Sexual abuse does not constitute professional services. The Bankruptcy Court for Minnesota, applying Minnesota law, held coverage for sexual abuse claims against a priest are not barred by a professional services exclusion in a Comprehensive General Liability Policy, because the abuse claims do not arise out of the priest’s professional service. The Diocese of Duluth (the “Diocese”) filed a petition under... Read More

Exclusion bars coverage for both permanent and sudden and accidental occurrences including carbon monoxide leaks. In a 5-4 opinion, the Supreme Court of Oklahoma held that Oklahoma public policy does not prohibit the enforcement of an Indoor Air Exclusion.  Public policy was raised as a concern because, under the district court’s interpretation, the Indoor Air Exclusion at issue barred coverage... Read More

The Seventh Circuit, applying Indiana law, held that Travelers Property Casualty Company of America (“Travelers”) is liable to the extent the Indianapolis Airport Authority (“Airport Authority”) can prove that it incurred expenses to reduce costs for which Travelers otherwise would have been liable due to a construction incident which delayed the project .  The mitigation expenses are recoverable under... Read More

Verdict in excess of limits exposes insurer to discovery of past bad faith claims and excess verdicts, as well as outside counsel fees and in-house incentives. An Illinois district court, applying federal civil procedure and Illinois law, ordered insurers, American Physicians Assurance Corporation (“APAC”) and American Physicians Capital (“APC”), to comply with certain discovery requests relevant to the insured’s, The... Read More

Deems policy language ambiguous and, without applying contra proferentem, remands for consideration of custom and practice. The Second Circuit, applying New York law, in a ruling by summary order, vacated the ruling of the district court and held that the maritime policy at issue was ambiguous with regard to its duty to pay investigation and defense costs incurred after... Read More

No advertising injury and barred by intellectual property exclusion. An Illinois federal court, applying Illinois law, held that Sentinel Insurance Co. Ltd. (“Sentinel”) has no duty to defend or indemnify Yorktown Industries, Inc. (“Yorktown”) in a lawsuit alleging misappropriation of customer lists and sales information, because the allegations do not constitute “personal and advertising injury” and, regardless, the claim is... Read More

Adopts majority rule finding anti-assignment clause in policy not a basis to deny coverage.    The New Jersey Supreme Court, applying New Jersey law, upheld the appellate court and adopted the majority rule that an insured can validly assign its rights under insurance policies without the insurer’s consent once a loss has already occurred.  Thus, the anti-assignment clause in an... Read More

A Washington federal district court, applying Washington law, held that The Travelers Indemnity Company and Travelers Casualty & Surety Company, f/k/a The Aetna Casualty and Surety Company (collectively, “Travelers”) and other insurers breached their duty to defend King County for enforcement actions arising out of the environmental pollution of two Washington Superfund sites.  The court held that being named... Read More

Recent actuarial assumptions indicate that asbestos reserves generally should be reevaluated given the unexpected resilience of claim filings. For decades, the conventional wisdom has been that mesothelioma diagnoses would begin to decline because of laws severely limiting the use of asbestos in the mid-1980’s and the aging of the pool of potentially exposed individuals.  Recent projections suggest that the conventional... Read More