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

Mealey's Emerging Insurance Disputes

January 08, 2026
Prompted By Contractor’s Motion, 5th Circuit Dismisses Appeal In CGL Coverage Suit

NEW ORLEANS — One day after a contractor insured filed an unopposed motion to dismiss its appeal of a Texas federal court’s opinion that a commercial general liability insurer has no duty to defend or indemnify for an underlying negligence lawsuit arising from the death of a house cleaner, the Fifth Circuit U.S. Court of Appeals dismissed the appeal.
January 08, 2026
No Coverage Owed For $10M Invasion Of Privacy Verdict, 11th Circuit Affirms

ATLANTA — The 11th Circuit U.S. Court of Appeals on Jan. 7 held that a 58-month delay in notifying an umbrella insurer of underlying conduct that could have triggered coverage was untimely as a matter law, affirming a lower federal court’s grant of summary judgment in favor of the insurer in a direct action lawsuit seeking recovery of a $10 million judgment in an underlying invasion of privacy action.
January 08, 2026
Following Mediation, Parties Reach Impasse In Data Breach Coverage Dispute

ORLANDO, Fla. — A Florida federal court reported in a Jan. 7 docket note that an insured and its cyber and data risk insurer reached an impasse following mediation of the insured’s breach of contract and declaratory judgment lawsuit arising from a 2024 data breach that caused interruption to its financial technology business.
January 08, 2026
Illinois Panel Affirms Ruling In Favor Of Insurer, Agent In Negligence Suit

SPRINGFIELD, Ill. — An Illinois appeals panel affirmed a lower court’s grant of summary judgment in favor of a homeowners insurer and its agent, holding that the agent did not owe a duty to procure coverage for water damage to the vacant property that the insured never specifically requested and, as a result, the insured’s negligence claim against the agent and respondeat superior claim against his employer fail.
January 08, 2026
Kentucky High Court: No Coverage Owed For Suit Arising From Wrongful Prosecution

FRANKFORT, Ky. — The Kentucky Supreme Court affirmed an appeals court’s ruling that affirmed a lower court’s ruling in favor of an insurer in a coverage dispute arising from an underlying lawsuit alleging personal injuries from a wrongful prosecution, holding that, for insurance purposes, the personal injury occurred more than a decade before the onset of the coverage period.
January 07, 2026
COMMENTARY: 2025 Key Insurance Decisions, Trends, & Developments & A Look Ahead To 2026

By Scott M. Seaman, Pedro E. Hernandez and Jordan W.P. Evans
January 08, 2026
Judge Refuses To Dismiss Insurer’s Suit Arising From Injury At Cryotherapy Facility

LOS ANGELES — A federal judge in California refused to dismiss an insurer’s lawsuit seeking a declaratory judgment that its business owners liability insurance policy’s professional services exclusion bars coverage for a patient’s underlying action alleging that she was injured at a cryotherapy facility while receiving medical treatment from the insured, also denying the insured’s motion to dismiss the insurer’s claim seeking reimbursement of the $275,000 it paid to settle the underlying action on its insured’s behalf.
January 08, 2026
California FAIR Plan Sued Over Alleged Unlawful Wildfire Smoke Claim Denials

LOS ANGELES — A pair of property insurance policyholders sued the California FAIR Plan Association in state court alleging that the state’s “insurer of last resort”engaged in bad faith insurance practices and breach of contract by relying on unlawful policy provisions to deny or underpay wildfire smoke contamination and loss-of-use claims arising from the January 2025 Los Angeles wildfires, in violation of California insurance law.
January 07, 2026
Judge Denies Insured’s Motion To Stay Coverage Suit Pending Ruling On MDL Claims

JOHNSTOWN, Pa. — A federal judge in Pennsylvania on Jan. 6 denied an insured’s motion to temporarily stay its breach of contract and declaratory judgment lawsuit seeking coverage for an underlying multidistrict litigation over allegations that it violated the Computer Fraud and Abuse Act, the Stored Communications Act, the Michigan Identity Theft Protection Act and Ohio data security laws, holding that the issues of coverage are not relevant to and will not be resolved by the MDL.
January 07, 2026
Insurer Disputes Coverage For Suit Seeking Damages For Minor’s Video Game Addiction

JONESBORO, Ark. — An insurer filed suit in an Arkansas federal court seeking a declaratory judgment that it has no duty to defend or indemnify its insured against an underlying lawsuit seeking damages for video game addiction and/or internet gaming disorder that was allegedly suffered by a minor.
January 06, 2026
Florida Panel Reverses For New Trial On Damages In Suit Against Insurance Broker

DAYTON BEACH, Fla. —Noting that the case was one of first impression, the Fifth District Florida Court of Appeal concluded that a lower court erred by allowing a jury to calculate damages against an insurance broker based on an insurance policy that an earlier panel determined does not provide coverage for restaurant insureds’ damage following Hurricane Matthew, reversing in part and remanding for a retrial limited solely to damages without reliance on the insurance policy.
January 06, 2026
Panel Affirms Rulings In Favor Of Insurer In Suit Arising From Casino Altercation

TRENTON, N.J. — A New Jersey appeals panel affirmed a lower court’s rulings in favor of a homeowners insurer in a coverage dispute arising from a physical altercation at an Atlantic City casino, finding no error in the lower court’s conflict-of-law analysis and application of New York law in interpreting the homeowners insurance policy at issue.
January 06, 2026
9th Circuit Vacates, Remands Summary Judgment Ruling In Favor Of D&O Insurer

LAS VEGAS — The Ninth Circuit U.S. Court of Appeals vacated and remanded a lower federal court’s summary judgment ruling in favor of a directors and officers liability insurer in a coverage dispute over underlying claims for breach of contract, fraud and quantum meruit brought against an insured, holding that the lower court erred in determining that a policy exclusion barred coverage.
January 05, 2026
Judge Declines To Exercise Jurisdiction In Coverage Suit Over City’s Stormwater Fees

DETROIT — A federal judge in Michigan granted Ann Arbor’s motion to dismiss its insurer’s declaratory judgment lawsuit disputing coverage for an underlying action challenging the constitutionality of the city’s stormwater fees, noting that state courts have “already invested substantial judicial resources in addressing this matter and allowing them to proceed without federal interference promotes comity, avoids duplicative litigation, and reduces the risk of inconsistent outcomes.”
December 23, 2025
Shepard’s Analysis Of U.S. Supreme Court Bankruptcy Standing Ruling

As of Dec. 19, 52 federal court decisions have referenced the U.S. Supreme Court’s 2024 holding in an asbestos bankruptcy case that an insurer with financial responsibility for bankruptcy claims qualifies as a party in interest with standing to comment on a debtor’s plan of reorganization, rejecting the “insurance neutrality” doctrine that had barred such participation, according to a Shepard’s analysis of the high court’s opinion.
December 12, 2025
2nd Circuit: Insurers Have No Duty To Defend, Indemnify ‘Ghost Guns’ Suits

NEW YORK — The Second Circuit U.S. Court of Appeals affirmed a lower federal court’s judgment in favor of insurers in their lawsuit disputing coverage for underlying actions arising from their firearm manufacturer insured’s alleged sales of “ghost gun” parts and kits brought by New York state and two cities against their firearm manufacturer insured, holding that the underlying claims fail to allege an “accident” to trigger coverage.
December 11, 2025
Judge: Insurer Has Duty To Defend Cosmetics Company Against Consumer Fraud Suits

LOS ANGELES — A federal judge in California held that a commercial general liability insurer has a duty to defend its cosmetic company insured against three underlying putative class action lawsuits alleging that the insured deceptively sold beauty products by failing to disclose the dangerous risks and side effects of lash enhancement serums’ “key ingredient,” further concluding that the policy’s unfair competition exclusion does not bar coverage.
December 11, 2025
Insurers Say No Coverage Owed For Suit Arising From Hyperbaric Chamber Death

FLINT, Mich. — Insurers ask a federal court in Michigan to declare that they have no duty to defend or indemnify their insured and its employees against an underlying negligence lawsuit arising from the death of a minor who was receiving hyperbaric oxygen therapy treatment at the insured’s facility.
December 11, 2025
Hard Rock Hotel Collapse Coverage Dispute Dismissed After Settlement Reached

NEW ORLEANS — A federal judge in Louisiana issued an order dismissing a property owner’s breach of contract lawsuit against builders risk insurers seeking additional insured coverage for its $89,877,694 in losses arising from the aftermath of the partial collapse of a Hard Rock Hotel project in New Orleans after being informed the parties reached a settlement.
December 10, 2025
Majority Reverses No Coverage Ruling In Suit Arising From Spinal Cord Injury

NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel majority on Dec. 9 reversed a lower federal court’s order that granted a homeowners insurer’s motion for judgment as a matter of law in its declaratory judgment lawsuit arising from a spinal cord injury that occurred at its insureds’ home, ruling there was a legally sufficient evidentiary basis for a jury to determine that the spinal injury did not arise out of the use of a controlled substance and, therefore, the policy’s controlled substance exclusion does not bar coverage.
December 10, 2025
Judge Rules In Favor Of D&O Insurer In Dispute Over $7.5M Fraudulent Wire Transfer

GREENBELT, Md. — A federal judge in Maryland granted summary judgment in favor of a directors and officers liability insurer in a nonprofit insured’s breach of contract and declaratory judgment lawsuit seeking coverage for $7.5 million in wire transfers that were coerced by fraud, ruling that there was no extended reporting period active when the insured submitted the claim.
December 10, 2025
No Coverage Owed For Sexual Assault Suit, New Hampshire Supreme Court Affirms

CONCORD, N.H. —The New Hampshire Supreme Court affirmed a lower court’s summary judgment ruling in favor of a homeowners insurer in an assignee’s negligence and breach of contract lawsuit arising from an underlying sexual assault action brought against the insured, ruling the assignee has failed to establish that there is any genuine dispute of material fact or that she is entitled to judgment as a matter of law.
December 09, 2025
Panel Affirms Ruling In Insurers’ Favor In Bad Faith Suit Over Factory Work Death

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Dec. 8 affirmed a lower court’s ruling in favor of insurers in a plastics manufacturer’s breach of contract and bad faith lawsuit seeking indemnification for the settlement of an underlying lawsuit brought by the family of the insured’s factory employee who was killed on the job, holding that the policies bar coverage for the underlying claim that the insured violated Ohio’s employer intentional tort statute.
December 09, 2025
Liability Provisions In FAIR Plan Order Exceeded Statutory Limits, Panel Rules

LOS ANGELES — A California appellate panel ruled that the state’s insurance commissioner lacked statutory authority to require the California FAIR Plan Association to offer liability coverages, holding that state law limits the FAIR Plan to first-party property risks, and directed the lower court to vacate its prior denial of the FAIR Plan Association’s writ of mandate and enter a new order granting the petition.