Common Interest Doctrine Applicable as Exception to Attorney-Client Privilege in Case Between Insured and its Broker. On interlocutory appeal, the Illinois Appellate Court for the Second District, applying Illinois law, held that the “common-interest” doctrine applies as an exception to the attorney-client privilege when an insured sued its insurance broker for malpractice based on the denial of a claim.  Thus,... Read More

Malpractice action against firm hired to provide policyholder’s defense permitted In a 3-2 opinion, the South Carolina Supreme Court held that Sentry Select Insurance Co. (“Sentry”) could maintain a direct malpractice action against a law firm it had retained to defend its policyholder in an auto accident case.  The court’s opinion was in response to certified questions posed by a... Read More

Insurer denied summary judgment due to unresolved factual questions   A federal court for the Northern District of Illinois, applying Illinois law, denied an insurer’s motion for summary judgment on an insured’s claim for bad faith failure to settle.  The court found that genuine issues of material fact existed regarding the insurer’s true assessment of the underlying claim. The Surgery Center... Read More

From employer’s point of view, employee’s crime unintentional The California Supreme Court ordered Liberty Surplus Insurance Corp. (“Liberty” is a Liberty Mutual affiliated company) to provide a defense to Ledesma & Meyer Construction Co. (“L & M”) for a complaint that alleged it had negligently hired and failed to supervise an employee that sexually assaulted a student at a middle... Read More

Insurer not equitably estopped from denying indemnity coverage despite defending without ROR A federal court for the Northern District of Illinois, applying Illinois law, held that an insurer was not estopped from denying indemnity coverage where the claim arose outside of the policy period because the insured could not demonstrate any “clear, concise, and unequivocal evidence” of control of the... Read More

Policy above SIR is primary insurance and horizontal exhaustion not required before policy is triggered An Illinois appellate court for the First District, applying Illinois law, affirmed the circuit court’s ruling and held that an insured’s policy above a self-insured retention (“SIR”) constituted primary insurance.  The appellate court made this determination based on the following facts: (1) the policies imposed... Read More

Policyholder not responsible in long-tail matters for periods when insurance was unavailable The New Jersey Supreme Court, applying New Jersey law, upheld the “unavailability rule” under Owens-Illinois and held that the allocation of Honeywell’s costs relating to asbestos bodily injury claims must be limited to the period from the date of first exposure to 1987, the year in which Honeywell... Read More

Policyholder prevails on duty to defend, pollution exclusion, asbestos exclusion, trigger and notice A New York circuit court, applying New York law, held that primary insurer, The Burlington Insurance Company (“Burlington”), had a duty to defend its insured in the underlying lawsuits which alleged personal injury as a result of clean-up work following the World Trade Center disaster on September... Read More

Extrinsic evidence shows Cooper successor to McGraw-Edison / post-loss assignment permissible A New Jersey Appellate Court affirmed a trial judge’s ruling that Cooper Industries LLC (“Cooper”) could access primary and umbrella policies from 1971 to 1980 that were provided to its predecessor, McGraw-Edison Corp. (“McGraw Edison”) for liabilities arising from U.S.E.P.A. Superfund clean-up actions.  The policies were issued by Continental... Read More

Prior Insurance Clause entitles insurer to $2.6M setoff of $58M judgment after complex allocation analysis A New York federal district judge, applying New York law, held that Lamorak Insurance Company was only entitled to a set-off of $2.6 million against the nearly $58 million judgment Olin Corporation obtained against it in connection with costs incurred relating to environmental contamination at... Read More