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Mealey's Emerging Insurance Disputes

  • July 11, 2019

    Insured Fails To Show Claims Constitute Disparagement, Defamation, 3rd Circuit Says

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on July 10 affirmed a lower federal court’s finding that an insurer has no duty to defend its insured against an underlying lawsuit alleging false advertising and unfair competition because the insured failed to establish that the underlying claims constitute disparagement or defamation to trigger coverage (Albion Engineering Company v. Hartford Fire Insurance Company, No. 18-1756, 3rd Cir., 2019 U.S. App. LEXIS 20488).

  • July 9, 2019

    School Leaders Errors And Omission Liability Coverage Barred, 6th Circuit Affirms

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on July 3 affirmed a lower federal court’s ruling that primary and umbrella insurers do not owe “School Leaders Errors & Omission Liability Coverage" for an underlying $4,199,812 judgment in favor of a school district in its negligence lawsuit against its former superintendent (Cuyahoga Heights Local School District v. Netherlands Insurance Company, et al., No. 18-4037, 6th Cir., 2019 U.S. App. LEXIS 19900).

  • July 9, 2019

    Specific Litigation Exclusion Bars Coverage For Brokers’ Claims, 1st Circuit Affirms

    BOSTON — The First Circuit U.S. Court of Appeals on July 3 affirmed a lower federal court’s ruling that an insurance policy’s specific litigation exclusion barred all coverage claims brought by two broker-dealers because the claims overlapped with previous cases filed against them (UBS Financial Services, Inc. of Puerto Rico, et al. v. XL Specialty Insurance Co., et al., No. 18-1148, 1st Cir., 2019 U.S. App. LEXIS 19946).

  • July 8, 2019

    Panel Certifies Question On Insurer’s Right To Reimbursement To Nevada High Court

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on July 2 affirmed a lower federal court’s ruling that an insurer has no duty to defend its insureds but reserved its judgment as to whether the insurer is entitled to reimbursement of the funds it already spent on its insureds' defense, certifying this question to the Nevada Supreme Court (Nautilus Insurance Co. v. Access Medical LLC, et al., Nos. 17-16265, 17-16272 and 17-16273, 9th Cir., 2019 U.S. App. LEXIS 19777).

  • July 3, 2019

    Outside Business Exclusion Does Not Bar Coverage, Law Firm Insured Tells 3rd Circuit

    PHILADELPHIA — A law firm insured recently asked the Third Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that a professional liability insurance policy's outside business exclusion precludes coverage for underlying claims against a law firm insured and one of its attorneys (Westport Insurance Corporation v. Hippo Fleming & Pertile Law Offices, et al., No. 18-3551, 3rd Cir.).

  • July 3, 2019

    Au Pair Sponsor Asks Panel To Apply Notice-Prejudice Rule To Coverage Dispute

    PASADENA, Calif. — A federally authorized au pair program sponsor recently asked the Ninth Circuit U.S. Court of Appeals to find that California law requires a not-for-profit entity and directors, officers liability insurer to prove that it was prejudiced by the insured’s alleged untimely reporting of an underlying lawsuit brought under the Sherman Act (EurAuPair International, Inc. v. Ironshore Specialty Insurance Company, No.18-55933, 9th Cir.).

  • July 3, 2019

    Insurer Has No Duty To Defend Against Trademark Infringement Claim, Panel Affirms

    BOSTON — The First Circuit U.S. Court of Appeals on July 2 affirmed a lower federal court’s ruling that a commercial general liability insurance policy’s intellectual property (IP) exclusion bars coverage for underlying trademark infringement claims against a dental product manufacturer insured (Sterngold Dental, LLC v. HDI Global Insurance Company, No. 18-2084, 1st Cir., 2019 U.S. App. LEXIS 19781).

  • July 2, 2019

    Judge: Excess Professional Liability Insurer Not Entitled To Prejudgment Interest

    CHICAGO — A federal judge in Illinois on June 25 denied a first-level excess professional liability insurer’s motion seeking approximately $3 million in prejudgment interest against the world's largest privately held commercial real estate services firm after ruling last year that the firm can access $48 million in excess coverage for underlying defense and settlement costs arising from lawsuits alleging appraisal-related errors (Cushman & Wakefield Inc. v. Illinois National Insurance Company, et al., No. 14-8725, N.D. Ill.).

  • July 2, 2019

    Claims Potentially Trigger Professional Liability Coverage, Delaware Judge Says

    WILMINGTON, Del. — A Delaware judge on June 24 held that claims alleging that an insured installed “counterfeit” delineator posts while performing its contractual services for the Florida Department of Transportation (FDOT) potentially trigger coverage under a contractor's protective professional indemnity and liability insurance policy, rejecting the insurer’s contention that two policy exclusions bar coverage (Steadfast Insurance Company v. DBi Services, LLC, No. N18C-03-291 PRW CCLD, Del. Super., New Castle Co., 2019 Del. Super. LEXIS 302).

  • June 28, 2019

    Judge: Negligence Claims Against Chiropractor Trigger Professional Liability Coverage

    COLUMBUS, Ohio — A federal judge in Ohio on May 30 denied a professional liability insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify its chiropractor insured against two underlying sexual assault suits, finding that the underlying plaintiffs assert negligence claims that arguably fall within the policy coverage terms (NCMIC Insurance Co. v. Ryan D. Smith, D.C., et al., No. 18-533, S.D. Ohio, Eastern Div., 2019 U.S. Dist. LEXIS 90830).

  • June 28, 2019

    Judge Denies Summary Judgment Motions In Insurers’ Indemnification Dispute

    NEW YORK — A New York judge on June 20 denied motions for summary judgment in an insurer and its insured’s lawsuit disputing their duty to indemnify another insurer for an underlying lawsuit arising from an employee injury, finding that the defendant has not yet establishedthat its right to indemnification has ripened (Nationwide Mutual Insurance Company, et al. v. Century Surety Company, No. 656681/2017, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 3369).

  • June 28, 2019

    Trademark Infringement Coverage Suit Dismissed For Lack Of Personal Jurisdiction

    NEW YORK — Finding that insureds have not waived their right to defend on grounds of a lack of personal jurisdiction, a federal judge in New York on June 26 granted their motion to dismiss an insurer’s declaratory judgment suit challenging coverage for an underlying trademark infringement dispute (Hiscox Insurance Co., Inc. v. Curtis Bordenave, et al., No. 18-10222, S.D. N.Y., 2019 U.S. Dist. LEXIS 107012).

  • June 28, 2019

    Professional Liability Insurer Has No Duty To Indemnify Defects Default Judgment

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on June 27 affirmed a lower federal court’s ruling that a professional liability insurer has no duty to indemnify an insured for a $1.3 million default judgment entered in favor of a condominium association in an underlying construction defects lawsuit (Essex Insurance Company v. Blue Moon Lofts Condominium Association, et al., Nos. 18-3443 and 18-3530, 7th Cir., 2019 U.S. App. LEXIS 19174).

  • June 28, 2019

    Insurer Has No Duty To Defend Wrongful Death Suit, 10th Circuit Affirms

    DENVER — The 10th Circuit U.S. Court of Appeals on June 27 affirmed a lower federal court’s ruling that a commercial general liability insurer has no duty defend or indemnify its insured against an underlying wrongful death lawsuit, finding that the unambiguous policy language provides coverage only for the insured’s courier business and not his security business (Benjy D. Smith V. The Burlington Insurance Company, No. 18-5040, 10th Cir., 2019 U.S. App. LEXIS 19175).

  • June 27, 2019

    California Panel: Insurers Owe No Defense For Suit Filed Against Property Developer

    SAN DIEGO — A California appeals panel on June 26 affirmed a lower court’s ruling that three insurers have no duty to defend against an underlying lawsuit alleging that their property developer insured made false representations about the property to the buyer, finding that there was no unexpected and unintended event between the insured’s intentional construction of a portion of property improvements and the encroachment onto an adjacent property (Majid Mortazavi, et al., v. Federal Insurance Company, et al., No. D072923, Calif. App., 4th Dist., Div. 1, 2019 Cal. App. Unpub. LEXIS 4320).

  • June 27, 2019

    Civil Investigative Demand Constitutes ‘Claim’ Under Professional Liability Policy

    WILMINGTON, Del. — A Delaware judge on June 24 found that a civil investigative demand issued by the Texas attorney general against an insured constitutes a claim for nonmonetary relief that alleged a wrongful act under a professional liability insurance policy, triggering primary and excess insurers’ duty defend and indemnify and denying their partial motion to dismiss (Conduent State Healthcare, LLC, et al. v. AIG Specialty Insurance Company, No. N18C-12-074, Del. Super.).

  • June 27, 2019

    Judge Refuses To Dismiss Third-Party Beneficiary Claim Against Claims Investigator

    NEW ORLEANS — A federal judge in Louisiana on June 25 denied a professional liability insurer and a claims investigator's motion to dismiss an insured’s third-party beneficiary claim pursuant to Louisiana Civil Code Article 1978, finding that the insured has pleaded facts demonstrating that it is a third-party beneficiary to the contract between the insurer and the claims investigator (Hammerman & Gainer, LLC v. Lexington Insurance Co., No. 18-6729, E.D. La., 2019 U.S. Dist. LEXIS 105913).

  • June 26, 2019

    No Coverage Owed For Suit Alleging Insured Illegally Installed Fiber-Optic Cable

    KANSAS CITY, Mo. — A Missouri appeals court panel on June 25 affirmed a lower court’s ruling that two insurers have no duty to contribute to another insurer’s defense of an underlying class action alleging that their insured illegally installed or used more than 2,000 miles of fiber-optic cable on class members' land that was only subject to a limited electric-utility easement or occupancy, finding that there were no underlying claims for loss of or damage to tangible property or for personal or advertising injury to trigger coverage (Navigators Insurance Company v. American Home Assurance Company, et al., No. WD82118, Mo. App., Western Dist., Div. 3, 2019 Mo. App. LEXIS 1010).

  • June 26, 2019

    Insurer Has No Duty To Defend, Indemnify Shareholder Derivative Suit, Judge Rules

    CHICAGO — A federal judge in Illinois on June 24 held that an insurer has no duty to defend or indemnify against an underlying shareholder derivative lawsuit because the policy’s insured versus insured (IVI) exclusion bars coverage and the insured has failed to establish that any exception to the exclusion applies to trigger coverage (World Water Works Holdings, Inc. v. Continental Casualty Co., et al., No. 17-5237, N.D. Ill., Eastern Div., 2019 U.S. Dist. LEXIS 104938).

  • June 26, 2019

    Judge Partly Grants Insurer’s Motion To Dismiss In Coverage Suit Over Bank Fraud

    WILMINGTON, Del. — A Delaware judge on May 31 granted in part and denied in part an insurer’s motion to dismiss claims in an insured’s lawsuit seeking coverage for its alleged losses caused by an employee who conspired to commit bank fraud, finding that the insured has not sufficiently pleaded a bad faith claim against the insurer (WSFS Financial Corporation, et al. v. Great American Insurance Company, No. N18C-09-088, Del. Super., 2019 Del. Super. LEXIS 265).