Mealey's Emerging Insurance Disputes : Mealey's : Legal News & Analysis

Mealey's Emerging Insurance Disputes

May 31, 2024
Communicable Disease Business Income Coverage Limit Is $100,000 Per Occurrence

NEWARK, N.J. — A federal judge in New Jersey ruled that a commercial insurance policy’s applicable limit for its Communicable Disease Business Income Coverage is $100,000 per occurrence and the threat of the spread of the coronavirus and not Gov. Phil Murphy’s executive orders triggered this coverage, granting an insurer’s motion for summary judgment and denying an insured’s cross-motion in a declaratory judgment lawsuit arising from the pandemic.
May 31, 2024
Professional Services Exclusion Bars Coverage For Carbon Monoxide Injury Suits

SPRINGFIELD, Ill. — A trial court did not err in finding that no coverage is owed for underlying personal injury lawsuits stemming from a carbon monoxide leak because the underlying allegations involve the insured’s rendering of professional services and are therefore barred from coverage by the policies’ professional services exclusion, the Fourth District Illinois Appellate Court said in affirming the trial court’s ruling.
May 30, 2024
U.S. High Court Rules In Favor Of NRA In Free Speech Suit Arising From Insurance Program

WASHINGTON, D.C. — The U.S. Supreme Court on May 30 unanimously ruled in favor of the National Rifle Association of America (NRA) in the NRA’s challenge to the Second Circuit U.S. Court of Appeals’ finding that the NRA failed to plausibly assert that the former superintendent of the New York State Department of Financial Services (DFS) unconstitutionally threatened or coerced an insurer or other entities to stifle its speech.
May 30, 2024
11th Circuit Affirms No CGL Coverage Owed For Negligence Suit Against Landscaper

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower court’s summary judgment ruling in favor of a commercial general liability insurer in a landscaper insured’s breach of contract and bad faith lawsuit seeking coverage for an underlying negligence action, finding that the insurance application expressly disclaims the work the insured did and the bad faith claim fails because the insurer had a lawful basis to deny the claim.
May 29, 2024
2nd Circuit Vacates, Remands Ruling In Insurer’s Indemnification Suit

NEW YORK — The Second Circuit U.S. Court of Appeals vacated a lower federal court’s dismissal of an insurer’s breach of contract lawsuit seeking indemnification for the settlement of an underlying class action alleging that it undervalued its customers' vehicles when it processed total loss insurance claims, finding that the lower court erred in determining that the insured failed to allege facts sufficient to demonstrate that the underlying claims resulted from or arose out of its use of the defendant’s valuation tool.
May 29, 2024
Washington Panel Affirms Dismissal Of Quest Diagnostics’ Coronavirus Coverage Suit

SEATTLE — A Washington appeals panel held May 28 that Quest Diagnostics Inc. failed to establish that the presence of COVID-19 resulted in physical loss or damage to its insured property, affirming a lower court’s dismissal of the insured’s breach of contract and declaratory judgment lawsuit seeking coverage under the civil authority policy provision for its business interruption losses.
May 29, 2024
Winemaker Adds Bad Faith Claim In Washington Coverage Suit Over Defective Wine

SEATTLE — A wine producer amended its complaint in a Washington court adding claims against its insurer for breach of the duty of good faith and fair dealing and violations of Washington’s Consumer Protection Act and the Insurance Fair Conduct Act in its lawsuit seeking coverage for the “tragic damage to 320,922 cases of premium Washington wine” that resulted in a loss of more than $8 million.
May 28, 2024
Estate Seeks Panel Rehearing In Coverage Dispute Arising From Wrongful Death

CINCINNATI — An estate that brought an underlying wrongful death lawsuit against an insured asked the Sixth Circuit U.S. Court of Appeals to reconsider its ruling that affirmed the part of a lower federal court’s order that determined that a commercial general liability insurance policy’s assault and battery exclusion relieved the insurer of its duty to indemnify.
May 28, 2024
4th Circuit Affirms No Coverage Ruling In Coronavirus Coverage Suit

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling in favor of an insurer in Mars Inc.’s declaratory judgment lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding no reversible error in the lower court’s ruling.
May 24, 2024
California High Court: Presence Of COVID-19 Does Not Constitute Direct Physical Loss

SAN FRANCISCO — Answering “no” to a certified question from the Ninth Circuit U.S. Court of Appeals, the California Supreme Court held May 23 that the “actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
May 24, 2024
N.C. High Court Agrees To Review Clothing Retailer’s Coronavirus Coverage Suit

RALEIGH, N.C. — The North Carolina Supreme Court on May 23 granted a clothing retailer insured’s request to review an appeals court’s ruling that affirmed a trial court’s dismissal of its lawsuit seeking coverage for its losses arising from the COVID-19 pandemic.
May 24, 2024
LTC Insurer Gets Extension To Answer Class Complaint Alleging Unfair Rate Hikes

CHICAGO — In a docket entry, an Illinois federal judge granted a long-term care (LTC) insurer an extension to answer an amended complaint in a putative class action alleging that the insurer sought premium increases in different states and for different amounts without considering policy language prohibiting nonuniform rate increases.
May 23, 2024
Failure To Settle Medical Malpractice Claim Was Not Bad Faith, Federal Judge Says

ROCKFORD, Ill. — A bad faith claim brought against a professional liability insurer for failing to settle an underlying medical malpractice claim prior to the entry of jury verdict award that was in excess of the policy limits must be dismissed because the evidence does not support a finding that the insurer acted in bad faith, an Illinois federal judge said in granting the insurer’s motion for summary judgment.
May 22, 2024
Trustee Seeks Approval Of $2.9M Settlement In Insolvent Insurer’s Bankruptcy Case

WILMINGTON, Del. — A trustee for estates in an insolvent insurer’s Chapter 7 bankruptcy proceeding filed a motion to approve a $2.9 million settlement agreement between the parties, which includes a $100,000 payment to a broker who has assisted the trustee in managing the assets in the proceeding.
May 22, 2024
2 More Insurers Dismissed In Viacom’s D&O Coverage Dispute In Delaware Court

WILMINTON, Del. — Viacom Inc. and two more of its insurers stipulated and agreed to dismiss with prejudice the claims against the insurers in Viacom’s lawsuit seeking directors and officers liability coverage for underlying claims that its directors, officers and controlling shareholders breached their fiduciary duties in connection with a 2019 merger with CBS Corp.
May 21, 2024
8th Circuit Affirms Insurer Has Duty To Defend Against Trademark Infringement Suit

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on May 20 affirmed a lower federal court’s finding that an insurer has a duty to defend its computer networking products reseller insured against an underlying trademark infringement lawsuit, noting that this does not resolve the issue of whether the insurer has a duty to indemnify, which will turn on the resolution of the underlying lawsuit.
May 21, 2024
7th Circuit Affirms Court In Coverage Dispute Over BIPA Violation Claims

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a lower federal court’s rulings in a coverage dispute arising from claims that the insured violated the Illinois Biometric Information Privacy Act (BIPA), finding that an umbrella insurance policy provides for defense and indemnity for the insured only after its underlying insurance and deductibles are exhausted.
May 20, 2024
5th Circuit Refuses To Rehear Dispute Over $1M Settlement Of Canceled Music Festival

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals denied an insurer’s petition to reconsider its reversal of a lower federal court’s summary judgment ruling in its favor in the insured’s lawsuit seeking coverage for an underlying $1 million class action settlement arising from the insured’s refusal to refund ticket sales for the South by Southwest festival that was canceled due to the COVID-19 pandemic, refusing to disturb its finding that the policy’s contract and professional services exclusions do not bar coverage.
May 20, 2024
Massachusetts Panel Affirms Dismissal Of Restaurants’ Coronavirus Coverage Suit

BOSTON — A Massachusetts appellate panel on May 20 affirmed a lower court’s grant of an insurer’s motion to dismiss a coverage lawsuit arising from the coronavirus pandemic, concluding that the restaurant insureds failed to demonstrate that the coronavirus physically altered or affected their insured property in any way.
May 17, 2024
Burger King Franchisee Seeks Summary Judgment In BIPA Violations Coverage Suit

CHICAGO — A franchisee of the Burger King chain moved for summary judgment in its breach of contract lawsuit asking an Illinois federal judge to declare that an excess insurer has a duty to defend it against an underlying putative class lawsuit alleging that it violated the Illinois Biometric Information Protection Act (BIPA).
May 17, 2024
Federal Judge Denies Trustee’s Motion For Final Judgment In D&O Coverage Dispute

NEW ORLEANS — A federal judge in Louisiana on May 16 denied a trustee’s motion to enter final judgment in a directors and officers coverage dispute in light of the U.S. Supreme Court’s recent decision in Smith et al. v. Spizzirri et al., rejecting the trustee’s contention that judicial economy would be best serviced by permitting a prompt appeal of the ownership issues as to all claims.
May 17, 2024
Kansas Commissioner Certifies Service Of Interrogatories In Insurer Liquidation

TOPEKA, Kan. — The Kansas insurance commissioner, as liquidator of an insolvent medical malpractice insurer, certified that she served her first set of interrogatories in the insurer’s liquidation proceedings.
May 16, 2024
Insurer Owes No Coverage For 3rd Suit Brought By Police Officer, Panel Affirms

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on May 15 affirmed a lower federal court’s ruling that an insurer has no duty to defend or indemnify its city insured against a third retaliatory lawsuit brought by a police officer, finding that the underlying action is related to two earlier lawsuits that were filed before coverage began under the policy.
May 16, 2024
Panel Amends Opinion After Insureds Seek Clarification In COVID-19 Coverage Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 15 filed an amended memorandum indicating that its reversal of a lower federal court’s denial of leave to amend a claim under an insurance policy’s Crisis Event provision applied to two sets of insureds in a coronavirus coverage dispute.
May 15, 2024
New Jersey High Court: Electric Scooter Rider Not Pedestrian, No PIP Benefits Owed

TRENTON, N.J. — A unanimous New Jersey Supreme Court on May 14 held that a low-speed electric scooter rider does not fall under the definition of “pedestrian” under the state’s No-Fault Act and that an appellant is not entitled to personal injury protection (PIP) benefits, affirming an appeals court’s ruling as modified in favor of a personal automobile insurer.