The Sixth Circuit, applying Ohio law, held that excess insurer Westchester Fire Insurance Company (Westchester) had a duty to defend IMG Worldwide Inc. (IMG) in litigation stemming from a failed real estate project, finding Westchester’s duty to defend was triggered when primary insurer Great Divide Insurance Company (Great Divide) denied coverage. IMG was sued for millions of dollars for its... Read More

A New York appellate court ordered AIG and other insurers to provide TransCanada Energy USA Inc. with communications involving attorneys and claims handling personnel in a $70 million coverage battle over the repair costs and business interruption losses stemming from the shutdown of a damaged turbine at a power plant in Queens, New York. The insurers argued that the documents... Read More

An Indiana federal district court, applying Michigan law, held that offsite soil and groundwater contamination resulting from Visteon Corporation’s (Visteon) historical use of trichloroethylene (TCE) as a degreaser was barred by the absolute pollution exclusion contained in its National Union Fire Insurance Company of Pittsburgh, P.A. (National Union) insurance policies. Visteon operated a Connersville, Indiana plant that manufactured automotive component climate... Read More

A California Federal Court, applying California law, has held that policyholder Signal Products, Inc.’s (Signal) utilization of two law firms as independent counsel was not per se unreasonable.  Signal makes and sells Guess? products.  Signal became embroiled in an intellectual property lawsuit brought by Gucci.  Signal was represented in the underlying litigation by one firm, while another firm (Signal’s... Read More

A Virginia Federal Court, applying Virginia law, held that The Travelers Indemnity Company of America (Travelers) had a duty to defend Portal Healthcare Solutions, LLC (Portal) with regard to an underlying action alleging Portal posted patient records on the internet, causing them to become publically available. Portal specializes in the electronic safekeeping of medical records for medical providers.  A class... Read More

5th Cir. Finds Total Pollution Exclusion Endorsement Trumps Broad Property Damage Endorsement The Fifth Circuit Court of Appeals, applying Texas law, held that a Total Pollution Exclusion (TPE) endorsement bars insurance coverage that would otherwise be available under a property damage endorsement. Liberty Mutual Insurance Company (Liberty) issued a commercial insurance policy to Linn Energy, LLC and Linn Operating, Incorporated (Linn). ... Read More

Minnesota Federal Judge Forces AIG To Produce Communications With Reinsurers, Loss Reserves, And Underwriting Files A Minnesota federal judge has ordered AIG to produce loss reserve information, underwriting files, and communications with its reinsurers in a bad faith insurance dispute with its policyholder, Donaldson Co., on whose behalf AIG had settled two underlying lawsuits arising out of defects in air-intake... Read More

CA Appellate Court Finds Damage From Installation Of Defective Steel Framing Is A Business Risk Not Covered By CGL Policy A California Appellate Court, applying California law, held that Liberty Surplus Insurance Company (Liberty) had no coverage obligation to a subcontractor who installed defective steel framing in a California apartment complex, because the loss constituted a business risk and was... Read More

5th Cir. Rejects Excess Insurers’ Assertion That Their Policies Are Only Triggered When Underlying Policies Are Exhausted By Claims Covered By Their Excess Policies The Fifth Circuit Court of Appeals, applying Texas law, held that the retained limits of excess policies are satisfied where the underlying policies are exhausted by claims that are not covered under the excess policies. In September... Read More

Illinois Appellate Court Finds Exclusivity Provisions No Bar To Direct Action Against Employer For Asbestos-Related Disease In a case of first impression, the First District Illinois Appellate Court, applying Illinois law, held employers liable for direct claims by former employees for asbestos-related disease that would otherwise have been barred as untimely under workers’ compensation statutes.  This decision has potential implications... Read More