BOWLING GREEN, Ky. — An insured’s claims for bad faith and violation of the Kentucky Unfair Claims Settlement and Practices Act (KUCSPA) arising out of an insurer’s denial of coverage for lost business profits following the collapse of the insured’s roof can proceed because the insured sufficiently alleged that the insurer unreasonably denied the claim, a Kentucky federal judge said June 16.
OKLAHOMA CITY — The Oklahoma Supreme Court on June 14 affirmed a trial court’s finding that coverage is afforded for seismic activity allegedly caused by an oil and gas producer’s use of waste water disposal wells because the underlying suit filed by residents who sustained property damages alleges an occurrence under the policies and the policies’ pollution exclusion is ambiguous as to whether coverage is barred for the underlying suit.
STAMFORD, Conn. — A Connecticut judge on June 14 granted an insured’s motion to compel appraisal in a coverage dispute over a sewage flood after determining that nothing in the policy requires the coverage issues to be decided before proceeding to appraisal.
NEW YORK — The Second Circuit U.S. Court of Appeals on June 16 reversed a district court’s ruling that the full aggregate policy limits do not apply to an insured’s policies that were effective for less than a full year because the policies at issue are ambiguous as to whether the full aggregate limits should apply for underlying asbestos liabilities and must be construed in favor of the insured.
DALLAS — A federal judge in Texas on June 14 issued a pair of opinions granting in part and denying in part an insurer’s motions for summary judgment and to exclude expert testimony in a coverage dispute stemming from The Travelers Lloyds Insurance Co.’s denial of coverage to a subcontractor for moisture and mold damages to a temporary building the subcontractor built for the U.S. government.
RICHMOND, Va. — Dispensing with oral argument, the Fourth Circuit U.S. Court of Appeals on June 14 affirmed a lower federal court’s ruling in favor of an insurer in an insured’s lawsuit seeking a declaration as to business interruption coverage for the effects on its business and operations from the coronavirus pandemic.
BRONX, N.Y. — A trial court did not err in denying a pollution legal liability insurer’s motion to dismiss an insured’s claims for breach of contract and bad faith arising out of the insured’s claim for business interruption losses caused by the shutdown orders issued in the wake of the COVID-19 pandemic because the insurer failed to meet its burden of proving that no coverage is afforded under the policy for the losses, the First Department of the New York County Supreme Court Appellate Division said June 14.
NEW ORLEANS — A district court erred in finding that a pollution liability insurer owes no coverage to an insured for an underlying lawsuit alleging that the insured illegally discharged wastewater into a city sewage treatment facility because any ambiguity regarding the underlying allegations must be construed in favor of coverage, the insured says in a June 13 appellant brief filed in the Fifth Circuit U.S. Court of Appeals.
MIAMI — An insurer breached its contract by refusing to defend or reimburse its insured for defense costs incurred in an underlying suit arising out of emissions from the insured’s sugarcane farming business because the insured met the policy’s $1 million self-insured retention by paying for its defense costs, the insured contends in a June 7 complaint filed in Florida federal court.
BOSTON — The First Circuit U.S. Court of Appeals on June 7 certified a question in a pollution liability coverage dispute to the Massachusetts Supreme Judicial Court, asking the court to determine whether Massachusetts recognizes “a common-law duty for insurers to cover costs incurred by an insured party to prevent imminent covered loss, even if those costs are not covered by the policy.”
By Scott M. Seaman and Sarah Anderson
BOSTON — An insurer’s motion for summary judgment in a dispute arising out of coverage for an underlying bodily injury suit stemming from contact with raw sewage must be denied because the policy’s pollution exclusion is ambiguous and must be construed in favor of coverage, the insureds maintain in a June 9 opposition to the insurer’s motion for summary judgment filed in Massachusetts federal court.
SAN FRANCISCO — A district court erred in finding that an insurer has no duty to indemnify a city on behalf of its insured for a judgment entered against the insured in an underlying environmental contamination dispute because the releases of contaminants into the groundwater are not excluded by the policies’ pollution exclusion and the releases were not expected or intended by the insured, the city contends in a June 8 appellant brief filed in the Ninth Circuit U.S. Court of Appeals.
CHARLESTON, S.C. — A South Carolina federal judge on June 8 partially denied an insured’s motion for reconsideration, reiterating that the insured’s counterclaim for bad faith in a dispute over coverage for water damages in the insured’s home cannot proceed; however, the judge granted the motion as it applied to the insured’s negligence counterclaim because a reasonable juror could find that the insurer was negligent in handling the insured’s claim.
Noting that a court recently approved its $157.2 million settlement with the state of Montana regarding alleged asbestos exposures, National Indemnity Co. (NICO) on June 6 filed two suits in Nebraska federal court seeking declaratory judgment against reinsurers it said it had just billed for their portions of the loss; on June 7, NICO moved in Pennsylvania federal court to dismiss or transfer a declaratory judgment suit that one of the reinsurers had filed there over the same issue.
NEWNAN, Ga. — No coverage is owed to an insured seeking coverage for an underlying suit alleging that a lake was polluted by nearby construction activities in which the insured was involved because the underlying suit does not allege an occurrence and the policies at issue include pollution exclusions that bar coverage for the underlying suit, insurers contend in a May 31 complaint filed in Georgia federal court.
MIAMI — An insured filed a notice of appeal to the 11th Circuit U.S. Court of Appeals on May 11 after a Florida federal judge on April 11 determined that a surplus lines insurer owes no coverage to its insured for water damage because the insured failed to prove that there was any physical loss to his property as a result of the failure of a cast iron drain line.
WASHINGTON, D.C. — The U.S. Supreme Court on June 6 denied an insured’s petition for writ of certiorari, refusing to review the 10th Circuit U.S. Court of Appeals’ ruling that a commercial lines policy’s virus exclusion clearly precludes coverage for the insured’s business losses sustained as a result of state government-ordered business closures to prevent the spread of the coronavirus.
GREENSBORO, N.C. — A North Carolina federal judge on June 2 entered an award of almost $1.5 million in favor of an insured seeking damages for a collapsed breezeway following the Fourth Circuit U.S. Court of Appeals’ ruling that the insured is entitled to treble damages for the insurer’s violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA).
NEW ORLEANS — A premises pollution liability insurer owes no coverage for costs incurred by an insured for COVID-19 mitigation efforts because the mitigation efforts do not qualify as remediation costs under the pollution liability policy, a Louisiana federal judge said May 16 in granting the insurer’s motion for summary judgment.