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 to... Read More
Ct. of Appeals of NY reverses itself.
The Court of Appeals of New York, by a vote of 4-2, reversed its previous ruling that a breach of the duty to defend precludes the insurer from later challenging its indemnity obligation. In its previous ruling the court held that because Zurich had breached its duty to defend it could not assert... Read More
Does not begin to run until entry of final underlying judgment.
A New York Federal District Court applying Rhode Island and Massachusetts laws ordered an insurer to reimburse defense costs related to a CERCLA action involving the release of ferric ferrocyanide during a remediation of a Massachusetts landfill (Mendon Road in Attleboro, MA). The insurer had asserted that the suit... Read More
2nd Cir. rewrites NBA referee policies based on marketing pitch.
The Second Circuit Federal Court of Appeals reversed a Connecticut Federal District Court’s dismissal of a suit involving two former NBA referees. The policyholders argued that the insurance salesman represented that the “own occupation” policy was broader than a standard disability policy in that it would cover them until age... Read More
10th Cir. applying Kansas law finds insurer must demonstrate “substantial prejudice.”
The Tenth Circuit reversed an earlier win for Lexington Insurance Co., finding the insurer was still potentially on the hook for $7.5 million in damages to a salt mine, even though its policyholder reported water streaming into the mine two years after the problem was actually found. The court... Read More
Finding that product actually contained salmonella unnecessary to conclude “property damage” occurred.
The Eighth Circuit has upheld a Minnesota federal judge’s ruling that The Netherlands Insurance Co. must cover instant milk supplier Main Street Ingredients LLC’s $1.4 million settlement with Malt-O-Meal Co. over losses from an instant oatmeal recall tied to salmonella fears. The court rejected Netherlands’ argument that the... Read More
Insured need not obtain insurer consent for settlement to be covered.
The Illinois Fourth District Court of Appeals held an insurer liable for a $1,739,000 settlement in a TCPA (“blast fax”) action. This case was on remand from the Illinois Supreme Court which had previously overturned the court’s original finding that TCPA damages were punitive and, thus, not insurable. The... Read More
Pennsylvania law applies and no coverage for TCPA (“blast fax”) action.
The Illinois Second District Court of Appeals held that whether Maryland Casualty Company and Assurance Company of America (Zurich) must cover damages relating to a blast fax action turned on whether Pennsylvania or Illinois law applied. Based on the court’s analysis of Pennsylvania federal court opinions, the court held... Read More
Allegation that appraisals for parent company would be given to 3rd party constitutes covered professional services.
The Illinois First District Court of Appeals held that Liberty Surplus Insurance Corp. and an Ace Ltd. insurer had a duty under professional liability policies to defend two Hilco Trading LLC subsidiaries against claims that they “grossly inflated” loan collateral appraisals that underlying plaintiffs... Read More
Decision to discontinue program was “professional services.”
The First District Appellate Court held that Lexington Insurance Company breached its defense and indemnity obligations with respect to a settlement Rosalind Franklin University of Medicine and Science paid in an underlying suit filed by former patients seeking compensation for the school’s decision to discontinue an experimental breast cancer vaccine program. The court... Read More