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

Mealey's Emerging Insurance Disputes

August 04, 2025
Absolute Firearms Exclusion Bars Coverage For Negligence Suit Over Fatal Shooting

GREAT FALLS, Mont. — A federal judge in Montana granted a liquor liability insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an underlying negligence action arising from a fatal shooting at the insured’s bar, concluding that the policy’s Absolute Firearms Exclusion bars coverage.
August 01, 2025
4th Circuit Vacates, Remands Suit Against Insurer Arising From Tree Damage

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on July 31 vacated and remanded a lower federal court’s ruling that granted an insurer’s motion to dismiss an insured’s lawsuit arising from tree damage, finding that the lower court failed to parse the claims alleged solely against the insurer and to determine whether those claims were valid.
August 01, 2025
Florida Panel Reverses Ruling In Broker’s Favor In Hurricane Michael Coverage Suit

TALLAHASSEE, Fla. — A Florida appeals panel reversed a lower court’s summary judgment ruling in favor of an insurance broker in a lawsuit arising from damage to a recreational vehicle (RV) park caused by Hurricane Michael, remanding for further proceedings and declining to address the lower court’s order denying the broker’s motion for attorney fees.
July 30, 2025
Judge Dismisses Master Complaint Against Insurer In Coronavirus Coverage MDL

CHICAGO — The federal judge in Illinois who is overseeing a multidistrict litigation by hospitality industry insureds who sought business interruption protection coverage for their losses arising from the coronavirus pandemic on July 30 granted an insurer’s renewed motion to dismiss a master complaint, finding that decisions in other cases interpreting similar and mostly identical coverage provisions “almost uniformly held that there must be some physical effect or alteration to the insured property, not just a loss of its use.”
July 30, 2025
11th Circuit Reverses In Suit Seeking Policy Rescission Over Misrepresentations

ATLANTA — The 11th Circuit U.S. Court of Appeals on July 29 reversed and remanded a district court order dismissing a general liability insurer’s suit seeking a policy rescission for purported material misrepresentations in a policy renewal application and a declaration that it does not have a duty to defend or indemnify an underlying negligence action related to a parasailing accident, finding that the lower court’s dismissal of the duty to defend claim was an abuse of discretion and that the district court should exercise jurisdiction regarding the rescission claim.
July 30, 2025
Judge Dismisses Professional Negligence Suit Over Water Damage Following Settlement

CHEYENNE, Wyo. — A federal judge in Wyoming on July 29 granted a homeowners insurer, mechanical engineering firm and plumbing company’s stipulated motion to dismiss with prejudice the subrogated insurer’s negligence suit arising from water damage that was allegedly caused by improperly installed plumbing.
July 30, 2025
Illinois Majority: Cyber Event Exclusion Bars Coverage For Fraudulent Wire Transfer

CHICAGO — An Illinois appeals court majority affirmed a lower court’s ruling in favor of an insurer in its declaratory judgment lawsuit disputing coverage for the insureds’ underlying $673,384.18 loss arising from a fraudulent wire transfer, holding that the policy’s cyber event exclusion bars coverage.
July 30, 2025
Judge: Insurers Have Duty To Defend, Indemnify Hotel Against Sex Trafficking Suit

NORFOLK, Va. — A federal judge in Virginia granted an insured’s motion to dismiss its insurers’ lawsuit seeking a declaratory judgment that they have no duty to defend or indemnify against a Jane Doe’s claims that she was trafficked for sex at a hotel that was owned or operated by the insured, ruling that the policy unambiguously covers the conduct alleged in the underlying action.
July 28, 2025
4th Circuit Affirms Ruling In Dispute Over Lender’s Insurance Premiums

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals held that a mortgage lender did not violate the Credit Grantor Closed End Credit Provisions (CLEC) by retaining a portion of the appellant’s insurance premiums as a commission, affirming a lower federal court’s ruling that granted the lender’s motion for judgment on the pleadings.
July 28, 2025
U.S. Tax Court Clarifies, Maintains Ruling In Favor Of IRS In Microcaptive Case

WASHINGTON, D.C. — Stating that “the Court failed to fully clarify two important issues” in a March opinion, a U.S. Tax Court judge issued a supplemental memorandum opinion in a consolidated case maintaining that a purported captive insurance arrangement could not exclude premiums from income during the 2015 and 2016 tax years because it is not considered insurance and that it must recognize $781,977 in income for the 2015 tax year because the provisions allowing deferral of unearned premiums do not apply to entities that are not insurance companies.
July 25, 2025
Delaware High Court Remands No-Action Issue In D&O Coverage Dispute

WILMINGTON, Del. — The Delaware Supreme Court affirmed a lower court’s grant of insurers’ motions to dismiss a company and its CEOs’ lawsuit seeking directors and officers liability coverage under 2023 policies for an underlying lawsuit alleging that they undersold the value of investors’ shares in the company and its parent company but remanded for further consideration of issues related to the “No Action” clause under the 2021 insurance policies.
July 25, 2025
5th Circuit Affirms Ruling For IRS In Tax Row Over Purported Microcaptives

NEW ORLEANS — Upholding a ruling for the U.S. Internal Revenue Service in a federal tax dispute over purported microcaptive insurance arrangements, the Fifth Circuit U.S. Court of Appeals interpreted part of the Internal Revenue Code “to determine when supervisory approval was required, an issue of first impression in this circuit.”
July 25, 2025
New York Justice Partly Grants Insured’s Request To Review Discovery Order

NEW YORK — A New York justice granted in part a commodities investment manager insured’s request for review and clarification of a judicial hearing officer’s ruling regarding document discovery in an excess professional liability coverage dispute arising from underlying claims that the insured conspired to commit fraud.
July 24, 2025
Vendor Dismisses Insurer From Breach Of Contract Claim; 1 Defendant Remains

NEW YORK — The plaintiffs in dispute involving reinsurance and a warehouse in Afghanistan filed a notice of voluntary dismissal in a federal court in New York, dismissing its breach of contract claim against an insurer; the dismissal is without prejudice with each party to bear their own attorney fees and costs.
July 23, 2025
Insurer, Engineer File Verbal Notice Of Settlement Of Professional Negligence Suit

CHEYENNE, Wyo. — A homeowners insurer and a mechanical engineering firm indicated to a federal court in Wyoming that they have reached a settlement of the insurer’s negligence lawsuit arising from water damage that was allegedly caused by improperly installed plumbing.
July 22, 2025
Insurer: No Coverage Owed For Injuries Caused By Intentional Shooting Rampage

RALEIGH, N.C. — A homeowners insurer filed suit in a North Carolina federal court seeking a declaratory judgment that it has no duty to defend and indemnify against an underlying lawsuit alleging that an unemancipated minor went on a shooting rampage that killed several people in a Raleigh neighborhood, contending that the underlying injuries were caused by intentional acts and not by an “occurrence” pursuant to the policy.
July 22, 2025
Insurer Appeals Ruling In D&O Coverage Dispute Over Unfair Dilution Claims

SAN DIEGO — A business and management indemnity insurer on July 21 filed a notice of appeal of a California federal court’s holding that it has a duty to defend and indemnify its insured against an underlying unfair dilution lawsuit because the “dilution claims exception” to the “insured vs. insured” exclusion restores directors and officers liability coverage.
July 22, 2025
Insurer: Exclusion Bars Coverage For Blake Lively’s Suit Against Justin Baldoni

NEW YORK — A management liability insurer filed suit in a New York federal court on July 21 seeking a declaration that it has no duty to provide coverage for Blake Lively’s sexual harassment, hostile work environment and retaliation action against Justin Baldoni, Wayfarer Studios LLC, It Ends With Us Movie LLC and its movie studio officers, asserting that the policy’s prior knowledge exclusion bars coverage.
July 22, 2025
Michigan High Court Refuses To Disturb No Coverage Ruling For Personal Injury Suit

LANSING, Mich. — The Michigan Supreme Court denied an invitation to review an appeals court’s ruling that affirmed a lower court’s holding that a homeowners insurance policy’s intentional acts exclusion bars coverage for an underlying personal injury lawsuit, saying it is not persuaded that the questions presented should be reviewed by the state’s highest court.
July 22, 2025
Doctor Insured: Hidden Cameras Constitute Physical Alteration, Loss Of Use

NEW YORK — A doctor argues to the Second Circuit U.S. Court of Appeals that a lower federal court erred in dismissing her breach of contract lawsuit seeking business interruption and umbrella coverage for her losses arising from discovery of hidden cameras at her dermatology office, asserting that the hidden cameras constituted a physical alteration and loss of use and satisfied her insurance policy’s direct physical loss or damage requirement.
July 22, 2025
No Coverage Owed For Damaged AC Units Because Hotel Was Vacant, Panel Affirms

CHICAGO — The Seventh Circuit U.S. Court of Appeals determined that a lower federal court’s discovery sanctions against a hotel owner insured were “an appropriate, proportionate response” to the insured’s failure to produce requested documents as to the hotel’s occupancy and not an abuse of discretion, affirming a lower court’s ruling that there was no coverage owed for the hotel’s damaged air conditioner units because the hotel was vacant at the time of the vandalism and the insurer did not act in bad faith.
July 21, 2025
2nd Circuit Reverses Ruling In Free Speech Suit Arising From Insurance Program

NEW YORK — On remand from the U.S. Supreme Court, the Second Circuit U.S. Court of Appeals held that a former superintendent of the New York department that regulates insurance is entitled to qualified immunity on the National Rifle Association of America’s (NRA) First Amendment coercion and retaliation claims against New York state officials and the department “because of the markedly attenuated link between facially valid law enforcement against a third-party associate and an infringement of a plaintiff's First Amendment rights” and reversed a lower federal court’s order denying the former superintendent and the department’s motion to dismiss the NRA’s suit alleging that she unconstitutionally threatened or coerced an insurer or other entities to stifle its speech.
July 21, 2025
Judge: Assault & Battery Exclusion Bars Coverage For Suit Over House Cleaner’s Death

GALVESTON, Texas — A Texas federal judge granted a commercial general liability insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify its insured for an underlying negligence lawsuit brought against its contractor insured, finding that coverage is barred because the underlying claims arise from an assault and battery, which resulted in the death of a house cleaner.
July 18, 2025
Panel: Insurer Has No Duty To Indemnify $58.5M Judgment Over Mishandled Bodies

PASEDENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that a commercial insurer has no duty to indemnify a convicted felon for a $58.5 million underlying state court judgment for his mishandling of donated bodies, finding that the appellants are collaterally estopped from relitigating the issue of the felon’s relationship with the insured company.
July 17, 2025
Panel Affirms Dismissal Of Assignee’s Coverage Suit Arising From Infant’s Death

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of insurers’ motion to dismiss an insured’s assignee’s breach of contract lawsuit seeking $300,000 in coverage for an underlying wrongful death settlement arising from the drowning death of his infant son, finding that the assignee failed to sufficiently assert that he incurred a “bodily injury” that might otherwise entitle him to coverage under the homeowners insurance policy.