Insured’s Knowledge of Potential Harm Enough to Defeat Coverage The Seventh Circuit Court of Appeals, in an opinion written by the Honorable Judge Scudder, applying Indiana law, affirmed the decision of the lower court finding that Westfield Insurance Company (“Westfield”) did not have an obligation to defend or indemnify its insured under a general commercial liability insurance policy because... Read More

“Gross Negligence” Can be an “Accident” Triggering Coverage The Iowa Supreme Court, applying Iowa law, reversed a trial court decision holding an insurer had no duty to defend or indemnify for allegations of gross negligence. The trial court opinion held that “gross negligence” fell outside of the scope of coverage of the applicable CGL policy because it could not... Read More

Negligence Claim Arising out of Shooting Barred by Assault and Battery / Firearm Exclusions The Illinois Appellate Court for the First District, in an opinion written by Justice Mikva with Justices Cunningham and Harris concurring, applying Illinois law, reversed the trial court and held that Markel International Insurance Co. (“Markel”) did not have a duty to defend Carolyn’s Lounge... Read More

On-Going Litigation Damages not a Separate Claim Within a Claim The Seventh Circuit Court of Appeals, in an opinion written by the Honorable Judge Kanne, applying Illinois law, affirmed the decision of the trial court finding that Federal Insurance Company (“Chubb”) had no duty to defend or indemnify Peoples National Bank (“Peoples”) under a claims-made professional liability policy because the... Read More

Vertical Exhaustion Applies at Primary Level for Asbestos Claims The California Court of Appeals for the First District, applying California law, reversed the decision of the trial court and remanded for further proceedings after finding that the policyholder, SantaFe Braun, Inc. (“Braun”), only needed to prove exhaustion of the primary policy in order to access the excess coverage in... Read More

Insurer Waives Privilege by Filing Affidavit Relying on Privileged Information The Illinois Appellate Court for the First District, in an opinion written by Justice Ellis with Justices McBride and Howse concurring, applying Illinois law, held that attorney-client privilege does not permit a party to avoid the attached-documents requirement of Rule 191(a).  The Appellate Court found that State Farm Mutual... Read More

John Crane Cannot Prove Exhaustion With Flawed Expert Testimony The Illinois First District Court of Appeals, in an opinion written by Justice Harris, affirmed several trial court rulings against John Crane, Inc. (“JCI”). JCI appealed various pre-trial judgements and orders of the Cook County Circuit Court.  (See previous Insurance Bytes).  On appeal, JCI argued: (1) the trial court erred in... Read More

Yacht Owner Failed to Show Sinking Due to Accident and Not General Disrepair The United States Court of Appeals for the Third Circuit, applying federal maritime law, affirmed the decision of the United States District Court for the District of New Jersey and held that the insured did not satisfy its burden of proving a fortuitous loss to establish coverage. The... Read More

Coverage Action Stay Reversed Because Duty to Defend a Legal Determination The Illinois Appellate Court for the Fourth District, in an opinion written by Justice Cavanagh, applying Illinois law, found that the lower court abused its discretion in granting a motion for a stay in coverage determination. According to the Appellate Court, determining whether the insurer has a duty to... Read More

D & O Insurer Denial Not Vexatious The Illinois Appellate Court for the First District, in an opinion written by Justice Reyes with Justices Gordon and Lampkin concurring, applying Illinois law, affirmed the Circuit Court’s decision that Liberty International Underwriters (“Liberty”) was not unreasonable or vexatious when it denied coverage under a directors and officers (“D&O”) policy because the... Read More