Legal Costs for Criminal Defense of Pollution Claims Not “Clean-up Costs” The District Court for the Southern District of Texas, applying Texas law, held that an insurer had no duty to indemnify its policyholder under a pollution liability policy for legal fees incurred in a criminal matter stemming from pollution.  No environmental laws required the policyholder to incur criminal defense... Read More

Two Class Actions About Impropriety in Performing Probation Services Are Not “Related” The Superior Court of the State of Delaware, applying Delaware law, held that two class actions alleging impropriety regarding the collection of fees from probationers were not “related” for purposes of a “Prior Acts or Prior Notice” exclusion. Providence Service Corporation (“Providence”) owns Pathways Community Corrections, Inc. (“PCC”).  PCC... Read More

Setoffs Permitted Against Arbitration Award The Illinois First District Appellate Court, in an opinion written by Justice Lavin with Justices Mason and Hyman concurring, affirmed the circuit court’s ruling that underinsured motorist coverage can be set-off by amounts recovered by the insured from the underinsured motorists and other available insurance. Joseph Gean was involved in a collision with a driver that... Read More

Decedent Potentially “Related by Marriage Insured” Under Former Stepmother’s Auto Policy The Illinois Fifth District Appellate Court (Justices Overstreet, Cates and Moore), applying Illinois law, held an individual who died in an auto accident was potentially entitled to medical and uninsured motorist coverage under his former stepmother’s auto policies, because the “related by marriage” requirement to be an insured was... Read More

Notice of Events That May Become a Claim Not Enough to Trigger Coverage The Eleventh Circuit, applying Florida law, affirmed the District Court’s grant of an insurer’s motion for summary judgment due to the policyholder’s failure to provide notice of a “Claim” within the policy period or discovery period of the claims-made Executive and Organization Liability Insurance policy. After obtaining an... Read More

Insurer Must Replace All Siding Even Though Only Two Sides Damaged The Seventh Circuit (Judges Easterbrook, Kanne, and Hamilton), applying Illinois law, held insurer was required to cover the cost to replace aluminum siding on all sides of the buildings owned by the insured, even though the wind and hail damage occurred on two sides of the buildings, because the... Read More

No Duty to Defend Mediation Despite Related Lawsuit The Illinois First District Appellate Court, in an opinion written by Justice Cunningham with Justices Delort and Harris concurring, applying Illinois law, upheld the trial court’s decision which found no duty to defend a mediation regarding liability for environmental contamination despite the fact that a related lawsuit was later filed by a... Read More

1) Public Policy Precludes Application of Notice Prejudice Rule; 2) Polluted State’s Law Applies Public Policy Precludes Application of Notice Prejudice Rule – California Supreme Court Responding to certified questions from the Ninth Circuit Federal Court of Appeals, the California Supreme court declared that California’s notice-prejudice rule is a fundamental public policy in relation to a choice-of-law analysis.  It also held... Read More

“As Reported” Exclusion Applies to Claims Reported as of Policy Effective Date In July, the Seventh Circuit, in an opinion written by Circuit Judge Barrett, reversed the district court and entered summary judgment in favor of the insurer.  At that time, the Seventh Circuit found the “as reported” language in the policy at issue precluded coverage for the underlying lawsuit,... Read More

“Annual” Pilot Training Cannot Be Completed During Policy Term if Not Completed in Previous Policy Years The Illinois First District Appellate Court, in an opinion written by Justice Gordon, applying Illinois law, reversed the lower court’s ruling that damage to an insured’s airplane was covered by a specialty insurance policy.  The lower court reasoned that coverage existed because it found... Read More