Control Of Defense:  New York Appellate Division Finds Policyholder Has No Standing To Sue Reinsurer Or Right To Demand Independent Counsel. A New York appellate court, applying New York law, held that Colgate-Palmolive Company (“Colgate”) cannot sue its carrier’s reinsurers relating to the control of the insured’s underlying defense because Colgate had no contractual relationship with the reinsurers. The dispute between... Read More

Number Of Occurrences:  West Virginia Supreme Court Finds Separate Limits Applicable In Medical Malpractice Case. The West Virginia Supreme Court, applying West Virginia law, ruled that separate limits of $3,000,000 are available for medical malpractice claims in addition to a global settlement of the same amount, and that reformation of the policy was not warranted. The underlying medical malpractice claims relate... Read More

Settlement Covered Despite Lack Of Insurer Consent:  Michigan Federal Court Finds Coverage For Policyholder’s Unilateral Settlement Of Claims Without Insurer Consent. A Michigan U.S. district court, applying Michigan law, held an excess insurer liable to Stryker Corporation (“Stryker”) for settlements of claims related to defective artificial knees, notwithstanding the fact that Stryker did not receive the insurer’s consent prior to... Read More

Construction Defect:  5th Cir. Refuses To Apply Contractual Liability Exclusion To Alleged Failure To Do Work In “Good And Workmanlike Manner.” The Fifth Circuit Court of Appeals, applying Texas law, held that a contractual-liability exclusion did not apply to limit the insurer’s coverage obligations to homeowners because the contractually-assumed duty in question did not expand liability. The homeowners contracted with Arrow... Read More

Nebraska appellate court finds property damage caused by ground settling is not an “occurrence.” A Nebraska appellate court, applying Nebraska law, held that a contractor’s settlement of an underlying property damage suit was not covered under a comprehensive general liability policy issued by Columbia National Insurance Co. (“Columbia”), because the underlying property damage claims arose out of faulty workmanship, which... Read More

2nd Circuit holds insurer need not establish prejudice to avoid coverage for San Diego’s environmental liabilities. The Second Circuit Court of Appeals, applying New York law, upheld a district court finding that the insured, The City of San Diego, California (the “City”), provided late notice to its insurer, Indian Harbor Insurance Co. (“Indian Harbor”), and therefore was not entitled to... Read More

N.J. Appellate Court rejects excess insurers’ attempt to relitigate claims to establish exhaustion and rejects insurers’ argument that they only pay defense costs for claims for which they make an indemnity payment. First, a New Jersey appellate court, applying New Jersey law, rejected excess insurers’ attempt to force the policyholder, IMO Industries, Inc. (“IMO”). to re-litigate each settlement to establish... Read More

Texas federal court finds Pollution Exclusion does not bar bodily injury claims arising from exposure to hazardous chemicals in mud. A Texas federal court, applying Texas law, found that an insurer could not rely upon a pollution exclusion to deny a defense for a bodily injury claim caused by hazardous materials that were embedded in mud. The pollution exclusion did... Read More

Missouri appellate court finds insurer bad faith in construction defect dispute, based, in part, on insufficient reservation of rights. A Missouri appellate court affirmed a jury verdict against an insurer for bad faith. The court held that the insurer’s reservation of rights letters were insufficient and, as a result, the insurer was precluded from later denying liability due to non-coverage.... Read More