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Mealey's Emerging Insurance Disputes

  • April 01, 2026

    Claim Preclusion Inapplicable In Indemnification Suit Over $20M BIPA Settlement

    CHICAGO — A federal judge in Illinois held that claim preclusion does not apply to a lawsuit seeking indemnification from an insurer for an underlying $20 million settlement arising from a class action lawsuit alleging the insured violated the Illinois Biometric Information Privacy Act (BIPA), further finding that although the policy’s access or disclosure exclusion applies to the underlying class action, there are genuine disputes of material facts as to the plaintiffs’ mend-the-hold and waiver arguments that may prevent the insurer from raising the exclusion.

  • April 01, 2026

    Insurer Seeks Default Judgment Against Boat Crew Member In Policy Rescission Suit

    KEY WEST, Fla. — One day after a Florida federal judge issued an order regarding the procedure to file for default final judgment, a general liability insurer on March 31 filed a motion for default final judgment against a boat crew member in the insurer’s suit seeking a policy rescission for alleged material misrepresentations in a policy renewal application and a declaration that it does not have a duty to defend or indemnify in an underlying negligence action related to a parasailing accident.

  • April 01, 2026

    Judge: No Personal & Advertising Injury Coverage Owed For Trademark Infringement Suit

    CHICAGO — A federal judge in Illinois granted a commercial general liability insurer’s motion for summary judgment in an insured’s lawsuit seeking personal and advertising injury coverage for an underlying action alleging the insured unlawfully used another company’s trademark in its online advertising, holding that the underlying claims fail to establish an offense that falls under policy coverage and that an intellectual property exclusion further bars coverage.

  • April 01, 2026

    No Indemnification Owed For $2M Settlement Of Labor Lawsuit Arising From Injury

    NEW YORK — A New York justice denied a subcontractor and its insurer’s motion for a declaration that a debris removal company’s insurer has a duty to indemnify and reimburse them for a $2 million settlement of an underlying labor law action arising from a worker injury, holding that the subcontractor’s own negligence is a condition that is expressly excluded from additional insured coverage.

  • April 01, 2026

    California Jury Finds ‘House Of Cards’ Producers Failed To Show Loss Under Policy

    SANTA MONICA, Calif. — A California jury reached a special verdict on a breach of contract claim brought against an insurer by the producers of the Netflix show “House of Cards,” finding that the producers failed to prove that they incurred a loss by spending more than they originally budgeted for the show because actor Kevin Spacey was rendered unable to complete his performance on the show due to “sickness.”

  • March 31, 2026

    Federal Judge Refuses To Toss Insurer’s Lawsuit Arising From Minor’s Drowning Death

    ELKINS, W. Va. — A federal judge in West Virginia on March 30 refused to dismiss an insurer’s declaratory judgment lawsuit disputing coverage for an underlying lawsuit arising from a 2-year-old’s drowning death that occurred during a day care’s field trip, holding that there is sufficient evidence in the record to support the court’s subject matter jurisdiction and declining to exercise its discretion to abstain from hearing the lawsuit.

  • March 30, 2026

    Microcaptive Structure Declared Noneconomic; Underpayment Penalties Upheld

    WASHINGTON, D.C. — Applying a recently established framework governing the economic substance doctrine and disclosure requirements in microcaptive insurance cases, a U.S. Tax Court judge held that a purported captive arrangement failed both prongs of the economic substance test and sustained a 40% accuracy-related penalty for a nondisclosed noneconomic substance transaction.

  • March 30, 2026

    Molestation, Discrimination, Pollution Exclusions Bar Coverage For Assault Suit

    MIAMI — A Florida federal judge granted a commercial general liability insurer’s motion for final default judgment against an insured based on the insured’s failure to respond to the insurer’s complaint and on the finding that the policy’s abuse or molestation exclusion, discrimination exclusion and pollution exclusion apply as bars to coverage for an underlying suit stemming from a verbal and physical altercation involving the insured’s employee.

  • March 27, 2026

    Texas Panel Says Trial Court Properly Found Insurer Did Not Act In Bad Faith

    AUSTIN, Texas — A trial court properly granted summary judgment in favor of an insurer on claims alleging that the insurer violated the Texas Insurance Code by denying the insured’s theft claim in bad faith because the insurer met its burden of showing that a reasonable coverage dispute existed; however, the trial court improperly granted the insurer’s motion on the insured’s breach of contract claim because the value of the insured’s stolen items was not an essential element of the breach of contract claim, the Third District Texas Court of Appeals said March 26.

  • March 27, 2026

    No Professional Liability Coverage Owed For Trade Secrets Suit Against Attorney

    AUGUSTA, Ga. — A federal judge in Georgia held that a lawyers’ professional liability insurer has no duty to defend or indemnify its attorney insured in an underlying trade secrets lawsuit, saying the underlying action contains claims that are, at most, incidental to the insured’s performance of legal services and do not arise from any acts the insured took in rendering professional services.

  • March 27, 2026

    Reinsurer Moves To Dismiss Coverage Suit Tied To Underlying Abuse Case

    NEW HAVEN, Conn. — A reinsurer moved in Connecticut federal court to dismiss a declaratory judgment action brought by a municipal risk pool operator seeking coverage for claims arising from an underlying lawsuit alleging sexual abuse by a school employee and negligent supervision by a board of education, arguing that the dispute is premature and nonjusticiable because any indemnity obligation depends on unresolved liability and contingent future payments.

  • March 27, 2026

    Homeowners Sue California FAIR Plan Association Over Wildfire Claim Handling

    LOS ANGELES — Joining a wave of lawsuits alleging that the California FAIR Plan Association (CFPA) improperly processes wildfire-related property insurance claims related to the 2025 Eaton and Palisades wildfires, two individuals who own a residential property filed a complaint in a California state court alleging that CFPA underpaid and mishandled their claim through unlawful claims practices.

  • March 26, 2026

    Insurer Owes No D&O Coverage For Antitrust Suit Against Pharmaceutical Company

    GREENBELT, Md. — A federal judge in Maryland granted a directors and officers liability insurer’s motion to dismiss a pharmaceutical company insured’s breach of contract and bad faith lawsuit seeking a declaration as to coverage for an underlying antitrust action arising from the insured’s acquisition of the rights to distribute a prescription medication used to treat mobility issues in people with advanced Parkinson's disease, holding that the insured has failed to plead that the underlying allegations are "Securities Claims" within the meaning of the D&O insurance policy.

  • March 26, 2026

    Insurer Not Allowed To Intervene In 26 Sex Trafficking Suits Against Hotel Insureds

    COLUMBUS, Ohio — A federal judge in Ohio denied a commercial insurer’s motion to intervene in 26 sex trafficking lawsuits brought against its hotel owner insureds, holding that the insurer has failed to establish its right to intervene because it has not shown that it has a substantial legal interest in the subject matter of the sex trafficking actions, that any of its alleged legal interests would be impaired absent the intervention and that its interests would not be properly represented by the existing parties.

  • March 25, 2026

    2nd Circuit Stands By Ruling That Exclusion Bars Professional Liability Coverage

    NEW YORK — The Second Circuit U.S. Court of Appeals on March 24 refused to reconsider its holding that a professional liability insurance policy’s fee exclusion bars coverage for a financial services company insured’s liability in two underlying class actions alleging that certain mortgage loan fees were unlawful and that the insured was derivatively liable under the Home Ownership and Equity Protection Act.

  • March 25, 2026

    Insurer Urges High Court To Resolve Circuit Split Over Data Breach Standing

    WASHINGTON, D.C. — Writing that the lower courts “have yet to settle on a consistent standard” for Article III standing in data breach cases, an insurance group and its subsidiaries petitioned the U.S. Supreme Court for a writ of certiorari, arguing that the Fourth Circuit U.S. Court of Appeals improperly expanded standing in a data breach class action by allowing a pair of plaintiffs to proceed based on the alleged disclosure of nonsensitive personal information by a third-party hacker, creating circuit splits and warranting review.

  • March 24, 2026

    Judge Grants In Part Insured’s Motion To Compel In Cyber Crime Coverage Suit

    DALLAS — A federal judge in Dallas granted in part an insured’s motion to compel an insurer to provide deposition testimony, answer interrogatories and produce “privileged” documents in a coverage dispute arising from a criminal cyberattack, concluding that the insured has established a possibility that testimony as to underwriting may be relevant to a claim or defense and the insurer has failed to demonstrate that the documents it withheld satisfy the elements of attorney-client privilege or are entitled to work product protection.

  • March 19, 2026

    COMMENTARY: America 250: A History Of Insurance & Insurance Coverage Law & Litigation In The United States, Part 2

    By Scott M. Seaman, Pedro E. Hernandez and Peter J. Lewis  

  • March 23, 2026

    Judge Rules For Hotels In Coverage Dispute Arising From 11 Human Trafficking Suits

    COLUMBUS, Ohio — A federal judge in Ohio granted insured hotel companies’ motion for partial judgment on the pleadings and denied their general liability insurer’s cross-motion for partial judgment on the pleadings in the insureds’ breach of contract and bad faith lawsuit alleging that the insurer arbitrarily and capriciously denied coverage for 11 underlying lawsuits alleging that human trafficking occurred at various Red Roof hotels, holding that the underlying lawsuits constitute an "occurrence” under the policy and that the doctrine of inferred intent and Ohio's public policy do not preclude coverage.

  • March 23, 2026

    Judge Dismisses Potbelly’s Suit Against Employment Practices Liability Insurer

    SEATTLE — A federal judge in Washington granted an employment practices liability insurer’s motion to dismiss with prejudice a breach of contract lawsuit brought by the owner and operator of several Potbelly Sandwich Shops in Washington state seeking a declaratory judgment that the insurer has a duty to defend and indemnify it against an underlying putative class alleging that it violated the Washington Equal Pay and Opportunities Act by not providing wage and salary information to job applicants in Washington, concluding that the underlying action does not assert that Potbelly engaged in discrimination to trigger coverage under the policy.

  • March 23, 2026

    Judge: ‘Unique,’ ‘Compelling Circumstances’ Warrant Action In 20-Year-Plus MDL

    NEW YORK — In a multidistrict litigation that has spanned more than 20 years, a federal judge in New York adopted a magistrate’s report recommending that the court deny without prejudice the plaintiffs’ outstanding requests for additional damages in their lawsuit alleging that Iran is a state sponsor of terrorism that provided material support to Al Qaeda for the Sept. 11, 2001, terrorist attacks; certify all of the default judgments against Iran as final judgments nunc pro tunc to their filing date; and immediately process the requests to certify the judgments against Iran for registration in another New York district court where the U.S. government has recently seized more than $11 billion in Bitcoin and related proceeds that are allegedly assets of the Islamic Republic of Iran.

  • March 20, 2026

    Insured, Directors And Officers Appeal Denial Of Professional Liability Coverage

    ROME, Ga. — An insured and its directors and officers filed a notice indicating that they are asking the 11th Circuit U.S. Court of Appeals to review a Georgia federal court’s grant of a professional liability insurer’s motion to dismiss their breach of contract and bad faith lawsuit seeking coverage for an underlying action alleging self-dealing and theft of confidential and proprietary software technology, challenging the lower court’s holding that their underlying business dispute with their former employer did not fall under the policy’s coverage for “professional services” that was “performed for others.”

  • March 20, 2026

    Colorado Panel Refuses To Apply Complete Defense Rule To Title Insurance Dispute

    DENVER — Noting that whether the complete defense rule applies in the context of title insurance is a matter of first impression in Colorado, a Colorado appeals panel on March 19 affirmed a lower court’s ruling that a title insurer has no duty to defend a trust under either the complete defense rule or the insurance policy against an underlying trespass and unjust enrichment lawsuit brought by a neighbor.

  • March 20, 2026

    No Homeowners Coverage Owed For Intentional Fence Suit, Wisconsin Panel Affirms

    MILWAULKEE — A Wisconsin appeals panel affirmed a lower court’s declaratory judgment that a homeowners insurer has no duty to defend or indemnify its insured against allegations that he intentionally erected a fence between his and his neighbors’ properties to harm them, holding that there is no occurrence alleged under the policy because the insured’s alleged conduct is intentional and not accidental.

  • March 18, 2026

    Judge Refuses To Dismiss Restaurants’ Amended Complaint In Coronavirus Coverage Suit

    DURHAM, N.C. — Three months after granting a commercial property insurer’s motion to dismiss claims for breach of the implied covenant of good faith and fair dealing and unfair and deceptive trade practices brought by four Durham restaurants seeking coverage for their business interruption losses arising from the lockdowns prompted by the COVID-19 pandemic, a federal judge in North Carolina denied the insurer’s motion to dismiss the insureds’ amended complaint because it now includes facts that make the claims plausible to the extent that they are based on the insurer’s conduct since the North Carolina Supreme Court’s ruling in N. State Deli, LLC v. Cincinnati Ins. Co.