No Duty to Reveal Existence of Umbrella Limits in Response to Statutory Request to Disclose Policy Limits An Illinois appellate court, applying Illinois law, upheld the circuit court’s ruling that a third party does not have standing to file an action for bad faith under Section 155 of the Illinois Insurance Code.   The appellate court also upheld the circuit court’s... Read More

The Seventh Circuit, applying Illinois law, ruled that an insurer had no duty to cover a subcontractor’s settlement with a condominium association relating to property damage caused by the subcontractor’s faulty window installation because the cost of repairing defectively completed work is not covered under standard commercial general liability (“CGL”) policies. Metro North Condominium Association (“Metro North”), the governing body... Read More

Sexual abuse does not constitute professional services. The Bankruptcy Court for Minnesota, applying Minnesota law, held coverage for sexual abuse claims against a priest are not barred by a professional services exclusion in a Comprehensive General Liability Policy, because the abuse claims do not arise out of the priest’s professional service. The Diocese of Duluth (the “Diocese”) filed a petition under... Read More

Exclusion bars coverage for both permanent and sudden and accidental occurrences including carbon monoxide leaks. In a 5-4 opinion, the Supreme Court of Oklahoma held that Oklahoma public policy does not prohibit the enforcement of an Indoor Air Exclusion.  Public policy was raised as a concern because, under the district court’s interpretation, the Indoor Air Exclusion at issue barred coverage... Read More

The Seventh Circuit, applying Indiana law, held that Travelers Property Casualty Company of America (“Travelers”) is liable to the extent the Indianapolis Airport Authority (“Airport Authority”) can prove that it incurred expenses to reduce costs for which Travelers otherwise would have been liable due to a construction incident which delayed the project .  The mitigation expenses are recoverable under... Read More

Verdict in excess of limits exposes insurer to discovery of past bad faith claims and excess verdicts, as well as outside counsel fees and in-house incentives. An Illinois district court, applying federal civil procedure and Illinois law, ordered insurers, American Physicians Assurance Corporation (“APAC”) and American Physicians Capital (“APC”), to comply with certain discovery requests relevant to the insured’s, The... Read More

Deems policy language ambiguous and, without applying contra proferentem, remands for consideration of custom and practice. The Second Circuit, applying New York law, in a ruling by summary order, vacated the ruling of the district court and held that the maritime policy at issue was ambiguous with regard to its duty to pay investigation and defense costs incurred after... Read More

No advertising injury and barred by intellectual property exclusion. An Illinois federal court, applying Illinois law, held that Sentinel Insurance Co. Ltd. (“Sentinel”) has no duty to defend or indemnify Yorktown Industries, Inc. (“Yorktown”) in a lawsuit alleging misappropriation of customer lists and sales information, because the allegations do not constitute “personal and advertising injury” and, regardless, the claim is... Read More

Adopts majority rule finding anti-assignment clause in policy not a basis to deny coverage.    The New Jersey Supreme Court, applying New Jersey law, upheld the appellate court and adopted the majority rule that an insured can validly assign its rights under insurance policies without the insurer’s consent once a loss has already occurred.  Thus, the anti-assignment clause in an... Read More