Affirms summary judgment to insurer in grain silo explosion case The Seventh Circuit affirmed a trial court ruling that policyholder West Side Salvage Inc. (“West Side”) was not entitled to seek bad faith damages from RSUI Indemnity Co. (“RSUI”) for its alleged failure to properly protect its interests by settling an underlying claim against it.  West Side was contracted to... Read More

Travelers required to provide coverage despite missing policies in pollution case An Illinois appellate court (1st Dist.), applying Illinois law, upheld the circuit court’s ruling that an insured proved by a preponderance of evidence the material terms and conditions of several years of missing comprehensive general liability (“CGL”) and auto policies. Rogers Cartage Company (“Rogers”), a trucking company that hauls bulk... Read More

“Logical extension of Waste Management Common-Interest exception” to privilege waiver An Illinois appellate court, applying Illinois law, held that co-defendants in a case who agree to share information pursuant to their common interest in defeating their litigation opponent do not waive either their attorney-client or work-product privilege. A purported class action lawsuit was filed against State Farm Mutual Auto Insurance Company... Read More

Potential indemnitor not indispensable party for PCB insurance case / diversity jurisdiction maintained. A district court for the Northern District of Illinois, applying the Federal Rules of Civil Procedure and Illinois law, held that a potential indemnitor to a party is not indispensable to a coverage dispute, and thus, not required to be joined, especially where there is no contractual... Read More

Professional liability insurer had duty to defend and provide independent counsel for sexual misconduct claim. A district court for the Northern District of Illinois, applying Illinois law, held allegations of sexual misconduct against a psychiatrist trigged a professional liability insurer’s duty defend.  According to the court, the allegations constituted negligence in the performance of professional services and amounted to bodily... Read More

Policyholder must hire and pay for counsel to assert counterclaim in case being defended by insurer. The First Circuit, applying Massachusetts law, held that the presence of a counterclaim, which the insurer neither is required to prosecute nor pay for, does not create a conflict of interest entitling an insured to independent counsel.  Thus, the court found that the insured... Read More

Litigation insurer liable for defense expenses for WTC claims after policy exhausted. The New York Supreme Court, applying New York law, held that thousands of asbestos-related personal injury claims arising from exposure to asbestos during the construction of the original World Trade Center site (the “WTC”) triggered coverage under a “litigation insurance” policy issued by American Home Assurance Co. (“American... Read More

CA Bankruptcy Ct. orders CNA to pay IL §155 attorneys’ fees, expenses, prejudgment interest, maximum statutory penalty and policy limits. The Bankruptcy Court for the Northern District of California awarded the Trustee of the CFB/WFB Liquidation Trust (the “Trust”) extra-contractual damages against Continental Casual Company (“Continental”) under Illinois Insurance Code 215 ILCS 5/155 for vexatious and unreasonable conduct due to... Read More

Multiple asbestos claims entitled to only one occurrence limit; court criticizes over-use of confidentiality designations. An Illinois appellate court, applying Illinois law, affirmed the trial court’s ruling and held that underlying asbestos claims constituted a single occurrence, and, thus, the per-occurrence limit, not aggregate limits, applied to the claims. Beginning in 1983, United Conveyor Corporation (“United”) was named as a defendant... Read More

Marketing and sale of opioids did not constitute an “accident” and was barred by product liability claim exclusion On November 6, 2017, the California Court of Appeal for the Fourth Appellate District affirmed a trial judge’s decision that The Traveler’s Property Casualty Company of America (“Travelers”) was not obligated to defend pharmaceutical manufacturers in two underlying actions alleging deceptive marketing... Read More