Seventh Cir. Strikes Insurer’s Coverage Defenses for Failure to Defend The Seventh Circuit, applying Illinois law, held that an insurer who repeatedly refused to defend its policyholder breached its duty to defend and, therefore, was estopped from asserting coverage defenses. In August 2010, Gustavo and Maria Bernal were injured in a car accident caused by a semi-tractor trailer owned by Michael... Read More
CA Supreme Court Overrules Henkel and New Jersey Appellate Court in Accord – No Insurer Consent Required for Valid Assignment of Insurance Rights After A Loss The California Supreme Court, overruled its landmark ruling in Henkel v. Hartford, and held that a company can assign its rights under insurance policies to successors without an insurer’s consent after a loss has... Read More
6th Cir. Finds No “Occurrence” Triggering Duty to Defend When No Damage to Third-Party Property The Sixth Circuit, applying Michigan law, held that there was no “occurrence” under a policy where the complaint solely alleged faulty workmanship and failed to plead property damage to a third-party’s property. Steel Supply & Engineering Co. (“Steel Supply”) contracted to fabricate and erect steel for... Read More
Federal Court Holds Indemnity Coverage Available for Remediation Costs A Louisiana district court, applying New York law, held that an insurer must indemnify a power plant operator for millions in costs it incurred to remediate pollution pursuant to a consent decree relating to a Clean Air Act (CAA) suit, holding that all the expenditures fall within the scope of the... Read More
Hoke LLC secured a landmark cost-in-addition to limits duty to defend ruling against an excess insurer – the first such reported decision in Illinois. Hoke LLC noted some manuscript language in an obscure Condition J. clause that was used to leverage this first-of-its-kind ruling. This effectively doubled the recoverable limits for the client to as much as $150 million... Read More
Steve Hoke secured a finding that various Lloyd’s syndicates were no longer “admitted” in Illinois, thus forcing it to post a $7 million “pre-answer” bond in lieu of default – the first ever such ruling in Illinois and the nation. Shortly after the ruling, London agreed for the first time to pay defense costs for Hoke’s client, a top... Read More
The Texas Supreme Court held that an EPA PRP letter is a “suit” triggering a duty to defend under a commercial general liability policy. In 2007 and 2008, the U.S. Environmental Protection Agency (“EPA”) served notice letters on McGinnes Industrial Maintenance Corp. (“McGinnes”) and its parent company, stating that they were Potentially Responsible Parties (“PRP”) for environmental damage near the... Read More
The Court of Appeals of New York, applying New York law, ruled that fraudulent entries by authorized users into an insured’s computer system did not constitute “fraudulent entry” under the unambiguous terms of a rider of a financial institution bond. Universal American Corp. (“Universal”) is a health insurance company that offers health insurance to Medicare-eligible individuals. Universal is, in turn,... Read More
A South Carolina federal district court, applying South Carolina law, ruled that an insurer affirmatively waived both the attorney-client and work product protections from disclosure because it raised a defense that its denial of coverage was reasonable. East Bridge Lofts Property Owners Association, Inc. (“East Bridge”) sued Creekstone SC I, LLC (“Creekstone”). Creekstone tendered the claim to Crum & Forster... Read More
Excess Insurers Cannot Challenge Exhaustion By Relitigating Suits Settled By Primary Insurers; Insurers’ Attempt To Limit Payment Of Defense Costs To Claims For Which They Made An Indemnity Payment Also Rejected The New Jersey Supreme Court declined to consider an appellate ruling in favor of policyholder IMO Industries, Inc., holding that the excess insurers could not challenge the exhaustion of... Read More
