holds No Liability Coverage for Negligence Claim Premised on Allegations of Intentional Conduct
In Gold Coast Commodities, Inc. v. Crum & Forster Specialty Insurance Co., issued May 22, 2023, the U.S. Court of Appeals for the Fifth Circuit held that a pollution liability policy did not provide coverage for a negligence claim premised on allegations of intentional conduct. In Gold Coast, the insured, Gold Coast Commodities sought defense and indemnity coverage for an underlying lawsuit filed against it by the city of Brandon, Mississippi. In that lawsuit, the ... Keep Reading »
Second Circuit Affirms Ruling That Prior Knowledge Exclusion Barred Coverage for Legal Malpractice Lawsuit
The Second Circuit Court of Appeals recently affirmed a lower court’s ruling, which declared that North River Insurance Co. had no duty to defend or indemnify its insured in connection with a legal malpractice lawsuit. Background In September 2019, Max Leifer and his law office applied for professional liability insurance with North River. Leifer’s application was approved, and North River issued the policy, which covered damages and defense expenses for claims ... Keep Reading »
11th Cir. Affirms That Georgia’s Implied Waiver Doctrine Cannot Be Used to Create Coverage
In Century Communities of Georgia LLC v. Selective Way Insurance Co., the Eleventh Circuit Court of Appeals affirmed that the Georgia Supreme Court’s 2012 opinion in Hoover v. Maxum Indemnity Co. does not apply to “coverage defenses” — that is, whether a loss is potentially covered under a policy in the first place. Rather, under Hoover, only certain “policy defenses,” meaning whether a procedural condition of the insurance contract has been fulfilled, may be subject to ... Keep Reading »
No Coverage for Delinquent Payments: Mobile Home Park Operator Cannot Recover for “Expected or Intended” Injuries
On May 1, 2023, in West American Insurance Co. v. Del Ray Properties Inc., the U.S. District Court for the Western District of Washington held that general liability insurers owed no coverage obligations to a mobile home park operator in connection with delinquent payments of utility bills that jeopardized its residents’ water and garbage services because the underlying claims were for “expected or intended” injuries. Del Ray Properties Inc. is a Washington ... Keep Reading »
Third Circuit Limits Pennsylvania’s “Reasonable Expectations” Doctrine
In Hemphill v. Landmark American Insurance Co., issued April 5, 2023, the Third Circuit Court of Appeals outlined limits on an insured’s use of Pennsylvania’s “reasonable expectations” doctrine — the legal theory that purports to provide coverage under a policy based on the “reasonable expectations” of the insured — and found that, among other things, the doctrine does not apply to commercial insureds. The case involved a coverage dispute for an underlying claim by an ... Keep Reading »
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