Mealey's Emerging Insurance Disputes

  • April 22, 2020

    Restaurants Ask JPMDL To Transfer Business Interruption Coverage Suits Over COVID-19

    WASHINGTON, D.C. — Two Philadelphia restaurants on April 20 asked the U.S. Judicial Panel on Multidistrict Litigation to transfer and coordinate current and tag-along lawsuits seeking business interruption coverage for losses arising from governmental closure orders prompted by the coronavirus pandemic to the U.S. District Court for the Eastern District of Pennsylvania, asserting that this issue is “of national importance and great significance to the ultimate survival of many businesses” and specifically requesting Judge Timothy J. Savage because he is “an excellent jurist who can shepherd this litigation” (In re: COVID-19 Business Interruption Insurance Coverage Litigation, JPMDL).

  • April 21, 2020

    CGL Insurer’s Amended Complaint Must Be Dismissed For Lack Of Jurisdiction

    FAYETTEVILLE, Ark. — An insurer’s counterclaim and cross-claim in a coverage suit arising out of the insured’s manufacturing of defective chicken products should be dismissed because the Arkansas federal court does not have jurisdiction over the claims as diversity of citizenship no longer exists (Nationwide Mutual Insurance Co. v. Ozark Mountain Poultry Inc., et al., No. 20-05014, W.D. Ark.).

  • April 20, 2020

    Federal Judge Refuses To Dismiss Insurer’s Coverage Suit For Lack Of Jurisdiction

    WICHITA, Kan. — A federal judge in Kansas on April 15 denied a joint motion to dismiss an insurer’s amended complaint seeking a declaration as to coverage for underlying fraud and breach of fiduciary claims against its insured, rejecting the defendants’ contention that the federal court lacks jurisdiction (Philadelphia Indemnity Insurance Company v. Nickson Young, et al., No. 19-01158, D. Kan., 2020 U.S. Dist. LEXIS 66088).

  • April 17, 2020

    States Propose Bills Mandating Business Interruption Coverage For Coronavirus Losses

    COLUMBIA, S.C. — Three South Carolina senators on April 8 introduced to the state’s General Assembly General Bill 188, which proposes that every property damage insurance policy that includes a loss of use and occupancy or business interruption shall be construed to include coverage for loss of use and occupancy or business interruption that directly or indirectly results from the coronavirus global pandemic, “including all mutated forms of the COVID-19 virus.”

  • April 17, 2020

    New Jersey Prohibits Insurers From Canceling Policies During Emergency Grace Periods

    TRENTON, N.J. — New Jersey Gov. Philip D. Murphy on April 9 issued an executive order that prohibits the state’s insurers from canceling coverage for nonpayment during emergency grace periods in response to the coronavirus public health emergency.

  • April 14, 2020

    COMMENTARY: Reinsurance Arbitrations In The Age Of COVID-19: Including The Use Of Zoom

    By Debra J. Hall and Robert M. Hall

  • April 14, 2020

    Insured Could Not Have Anticipated Lawsuits When Seeking Coverage, Judge Rules

    PHILADELPHIA — A federal judge in Pennsylvania on March 31 denied an insurance company’s motion for summary judgment in a lawsuit seeking to void a professional liability policy issued to a woman’s health care practice, finding that there is insufficient evidence to create a genuine dispute as to whether the insureds could have anticipated the filing of two medical malpractice lawsuits when completing the policy application (MDAdvantage Insurance Company of New Jersey v. Aaron S. Hasiuk M.D., et al., No. 16-969, E.D. Pa., 2020 U.S. Dist. LEXIS 55614).

  • April 14, 2020

    Judge Denies Insurers Leave To Appeal Bankruptcy Court’s Order Over Policy Exclusions

    NEW YORK — A federal judge in New York on April 10 denied insurers’ motion for leave to appeal a bankruptcy court’s order that found that the “Return of Fees” and “Mortgage Fee Claim” policy exclusions do not bar coverage for settlements arising from claims that a subsidiary of General Motors Corp. violated state and federal lending laws (Certain Underwriters at Lloyd's, London, et al., v. Rowena Drennen, et al., No. 20-1645, S.D. N.Y., 2020 U.S. Dist. LEXIS 64437).

  • April 14, 2020

    Commissioner Requires Broader Insurance Premium Reductions In Wake Of Coronavirus  

    SACRAMENTO, Calif. — The California insurance commissioner on April 13 issued a bulletin to all of the state’s property and casualty and workers’ compensation insurers, recognizing that the coronavirus pandemic has “severely curtailed activities of policyholders in both personal and commercial lines” and requiring “broader premium reductions for other lines of insurance in addition to reductions for the private passenger automobile insurance line.”

  • April 14, 2020

    Commingling Exclusion Bars Coverage For Employee Theft, Federal Judge Says

    BISMARCK, N.D. — A chief federal judge in North Dakota on April 10 held that a professional liability errors and omissions insurance policy’s commingling exclusion bars coverage for a $1,294,967.58 theft committed by the insured’s employee, granting the insurer’s motion to dismiss the insured’s breach of contract and bad faith lawsuit seeking the remaining $269,967.58 of its loss (Campbell Property Management, LLC v. Lloyd's Syndicate 3624, Lloyd's of London Underwriters, No. 18-00237, D. N.D., Eastern Div., 2020 U.S. Dist. LEXIS 63064).

  • April 14, 2020

    Judge: Intellectual Property Exclusion Bars Coverage; Insured Breached Agreement

    HOUSTON — A federal judge in Texas on April 3 held that an insurance policy’s intellectual property exclusion unambiguously barred coverage for an underlying lawsuit alleging that an  insured  bribed and induced a competitor’s employees to wrongfully misappropriate confidential information, further finding that the insured breached the underlying settlement agreement by suing the competitor (Paloma Resources, LLC, et al. v. Axis Insurance Company, et al., No. 18-247, S.D. Texas, 2020 U.S. Dist. LEXIS 58925).

  • April 14, 2020

    Panel: No Directors, Officers Coverage Owed For Church’s Suit Against Defected Group

    BOSTON — The First Circuit U.S. Court of Appeals on April 10 affirmed a lower federal court’s ruling that a directors and officers liability insurer has no duty to defend and indemnify a trespass and conversion lawsuit that its church insured brought against former members that voted to withdraw from the church and affiliate with another church under a new name (Newton Covenant Church, et al. v. Great American Insurance Company, No. 19-1826, 1st Cir., 2020 U.S. App. LEXIS 11355).

  • April 14, 2020

    Owner Tells Federal Court Coronavirus Is ‘Physically Impacting’ Its Restaurant

    PHILADELPHIA — A Philadelphia restaurant owner sued its insurer in a Pennsylvania federal court on April 10, seeking a declaration that its all-risk insurance policy covers any current and future civil authority closures of Philadelphia County restaurants due to physical loss or damage from the novel coronavirus and that its policy provides business income coverage if the coronavirus causes a loss or damage at its restaurant (LH Dining L.L.C. v Admiral Indemnity Company, No. 20-01869, E.D. Pa.).

  • April 10, 2020

    COMMENTARY: Reinsurance Coverage Issues For COVID-19 Claims

    By Ernesto Palomo

  • April 13, 2020

    COMMENTARY: The Key Coverage Issues Regarding Business Interruption From COVID-19

    By Charles (Tony) Jones, Jennifer Mathis and Michael Huggins

  • April 13, 2020

    Business Interruption Claim ‘Wrongfully Denied,’ Insured Argues In Coronavirus Suit

    HOUSTON — An insured on March 26 filed suit in a Texas court, alleging that its insurer “wrongfully denied” its claim for business interruption losses stemming from the coronavirus outbreak and “engaged its agents to misrepresent Policy provisions and coverage” (Barbara Lane Snowden v. Twin City Fire Insurance Company, No. 2020-19538, Texas Dist., Harris Co.).

  • April 13, 2020

    Judge Dismisses Complaint Seeking Coverage Above Policy’s FLSA Sublimit Endorsement

    BROOKLYN, N.Y. — A federal judge in New York on March 31 dismissed with prejudice an insured’s complaint seeking a declaration that its insurer owes coverage beyond the $100,000 sublimit in a “Fair Labor Standards Act” endorsement to its employment practices liability insurance policy, granting the insurer’s motion for summary judgment and denying the insured’s motion (Sirob Imports Inc. v. Mount Vernon Fire Insurance Company, No. 19-314, E.D. N.Y., 19-CV-314).

  • April 13, 2020

    Sports Bar Amends Coronavirus Complaint After Federal Judge Orders It To Show Cause

    TAMPA, Fla. — A sports bar insured on April 8 amended its complaint against its commercial property insurer seeking coverage for its losses arising from the “COVID-19 governmental suspension of business operations” five days after a federal judge in Florida issued a sua sponte order directing the insured to show cause as to why its complaint should not be dismissed for lack of diversity jurisdiction under 28 U.S. Code Section 1332(a)(1), 28 U.S.C. § 1332(a)(1) (Prime Time Sports Grill, Inc. v. Certain Underwriters at Lloyd’s London, No. 20-00771, M.D. Fla.).

  • April 09, 2020

    Panel Certifies Question To New York High Court In Discrimination Coverage Suit

    NEW YORK — The Second Circuit U.S. Court of Appeals on April 9 held that the New York Court of Appeals has not yet addressed whether a general liability insurer must defend its insured against a discrimination lawsuit under a failure-to-accommodate theory, certifying the question to the state high court (Brooklyn Center for Psychotherapy Inc. v. Philadelphia Indemnity Insurance Co., No. 19-2266, 2nd Cir., 2020 U.S. App. LEXIS 11175).

  • April 09, 2020

    Insureds: Insurer Misrepresented Policies, Mishandled Claims Arising From Coronavirus

    SAN ANTONIO — Barbershop insureds on April 8 sued State Farm Lloyds in a Texas court for breach of contract, bad faith and “multiple violations” of the Texas Insurance Code, alleging that the insurer wrongfully denied their business interruption claims arising from the novel coronavirus outbreak and misrepresented its policy provisions and coverage (Outlaws & Gents Grooming, LLC, et al. v. State Farm Lloyds, Texas Dist., Bexar County).