Mealey's Emerging Insurance Disputes

  • May 21, 2021

    Illinois High Court: Defense Owed For Claims Insured Disclosed Fingerprint Data

    SPRINGFIELD, Ill. — The Illinois Supreme Court on May 20 affirmed a lower court’s ruling that an insurer has a duty to defend against class action claims that its insured violated the Biometric Information Privacy Act by disclosing fingerprint data to a third party without consent, further affirming that the policy’s violation of statutes exclusion does not bar coverage.

  • May 21, 2021

    Michigan Panel Partly Reverses Sexual/Physical Abuse Liability Coverage Suit

    DETROIT — A Michigan appeals panel on May 20 held that an underlying lawsuit alleging that a gym insured’s owner installed hidden surveillance cameras in restrooms and changing facilities to record its patrons without their knowledge or consent falls under an insurance policy’s “physical-sexual abuse” exclusion, finding that while the insurer did not have a duty to indemnify the insureds, it did have a duty to defend.

  • May 20, 2021

    Convention Center Owner Tells 7th Circuit Its Policy Interpretation Is Reasonable

    CHICAGO — The owner of a hotel, restaurant and convention center on May 7 reiterated its argument asking the Seventh Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of its breach of contract and declaratory judgment lawsuit seeking coverage for its losses arising from the coronavirus pandemic, arguing that its interpretation of its “all-risk” insurance policy’s business income coverage is reasonable and, therefore, the insurer has failed to establish the “legal insufficiency” of its complaint.

  • May 20, 2021

    Insurer Accuses Art Gallery Of ‘Misdirection’ In Coronavirus Coverage Dispute

    NEW YORK — An insurer in a May 7 appellee brief asserts that New York law is settled on the meaning of “direct physical loss” and that the several pages an art gallery insured “devotes to cites from jurisdictions far and wide is nothing but an exercise in misdirection” and asks the Second Circuit U.S. Court of Appeals to affirm a lower federal court’s dismissal of the insured’s complaint for failing to assert facts establishing “direct physical loss of or physical damage to” its gallery.

  • May 19, 2021

    11th Circuit Raises Jurisdictional Question In Coronavirus Coverage Suit

    ATLANTA — The 11th Circuit U.S. Court of Appeals on May 12 asked the owner of a Florida restaurant and its insurer to address whether the relevant pleadings in a coronavirus coverage lawsuit sufficiently alleged the citizenship of the parties to invoke a Florida federal court’s jurisdiction in the first instance.

  • May 18, 2021

    Roundup Of Latest Briefs Over Coronavirus Coverage

    From amicus curiae briefs filed in the Seventh Circuit U.S. Court of Appeals in support of an insurer to a Ninth Circuit appeal by the owner of two Los Angeles restaurants, Mealey Publications takes a look at the latest pleadings relating to insurance coverage for COVID-19.

  • May 18, 2021

    Federal Magistrate Grants Limited Extension Of Service Deadline In Coverage Dispute

    TOPEKA, Kan. — The same day an insurer responded to an order to show cause, a federal magistrate judge in Kansas on May 17 granted a limited extension of the deadline for an insurer to serve defendants with its lawsuit disputing directors and officers liability coverage for underlying shareholder claims, directing the insurer to file proof of service or waivers of service or voluntarily dismiss its lawsuit by June 7.

  • May 18, 2021

    Majority: Insurer’s Answer Did Not Interrupt Abandonment Period As To Trailer Owner

    NEW ORLEANS — A majority of the Louisiana Supreme Court on May 13 held that an insurer’s filing of an answer to a personal injury lawsuit did not serve to interrupt the abandonment period as to its property owner insured, reversing an appeals court in part and remanding for the lower court to conduct an evidentiary hearing as to the property owner’s exception of prescription.

  • May 17, 2021

    Insured Seeks To Clarify That Defense Costs Of Directors, Officers Are Covered

    WILMINGTON, Del. — An insured on May 14 moved for reconsideration or clarification of a Delaware federal judge’s April 30 ruling in its lawsuit seeking coverage for an underlying stockholder action alleging that directors and officers breached their fiduciary duties, seeking to clarify that the underlying defense costs it incurred on behalf of the directors and officers are covered, subject to any allocation, just as with the underlying settlement amount.

  • May 17, 2021

    Insurer Disputes Coverage For Suits Over Crash That Killed Kobe Bryant, Daughter

    SANTA ANA, Calif. — An insurer on May 12 filed a declaratory judgment lawsuit in a federal court in California, seeking a declaration that it owes no coverage for four underlying lawsuits alleging that its insured was negligent in connection with a Jan. 26, 2020, helicopter crash that killed Kobe Bryant, his daughter and six others.

  • May 17, 2021

    6th Circuit Majority Partly Reverses Ruling In Errors And Omissions Coverage Suit

    CINCINNATI — A majority of a Sixth Circuit U.S. Court of Appeals panel on May 14 held that a lower federal court properly found that an errors and omissions insurer has no duty to defend its third-party administrator of health plans insured against two underlying lawsuits but erred in reaching the same finding as to a third action, further finding that the lower court erred in rescinding the policy.

  • May 14, 2021

    Panel Reverses Dismissal Of Negligent Procurement Claims Against Broker, Agent

    ATLANTA — The 11th Circuit U.S. Court of Appeals on May 13 reversed a lower federal court’s dismissal of a property management company’s negligent procurement of insurance claims against a broker and an agent and remanded with instructions for the lower court to permit the company at least one opportunity to amend its third-party complaint to assert additional facts relevant to the remaining claims.

  • May 14, 2021

    Panel: Dishonest Entrustment Exclusion Bars Coverage For Jewelry Stolen In Mob Scheme

    NEW YORK — A New York appeals panel on May 13 held that an insurance policy’s dishonest entrustment exclusion bars coverage for a jeweler insured’s loss arising from $2.09 million in jewelry stolen by a mobster in prison, affirming a lower court’s grant of the insurer’s motion for summary judgment in the insured’s breach of contract lawsuit.

  • May 14, 2021

    Magistrate Stays Discovery On Insurer’s Duty To Indemnify Senior Living Facility

    WILMINGTON, N.C. — A federal magistrate judge in North Carolina on May 5 granted in part an insurer’s motion to stay discovery in its declaratory judgment lawsuit pending resolution of an underlying class action alleging that a senior living facility and its owners breached their contractual duties to provide adequate staffing and personal care and knowingly failed to comply with staffing and personal care obligations, staying discovery on the indemnification issue and allowing discovery to proceed on “coverage” issues and certain counterclaims.

  • May 14, 2021

    Judge: Ralph Lauren Fails To Allege Physical Loss, Damage In COVID-19 Coverage Suit

    NEWARK, N.J. — A federal judge in New Jersey on May 12 denied Ralph Lauren Corp.’s motion for partial judgment on the pleadings and granted its insurer’s cross-motion for judgment on the pleadings in a coverage lawsuit arising from the coronavirus pandemic, finding that the insured’s pleadings fail to include any specific allegations as to physical loss or damage to its covered or surrounding properties.

  • May 13, 2021

    Judge Denies Insurer’s Motion For Summary Judgment As To T-Mobile’s NJCFA Claim

    SEATTLE — A federal judge in Washington on May 11 denied an insurer’s motion for summary judgment as to T-Mobile USA’s New Jersey Consumer Fraud Act (CFA) claim in a coverage dispute over an underlying lawsuit alleging that a cell phone tower caused property damage, finding that the CFA claim is based on the insurer’s purported deliberate concealment of material facts as to coverage.

  • May 12, 2021

    Panel:  No Defense Owed  For Unfair Practices Class Action Against Fitness Chain

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on May 11 affirmed a lower federal court’s ruling that an insurer has no duty to defend the operator of the "Urban Active" chain of fitness clubs against an underlying class action alleging unfair practices, finding that the policy’s contractual-liability exclusion bars directors and officers liability coverage.

  • May 12, 2021

    Judge:  How Can Insurer Be ‘So Certain’ That COVID-19 Was Not On Salon’s Premises?

    EAST ST. LOUIS, Ill. — A federal judge in Illinois on May 10 held that, for now, a hair salon insured has plausibly stated a cause of action that it is entitled to “Communicable Disease Business Income and Extra Expense Coverage” for its losses arising from the governmental shutdown of its business in response to the coronavirus pandemic, denying the insurer’s motion to dismiss the insured’s declaratory judgment lawsuit in its entirety.

  • May 12, 2021

    Policy Requires Insured To ‘Fall Down A Rabbit Hole,’ Judge Says In COVID-19 Suit

    PHILADELPHIA — Denying an insurer’s motion to dismiss a retail furniture insured’s lawsuit seeking coverage for its losses stemming from the forced closure of its business in response to the coronavirus pandemic, a Pennsylvania federal judge on May 7 said the more-than-100-page policy requires “the insured to fall down a rabbit hole and wander through a vast thicket of verbiage that would leave even the most careful reader mystified by the mazes of pages to be pieced together and deciphered in order to determine if there is coverage on the other side.”

  • May 11, 2021

    Amici: Policies Never Intended To Cover Economic Losses Untethered To Physical Damage

    CHICAGO — Amici curiae in support of an insurer on May 5 asked the Seventh Circuit U.S. Court of Appeals to affirm a lower federal court’s dismissal of a restaurant insured’s breach of contract lawsuit seeking coverage for its alleged $977,891 in lost business income arising from its government-ordered shutdown in response to the coronavirus pandemic, arguing that “[i]mposing a new and retroactive extra-contractual risk on insurers would threaten insurer solvency and harm Illinois’ insurance marketplace."