A Pennsylvania Federal District Court applying Pennsylvania law found Travelers Casualty Co. was liable for $15.3 million in pre-judgment interest for its failure to indemnify its policyholder for settlements associated with 31,000 asbestos claims. The interest was in addition to $21 million in actual damages that were previously agreed upon by the parties in a joint stipulation. Travelers originally denied... Read More

Pipeline Rupture: Faulty Workmanship and Latent Defect Exclusions Inapplicable; Question of Fact Whether Loss Caused by Rupture or Corrective Action An Arkansas Federal District Court, applying Arkansas law, denied summary judgment to insurers in a coverage dispute over a business interruption claim by an oil refinery, finding a question of fact as to whether the rupture of a pipeline or... Read More

The U.S. Court of Appeals  for the Fifth Circuit, applying Texas law, found that a policyholder-owner of four rental buildings breached the prompt-notice provision of his commercial property policies by waiting unreasonably long to present a hail damage claim, prejudicing its property insurer because the damage increased as time passed, relieving the insurer of any obligation under the policy. The... Read More

The 9th Circuit, applying California law, reversed a district court’s grant of summary judgment to the insurer on the basis of a “known damages” provision, finding that an insurer had the duty to defend where the extent of an insured’s prior knowledge of problems that caused corrosion to the underlying steel structure and pipelines of a natural gas production... Read More

A Michigan federal district court, applying Michigan law, granted summary judgment to two insurers, finding no coverage in a $2.6 million theft claim because the employee had stolen the funds from clients, and not directly from the policyholder, while knowing he was committing a wrongful act. For approximately 8 years, an employee of the policyholder, Hantz Financial Services, Inc. (“Hantz”),... Read More

Seventh Cir. Strikes Insurer’s Coverage Defenses for Failure to Defend The Seventh Circuit, applying Illinois law, held that an insurer who repeatedly refused to defend its policyholder breached its duty to defend and, therefore, was estopped from asserting coverage defenses. In August 2010, Gustavo and Maria Bernal were injured in a car accident caused by a semi-tractor trailer owned by Michael... Read More

CA Supreme Court Overrules Henkel and New Jersey Appellate Court in Accord   –  No Insurer Consent Required for Valid Assignment of Insurance Rights After A Loss The California Supreme Court, overruled its landmark ruling in Henkel v. Hartford, and held that a company can assign its rights under insurance policies to successors without an insurer’s consent after a loss has... Read More

6th Cir. Finds No “Occurrence” Triggering Duty to Defend When No Damage to Third-Party Property The Sixth Circuit, applying Michigan law, held that there was no “occurrence” under a policy where the complaint solely alleged faulty workmanship and failed to plead property damage to a third-party’s property. Steel Supply & Engineering Co. (“Steel Supply”) contracted to fabricate and erect steel for... Read More

Federal Court Holds Indemnity Coverage Available for Remediation Costs A Louisiana district court, applying New York law, held that an insurer must indemnify a power plant operator for millions in costs it incurred to remediate pollution pursuant to a consent decree relating to a Clean Air Act (CAA) suit, holding that all the expenditures fall within the scope of the... Read More

The Texas Supreme Court held that an EPA PRP letter is a “suit” triggering a duty to defend under a commercial general liability policy. In 2007 and 2008, the U.S. Environmental Protection Agency (“EPA”) served notice letters on McGinnes Industrial Maintenance Corp. (“McGinnes”) and its parent company, stating that they were Potentially Responsible Parties (“PRP”) for environmental damage near the... Read More