The Seventh Circuit, applying Indiana law, held that First Mercury Insurance Co. (“First Mercury”) had no duty to defend home security system dealer, Defender Security Co. (“Defender”), in an underlying class action alleging that it illegally recorded customer calls, because the underlying suit did not allege any “oral or written publication of material that violates a person’s ‘right of... Read More

An Illinois appellate court, applying Texas law, held that mold-related injuries allegedly caused by the faulty construction of a building were not barred by a pollution exclusion because the exclusion did not clearly and unambiguously apply to mold. In 2001, a group of Texas government employees alleged that they sustained bodily injuries due to exposure to mold resulting from D.... Read More

An Illinois circuit court, applying Illinois law, ruled that Continental Casualty Co. (“CNA”) only had to satisfy the single occurrence limit in multi-year umbrella policies that it issued to Borg-Warner Corp. (“BWC”), rejecting the argument that the policies had annualized limits equaling an additional $70 million in total occurrence limits according to the opinion. In 2004, CNA filed suit seeking... Read More

A Pennsylvania Federal District Court applying Pennsylvania law found Travelers Casualty Co. was liable for $15.3 million in pre-judgment interest for its failure to indemnify its policyholder for settlements associated with 31,000 asbestos claims. The interest was in addition to $21 million in actual damages that were previously agreed upon by the parties in a joint stipulation. Travelers originally denied... Read More

Pipeline Rupture: Faulty Workmanship and Latent Defect Exclusions Inapplicable; Question of Fact Whether Loss Caused by Rupture or Corrective Action An Arkansas Federal District Court, applying Arkansas law, denied summary judgment to insurers in a coverage dispute over a business interruption claim by an oil refinery, finding a question of fact as to whether the rupture of a pipeline or... Read More

The U.S. Court of Appeals  for the Fifth Circuit, applying Texas law, found that a policyholder-owner of four rental buildings breached the prompt-notice provision of his commercial property policies by waiting unreasonably long to present a hail damage claim, prejudicing its property insurer because the damage increased as time passed, relieving the insurer of any obligation under the policy. The... Read More

The 9th Circuit, applying California law, reversed a district court’s grant of summary judgment to the insurer on the basis of a “known damages” provision, finding that an insurer had the duty to defend where the extent of an insured’s prior knowledge of problems that caused corrosion to the underlying steel structure and pipelines of a natural gas production... Read More

A Michigan federal district court, applying Michigan law, granted summary judgment to two insurers, finding no coverage in a $2.6 million theft claim because the employee had stolen the funds from clients, and not directly from the policyholder, while knowing he was committing a wrongful act. For approximately 8 years, an employee of the policyholder, Hantz Financial Services, Inc. (“Hantz”),... Read More