Pre-1972 Excess “Occurrence” Policies Pro Rata, Excess Post-1972 Claims-Made Coverage not triggered.    The Delaware Supreme Court, applying Michigan law, held that costs associated with General Motors Company’s (“GM”) asbestos claims were subject to pro rata allocation under GM’s pre-1972 excess level occurrence-based policies.  The court also held there was no coverage under GM’s post-1972 excess level policies.  Those policies... Read More

Omission That Resulted in Reduced Premium Didn’t Automatically Establish That Misrepresentation Was Material. The Illinois Appellate Court for the First District, applying Illinois law, affirmed the judgment of the circuit court and held that an increase premium, standing alone, without any actual evidence of an increased risk to the insured, is insufficient to justify rescission of an automobile insurance policy. Andrew... Read More

“Expected injury” Exception Does Not Categorically Bar Negligence Claim Based on Failure to Supervise. The Illinois Appellate Court for the Second District, applying Illinois law, reversed the decision of the circuit court and held that an insurer was not entitled to judgment on the pleadings because the underlying complaint lacked specific factual allegations that would trigger the “expected injury” exclusion... Read More

Common Interest Doctrine Applicable as Exception to Attorney-Client Privilege in Case Between Insured and its Broker. On interlocutory appeal, the Illinois Appellate Court for the Second District, applying Illinois law, held that the “common-interest” doctrine applies as an exception to the attorney-client privilege when an insured sued its insurance broker for malpractice based on the denial of a claim.  Thus,... Read More

Malpractice action against firm hired to provide policyholder’s defense permitted In a 3-2 opinion, the South Carolina Supreme Court held that Sentry Select Insurance Co. (“Sentry”) could maintain a direct malpractice action against a law firm it had retained to defend its policyholder in an auto accident case.  The court’s opinion was in response to certified questions posed by a... Read More

Insurer denied summary judgment due to unresolved factual questions   A federal court for the Northern District of Illinois, applying Illinois law, denied an insurer’s motion for summary judgment on an insured’s claim for bad faith failure to settle.  The court found that genuine issues of material fact existed regarding the insurer’s true assessment of the underlying claim. The Surgery Center... Read More

From employer’s point of view, employee’s crime unintentional The California Supreme Court ordered Liberty Surplus Insurance Corp. (“Liberty” is a Liberty Mutual affiliated company) to provide a defense to Ledesma & Meyer Construction Co. (“L & M”) for a complaint that alleged it had negligently hired and failed to supervise an employee that sexually assaulted a student at a middle... Read More

Insurer not equitably estopped from denying indemnity coverage despite defending without ROR A federal court for the Northern District of Illinois, applying Illinois law, held that an insurer was not estopped from denying indemnity coverage where the claim arose outside of the policy period because the insured could not demonstrate any “clear, concise, and unequivocal evidence” of control of the... Read More

Policy above SIR is primary insurance and horizontal exhaustion not required before policy is triggered An Illinois appellate court for the First District, applying Illinois law, affirmed the circuit court’s ruling and held that an insured’s policy above a self-insured retention (“SIR”) constituted primary insurance.  The appellate court made this determination based on the following facts: (1) the policies imposed... Read More

Policyholder not responsible in long-tail matters for periods when insurance was unavailable The New Jersey Supreme Court, applying New Jersey law, upheld the “unavailability rule” under Owens-Illinois and held that the allocation of Honeywell’s costs relating to asbestos bodily injury claims must be limited to the period from the date of first exposure to 1987, the year in which Honeywell... Read More