Mealey's Emerging Insurance Disputes

  • March 19, 2024

    7th Circuit: Auto Exclusion Bars Coverage For Negligence Suit Arising From Accident

    CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurer, finding that the auto exclusion in the insured’s errors and omissions and commercial general liability insurance policies barred coverage for an underlying negligence lawsuit arising from an accident and that the operation exception to the exclusion in the CGL policy does not apply.

  • March 18, 2024

    4th Circuit Stands By Ruling That Insurer Can Rescind Professional Liability Policy

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on March 15 refused to reconsider its affirmation of a lower federal court’s summary judgment ruling in favor of a professional liability insurer in its lawsuit seeking a declaratory judgment that it can rescind an insurance policy issued to a clinic, standing by its finding that there is no genuine dispute of material fact that the clinic’s founder made a material misstatement in her applications for coverage.

  • March 18, 2024

    Specific-Entity Exclusion Bars Coverage For SEC Suit, 6th Circuit Affirms

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on March 15 held that an insurance policy’s specific-entity exclusion unambiguously bars coverage for an underlying investigation and enforcement action brough against the insured by the U.S. Securities and Exchange Commission, rejecting the insured’s argument that the policy is ambiguous.

  • March 18, 2024

    Panel Refuses To Disturb No Coverage Ruling In Suit Arising From Opioid Epidemic

    SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals unanimously voted to deny a prescription drug distributor insured’s petition seeking rehearing of the panel’s Jan. 26 ruling that there is no coverage owed for lawsuits prompted by the opioid epidemic because the underlying claims “describe exclusively deliberate conduct.”

  • March 18, 2024

    GM, OnStar, Lexis Sued For Collecting, Sharing Drivers’ Data

    WEST PALM BEACH, Fla. — A Florida man, who claims that his driving data was collected and shared without his knowledge or consent brings putative class claims under the Fair Credit Reporting Act (FCRA), as well as Florida consumer and privacy law, asserting that the inaccurate information negatively impacted his ability to obtain car insurance.

  • March 13, 2024

    BSA Claimant Not Bound By Insurance Equity Injunction, Bankruptcy Judge Rules

    WILMINGTON, Del. — A Delaware federal bankruptcy judge concluded that a claimant can continue to seek recovery from insurers for an underlying judgment that he obtained against his abuser in his lawsuit against the abuser, the Boys Scouts of America and Heart of America Council (HOAC), finding that the claimant is not bound by the Insurance Equity Injunction in the Boy Scouts of America’s third modified, fifth amended Chapter 11 reorganization plan that contemplates the creation of a settlement trust to “assume liability for all Abuse Claims.”

  • March 13, 2024

    Former CEO Of Modell’s Appeals Dismissal Of D&O Coverage Dispute

    NEW YORK —The former chief executive officer of the now bankrupt Modell’s Sporting Goods Inc. filed a notice in a New York federal court indicating that he is asking the Second Circuit U.S. Court of Appeals to review the court’s Feb. 8 ruling that granted a directors and officers liability insurer’s motion to dismiss his breach of contract and declaratory judgment lawsuit, challenging the lower court’s finding that the policy does not give him the right to block coverage for the company’s former chief financial officer’s $2.8 million settlement of an underlying adversary proceeding filed by the liquidating trustee.

  • March 13, 2024

    Judge Strikes Expert Testimony, Denies Class Certification In Suit Against GEICO

    CHICAGO — An Illinois federal judge on March 12 granted insurers’ motion to strike the insureds’ expert testimony and denied the insureds’ motion for certification of two classes in their lawsuit alleging that the insurers violated the Illinois Consumer Fraud and Deceptive Business Practices Act by charging “excessive” premiums during the COVID-19 pandemic that failed to account for a dramatic reduction in driving, finding that the insureds failed to establish predominance to warrant class certification.

  • March 12, 2024

    9th Circuit Partly Reverses Ruling In $40M Commercial Crime Coverage Dispute

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 11 reversed a lower federal court’s dismissal of a financial services company insured’s claim for loss under its commercial crime insurance policy’s “Computer And Funds Transfer Fraud Insuring Agreement” and its claim for tortious breach of the implied covenant of good faith and fair dealing, finding that the authorized submission of fraudulent electronic data into the insured’s computer system can arguably be described as “fraudulent entry” to trigger coverage.

  • March 12, 2024

    Infectious Disease Exclusion Bars Coverage For Underlying E. Coli Suit, Judge Says

    ROME, Ga. — No coverage is owed to an insured for an underlying suit seeking damages for E. coli infections contracted at the insured’s fair because the commercial general liability insurer’s infectious disease exclusion clearly bars coverage, a Georgia federal judge said in granting the insurer’s motion for judgment on the pleadings.

  • March 12, 2024

    Insurers Tell N.C. High Court To Apply 27-Year-Old Precedent To Coronavirus Dispute

    RALEIGH, N.C. — Insurers argued to the North Carolina Supreme Court that it should affirm an appeals court’s reversal of a lower court’s grant of partial summary judgment in favor of restaurant insureds in a COVID-19 coverage dispute, responding to the insured’s appellant argument that the phrase “physical loss or physical damage” includes loss of the physical use of property under the state’s “long-standing principles of insurance contract interpretation.”

  • March 12, 2024

    Judge Administratively Closes Suit Against Insurance Agent After Settlement Announced

    HARTFORD, Conn. — The same day parties announced that they reached a settlement “subject to the parties’ negotiation and execution of a mutually acceptable settlement agreement,” a federal judge in Connecticut administratively closed the insurer’s lawsuit alleging that an insurance agent’s failure to include exclusions in an insurance policy resulted in it paying more than $1 million in legal fees and expenses to settle an underlying worker injury lawsuit.

  • March 11, 2024

    English Justice Addresses Broker Disclosure In Light Of Sanctions On Russia

    LONDON — A reinsurance placing broker would not contravene a set of United Kingdom sanctions against Russia by providing certain documents requested under an application for third-party disclosure in a case involving insurance and reinsurance for aircraft and engines leased to Russian entities, an English justice concluded.

  • March 11, 2024

    Majority: Court Erred In Denying Insurer’s Motion To Dismiss COVID-19 Coverage Suit

    RICHMOND, Va. — A majority of the Fourth Circuit U.S. Court of Appeals on March 8 held that a lower federal court erred when it denied an insurer’s motion to dismiss an insured’s coverage lawsuit arising from the coronavirus pandemic, reversing both the lower court’s order denying the insurer’s motion to dismiss and its class certification order and remanding with instructions to dismiss the lawsuit.

  • March 08, 2024

    Judge Rules For CGL Insurer In Coverage Dispute With Medical Product Manufacturer

    CONCORD, N.H. — A federal judge in New Hampshire granted a commercial general liability insurer’s motion for summary judgment in its declaratory judgment lawsuit pertaining to 10 underlying class actions alleging that its insured manufactured and marketed medical devices used to clean positive airway pressure (CPAP) and bi-level positive airway pressure (biPAP) devices that were not safe or effective, finding that the damages alleged in the class actions fail to constitute “damages because of ‘bodily injury’ or ‘property damage’” to trigger coverage.

  • March 08, 2024

    Bump-Up Exclusion Bars D&O Coverage For $90M Settlement, Judge Rules On Remand

    ALEXANDRIA, Va. — On remand from the Fourth Circuit U.S. Court of Appeals, a federal judge in Virginia held that a “bump-up” exclusion unambiguously precludes directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger.

  • March 08, 2024

    Missouri Panel: Forum Selection Clause Binds Parties To Litigate Claims Abroad

    ST. LOUIS — A Missouri appeals panel held that a trust that was created in a bankruptcy proceeding for the benefit of individuals harmed by major producers of opioid pharmaceutical products failed to satisfy its “heavy burden” of demonstrating that the forum selection clause in the debtors’ insurance policies was unfair or unreasonable, affirming a lower court’s grant of the insurers’ motion to dismiss the trust’s coverage lawsuit because the parties are bound to litigate any disputes arising from the contracts in England or Wales.

  • March 08, 2024

    6th Circuit Vacates, Remands CGL Insurer’s Suit Seeking Equitable Contribution

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals vacated a lower federal court’s summary judgment ruling in favor of defendant insurers in a commercial general liability insurer’s lawsuit seeking equitable contribution for the nearly $5 million in costs it paid in defending their mutual insured against an underlying false advertising lawsuit, remanding for further proceedings.

  • March 08, 2024

    2nd Circuit Dismisses Coronavirus Coverage Suit After Appeal Withdrawn

    NEW YORK — Four days after a commercial property insurer and a commercial landlord insured stipulated that the insured’s appeal in a coronavirus coverage suit was withdrawn with prejudice, the Second Circuit U.S. Court of Appeal dismissed the appeal.

  • March 06, 2024

    Washington Judge Partly Grants Insurer’s Motion For Clarification In COVID-19 Suit

    SEATTLE —Partly granting an insurer’s motion for partial clarification or reconsideration of a Jan. 4 order denying the insurer’s motion to dismiss the University of Washington’s lawsuit seeking coverage for losses allegedly incurred by its medical and athletic properties in the wake of the coronavirus pandemic, a Washington judge held that the university has pleaded facts to trigger its medical centers’ policies’ communicable disease decontamination cost endorsements; its coverage claims under the athletic properties’ policies are not dismissed and its claims for coverage are not limited to the medical center policies’ time element losses due to contamination by communicable disease endorsements.

  • March 06, 2024

    English Justice Denies Summary Judgment As To Coverage Issue In COVID-19 Suit

    LONDON — A justice of the High Court of England and Wales denied summary judgment to two restaurant chains on the issue of coverage for their business interruption losses arising from the coronavirus pandemic but granted summary judgment and permission to appeal the policy construction issue.

  • March 06, 2024

    Amicus Curiae Argues In Support Of Drug Distributor In Opioid Coverage Dispute

    SAN FRANCISCO — United Policyholders (UP) filed an amicus curiae brief in support of a prescription drug distributor insured asking the Ninth Circuit U.S. Court of Appeals to reconsider its ruling that there is no coverage owed for lawsuits prompted by the opioid epidemic because the underlying claims “describe exclusively deliberate conduct,” arguing that the ruling “deviates from every other court in the United States that has considered whether the allegations against opioid distributors constitute an ‘occurrence’ or ‘accident’ under the terms of insurance policies like those at issue here.”

  • March 05, 2024

    Illinois Panel: No Coverage Owed For Suit Alleging Willful Acts Against Professor

    MOUNT VERNON, Ill. — An Illinois appeals court on March 4 held that an underlying lawsuit alleging that a university professor insured’s conduct was “willful, intentional, and retaliatory” does not trigger coverage under a personal umbrella liability insurance policy, affirming a lower court’s summary judgment ruling in favor of the insurer in its declaratory judgment lawsuit.

  • March 05, 2024

    Panel: No Coverage Owed For Claims Arising From Warehouse Collapse Caused By Tornado

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on March 4 affirmed a lower federal court’s summary judgment ruling in favor of an insurer in its lawsuit seeking a declaratory judgment that it had no duty to defend or indemnify its insured against underlying wrongful death and personal injury claims arising from a warehouse collapse that was caused by a tornado, finding that there is no coverage because the insured did not own, rent or occupy the warehouse when it collapsed.

  • March 05, 2024

    Liability Insurer Says 10th Circuit Should Affirm Order Barring Coverage In MDL

    DENVER — A liability insurer argued in its answer brief in the 10th Circuit U.S. Court of Appeals that the appellate court should affirm a district court’s ruling that it does not owe a duty to indemnify the appellant health insurer in an underlying multidistrict litigation (MDL) antitrust dispute involving an excess errors and omissions (E&O) policy issued by a now-insolvent insurer.