The Illinois Supreme Court rejected State Farm’s argument that a choice-of-law analysis required application of Indiana law, which Indiana federal district courts predicted would have relieved State Farm of its duty to defend its policyholder in a TCPA case. In an action filed in Illinois state court, State Farm acknowledged that, under Illinois law, it would have a duty to... Read More
The Illinois Second District Appellate Court rejected plaintiff G.M Sign, Inc.’s attempt to recover $4.9 million from State Farm Fire & Casualty Company under an insurance policy containing a TCPA exclusion, finding that the exclusion also barred coverage for the alternative causes of action of conversion and consumer fraud. The Telephone Consumer Protection Act exclusion at issue barred coverage for... Read More
The Seventh Circuit Court of Appeals rejected a contractor’s argument that it only has collateral and indemnity obligations to its bonding agent if it is actually found liable for a breach of the surety bonds. The court upheld summary judgment in favor of Hanover Insurance Co. for approximately $200,000 in damages and attorneys’ fees against a contractor who failed to... Read More
A New York appeals court affirmed the lower court’s ruling that RSUI Indemnity Co. does not have to provide indemnity coverage for Forest Laboratories’ $65 million class action settlement because lower level excess insurers did not exhaust their policies first. RSUI was a 7th layer excess carrier above a primary policy in an $80 million “tower” of insurance. Forest... Read More
The First Circuit U.S. Court of Appeals held that AIG must advance defense costs to the directors and officers of Westernbank of Puerto Rico because it was unclear whether the insured-vs.-insured exclusion applied. The FDIC sent a written demand to the bank’s directors and officers for the defunct bank’s losses. The directors and officers notified AIG of the claim,... Read More
No Horizontal Exhaustion By Layer For Excess Under NY Law – A Delaware state court applying New York law held that the horizontal exhaustion rule applies only to primary and umbrella policies, and does not apply to excess layers. Horizontal exhaustion by layer generally means that in a long-tail situation such as asbestos or pollution, an entire layer of... Read More
An Illinois federal district court found that withdrawal of all coverage defenses by a primary insurer does not vitiate a conflict of interest and the policyholder’s right to independent counsel where potential liability exceeds the primary insurer’s limits. The district court, applying Illinois law, determined that Liberty Surplus Insurance Company breached its duty to defend Perma-Pipe Inc. by refusing to... Read More
Ct. of Appeals of NY reverses itself. The Court of Appeals of New York, by a vote of 4-2, reversed its previous ruling that a breach of the duty to defend precludes the insurer from later challenging its indemnity obligation. In its previous ruling the court held that because Zurich had breached its duty to defend it could not assert... Read More
Does not begin to run until entry of final underlying judgment. A New York Federal District Court applying Rhode Island and Massachusetts laws ordered an insurer to reimburse defense costs related to a CERCLA action involving the release of ferric ferrocyanide during a remediation of a Massachusetts landfill (Mendon Road in Attleboro, MA). The insurer had asserted that the suit... Read More
2nd Cir. rewrites NBA referee policies based on marketing pitch. The Second Circuit Federal Court of Appeals reversed a Connecticut Federal District Court’s dismissal of a suit involving two former NBA referees. The policyholders argued that the insurance salesman represented that the “own occupation” policy was broader than a standard disability policy in that it would cover them until age... Read More
