As we previously discussed in this blog, in June 2021 the Delaware Superior Court found in First Solar Inc. that there was no coverage under a claims-made policy for a securities action (Maverick) filed during the relevant policy period, on the grounds that the Maverick action constituted a "related claim" with respect to a class action that had been filed before the policy period commenced (Smilovits). In so holding, the court applied a "fundamentally identical" ... Keep Reading »
Eleventh Circuit Holds Tort Claimants Lack Standing to Challenge Judgment That Insurer Has No Duty to Defend
On March 29, 2022, the Eleventh Circuit Court of Appeals held that a tort claimant lacks standing to challenge a court's judgment finding that the carrier had no duty to defend the insured. A.B. was 10 years old when she was sexually abused by her parent and her parent's spouse. The spouse was ultimately indicted, pleaded guilty to two counts of human trafficking, and was sentenced to 30 years in prison per count. In her suit against the convicted human trafficker ... Keep Reading »
Fifth Circuit Concludes That Compliance With Pandemic-Related Shutdown Orders Does Not Constitute “Direct Physical Loss of or Damage to Property” Under Louisiana Law
In the recent decision in Q Clothier New Orleans LLC v. Twin City Fire Insurance Co., the Fifth Circuit Court of Appeals affirmed the dismissal of an insured’s claim for coverage under a property policy for loss arising from compliance with pandemic-related shutdown orders. In concluding that such losses did not fall within the meaning of “direct physical loss of or damage to property” in the policy’s insuring agreement under Louisiana law, the court noted that its ... Keep Reading »
Illinois Appellate Court Finds No CGL Coverage for Defective Elevator Suit
In the recent decision of Korte & Luitjohan Contractors Inc. v. Erie Insurance Exchange, the Fifth District Appellate Court of Illinois reaffirmed that, under Illinois law: (1) construction defects generally do not trigger coverage under commercial general liability insurance policies; (2) such policies generally do not cover the cost to repair construction defects or economic losses resulting from construction defects; and (3) parol evidence is irrelevant to the ... Keep Reading »
Delaware Supreme Court Affirms Appraisal Proceeding Is Not Covered Under D&O Policy
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 »
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