“Vertical Exhaustion” of Long-Tail Claims Allowed for Excess Coverage In a unanimous ruling, the California Supreme Court, applying California law, held “vertical exhaustion” is appropriate when continuous injury occurs over the course of multiple policy periods for which an insured purchased multiple layers of excess insurance. Thus, a policyholder is entitled to access otherwise available coverage under any excess policy... Read More
No drop-down duty when primary didn’t defend A Wisconsin appeals court, applying Wisconsin law, reversed the circuit court’s opinion and held that Central National Insurance Company of Omaha and Westchester Fire Insurance Company (collectively “Central National”) had no duty to defend Johnson Controls, Inc. (“Johnson Controls”) for environmental contamination under multiple excess insurance policies. The appellate court held that there... Read More
9th Cir (CA) Potential for coverage triggers defense duty. The Ninth Circuit, applying California law, upheld the grant of summary judgment in favor of the policyholder, finding the district court properly held that a class action complaint alleged discrimination in a manner that triggered the insurer’s duty to defend. PHP Group, Inc.’s (“PHP”) employees sued PHP for violating the California Labor... Read More
Lloyds $25M excess policy not triggered until underlying insurer pays its full limits. An Arizona trial court held that an excess pollution policy was not triggered until the primary insurer paid its entire underlying limits. In making its ruling, the court rejected the insured’s argument that the excess policy was triggered when losses exceeded the underlying limit, regardless of whether... Read More
On June 27, 2014, in a case of first impression, Chicago’s Illinois Appellate Court 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. The issue addressed by the Court was whether an employee can sue his employer outside of the Workers’ Compensation Act (Act) and... Read More
The Illinois First District Appellate Court rejected a settling insurer’s attempt to deselect itself and target tender the policyholder’s other available coverage, based on assignment of this right by the policyholder in the settlement agreement. The court held thatAmco Insurance Company could not force Cincinnati Insurance Company to contribute to a $1.5 million settlement of a personal injury lawsuit, finding... 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... Read More
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
