Nebraska appellate court finds property damage caused by ground settling is not an “occurrence.” A Nebraska appellate court, applying Nebraska law, held that a contractor’s settlement of an underlying property damage suit was not covered under a comprehensive general liability policy issued by Columbia National Insurance Co. (“Columbia”), because the underlying property damage claims arose out of faulty workmanship, which... Read More

2nd Circuit holds insurer need not establish prejudice to avoid coverage for San Diego’s environmental liabilities. The Second Circuit Court of Appeals, applying New York law, upheld a district court finding that the insured, The City of San Diego, California (the “City”), provided late notice to its insurer, Indian Harbor Insurance Co. (“Indian Harbor”), and therefore was not entitled to... Read More

N.J. Appellate Court rejects excess insurers’ attempt to relitigate claims to establish exhaustion and rejects insurers’ argument that they only pay defense costs for claims for which they make an indemnity payment. First, a New Jersey appellate court, applying New Jersey law, rejected excess insurers’ attempt to force the policyholder, IMO Industries, Inc. (“IMO”). to re-litigate each settlement to establish... Read More

Texas federal court finds Pollution Exclusion does not bar bodily injury claims arising from exposure to hazardous chemicals in mud. A Texas federal court, applying Texas law, found that an insurer could not rely upon a pollution exclusion to deny a defense for a bodily injury claim caused by hazardous materials that were embedded in mud. The pollution exclusion did... Read More

Missouri appellate court finds insurer bad faith in construction defect dispute, based, in part, on insufficient reservation of rights. A Missouri appellate court affirmed a jury verdict against an insurer for bad faith. The court held that the insurer’s reservation of rights letters were insufficient and, as a result, the insurer was precluded from later denying liability due to non-coverage.... Read More

A Qualcomm Case For Policyholders:  Texas Appellate Court Rules Oil Cleanup Settlement With Primary Insurers For Less Than Full Limits Does Not Preclude Access To Excess Coverage. A Texas appellate court, applying Texas law, held that Plantation Pipe Line Company (“Plantation”) did not forfeit its excess insurance with Highlands Insurance Company (“Highlands”) by settling with underlying insurers for less than... Read More

Construction Defect:  7th Cir. Finds Damage To Condominium Residents’ Property Caused By Poor Workmanship During Building Construction Not Covered. The Seventh Circuit Court of Appeals, applying Illinois law, held that a developer’s poor workmanship in constructing a condominium was not an “occurrence” providing coverage for damage to the condominium itself.  Furthermore, while damages to the residents’ personal property potentially constituted... Read More

Late Notice:  No Coverage Where Policyholder Failed To “Immediately Notify” Insurer Of Arbitration Claim. A Texas appeals court, applying Texas law, held Lexington Insurance Co. (“Lexington”) had no duty to cover a $5 million arbitration award obtained by a former employee of its insured who was stabbed in the neck during a workplace scuffle, because Lexington received late notice of... Read More

Asbestos:  Pennsylvania Federal Court Finds Excess Insurer Has Duty To Defend In Addition To Limits, Even Where Its Policy States Its Duty To Defend Is Not In Addition To Limits A Pennsylvania federal court, applying Pennsylvania law, refused to reconsider its rulings in a coverage lawsuit holding that Old Republic Insurance Company’s (“Old Republic”) duty to defend Ampco-Pittsburgh Corp. (“Ampco-Pittsburgh”)... Read More

Conflict-Of-Interest – Independent Counsel:  Minnesota Federal Court Rejects Insurer’s Claim That Reservation-of-Rights Did Not Require Insurer To Pay Policyholder’s Counsel. A Minnesota federal court, applying Minnesota law, held that Arrowood Indemnity Company’s (“Arrowood”) reservation of rights, while accepting defense of an class action on behalf of Select Comfort Corporation (“Select Comfort”), created a conflict of interest that converted its duty... Read More