Mealey's Insurance
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May 14, 2021
No Coverage Owed For Rot, Termite Damage, 5th Circuit Panel Affirms
NEW ORLEANS — A homeowners insurer owes no coverage for the collapse of a home’s joists as a result of termite and rot damage because there was no entire collapse of the home as required by the policy, the Fifth Circuit U.S. Court of Appeals said May 13 in affirming a district court’s ruling in favor of the insurer.
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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.
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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.
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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.”
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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."
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May 11, 2021
Los Angeles Restaurant Owner Seeks Reversal Of No Coverage Ruling In COVID-19 Suit
SAN FRANCISCO — The owner of two Los Angeles restaurants recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of its lawsuit seeking coverage for its business income loss caused by the governmental shutdown orders in response to the coronavirus pandemic, contending that the lower court dismissed its complaint “based on a range of hypothetical policy consequences” that render its interpretation of the policy “unreasonable — even if conceivable.”
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May 11, 2021
Gallery: Court Erred In Accepting Insurer’s ‘Self- Serving’ Policy Interpretation
NEW YORK — A Manhattan-based art gallery tells the Second Circuit U.S. Court of Appeals in an April 2 brief that a lower federal court committed reversible error in its interpretation of an all-risk business owners insurance policy because it permitted the insurer to escape liability even though a reasonable interpretation of the policy requires the insurer to provide coverage for its losses arising from the forced cessation of its operations in response to the coronavirus pandemic.
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May 11, 2021
Oil, Gas Well Owner Is Entitled To Coverage As Additional Insured, Judge Says
BISMARCK, N.D. — A North Dakota federal judge on May 3 determined that the owner of an oil and gas well that exploded, injuring workers and killing one worker, is entitled to coverage under a number of policies as an additional insured and further determined that coverage is not barred by the pollution exclusions in the applicable policies based on a hostile fire exception and a time element exception.
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May 11, 2021
Panel Says Negligence Claim Against Force-Placed Homeowners Insurer Fails
ANNAPOLIS, Md. — The Maryland Court of Special Appeals on May 3 affirmed a trial court’s judgment in favor of a force-placed homeowners insurer on a negligence claim because the homeowner, who is seeking coverage for damages caused by an overflow of sewage in his home, failed to prove that the insurer had a duty to provide greater coverage than the coverage that was provided in the policy.
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May 10, 2021
No Coverage Owed For Environmental Contamination Claims, Judge Determines
GREAT FALLS, Mont. — Insureds seeking coverage for environmental contamination claims are not owed coverage under environmental impairment liability and contractors pollution liability policies because the insureds failed to file a claim for coverage during the environmental impairment liability policy periods and made material misrepresentations on their applications for the contractors pollution liability policies, a Montana federal judge said May 5 in granting the insurer’s motion for summary judgment.
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May 05, 2021
Judge Schedules Jury Trial In Asbestos, Reinsurance Coverage Dispute
ALBANY, N.Y. — A New York federal judge on April 30 issued a trial order, scheduling a jury trial to begin June 21 in a dispute between an insurer and a reinsurer over whether defense costs paid on behalf of an insured for asbestos liabilities are covered under the reinsurer’s policies.
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May 05, 2021
Insured Says Insurers Breached Contracts By Failing To Pay For Environmental Claim
NEWARK, N.J. — In an April 27 amended complaint filed in New Jersey federal court, an insured claims that its insurers, one of which is a subsidiary of a reinsurance group, breached their contracts by refusing to pay for an environmental investigation and remediation at an insured property.
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May 04, 2021
Insurer Says Pollution Exclusion Bars Coverage For Storm Water Runoff Damage
MACON, Ga. — No coverage is owed for an underlying lawsuit seeking damages caused by storm water runoff as a result of insureds’ property development activities because the policy’s pollution exclusion and the policy’s “your work” exclusion bar coverage for the underlying suit, an insurer asserts in an April 27 complaint filed in Georgia federal court.
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May 03, 2021
Philadelphia Eagles Move To Remand COVID-19 Coverage Suit Against Insurer
PHILADELPHIA — The owner and operator of the Philadelphia Eagles football organization on April 30 moved for the U.S. District Court for the Eastern District of Pennsylvania to remand its lawsuit seeking a declaration as to coverage for its alleged losses arising from the coronavirus pandemic eight days after its property insurer moved to dismiss the lawsuit, arguing that remand is warranted so the federal court “can avoid interference in the delicate state regulatory issues involved and give appropriate respect to the important state interests implicated by this action."
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May 03, 2021
Reinsurers Say Insurer’s Allocation Contradicts What Was Paid By Insurer
BOSTON — Summary judgment should be granted in favor of reinsurers involved in a reinsurance billings dispute over the insurer’s allocation of a $120 million environmental claims settlement because there is no dispute that the insurer’s reinsurance allocation contradicts the exposures that the insurer actually settled, the reinsurers contend in an April 14 reply in support of a motion for summary judgment filed in Massachusetts federal court.
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May 03, 2021
No Additional Coverage Owed For Water Damages, Florida Federal Judge Says
MIAMI — A Florida federal judge on April 29 determined that insureds are not entitled to additional coverage under a homeowners policy for water damages because the insureds failed to prove that the policy’s provisions for tear out coverage and ordinance and law coverage are applicable to their claim.
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May 03, 2021
Asbestos Suit Remanded; Claims Against Insurance, Reinsurance Broker Are Viable
BIRMINGHAM, Ala. — An Alabama federal judge on April 29 remanded a receiver’s suit seeking a coverage declaration for underlying asbestos personal injury suits filed against a dissolved thermal insulation contractor after determining that the insurance broker for the insured contractor was not fraudulently joined because the receiver stated viable claims against the broker related to insurance and reinsurance policies allegedly issued to the insured contractor.
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May 03, 2021
Judge: Fraud Claims Against Kaiser Gypsum Require State Court Coverage Ruling
CHARLOTTE, N.C. — A California court must determine whether fraud claims leveled against Chapter 11 debtor Kaiser Gypsum Co. Inc. by plaintiffs in two state asbestos actions are covered by Kaiser’s insurance, and the claims are stayed until a ruling on the issue, a North Carolina federal bankruptcy judge ruled March 29.
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April 30, 2021
Issue Of Fact Exists On Cause Of Insured’s Water Damage In Basement
GRAND RAPIDS, Mich. — The Michigan Court of Appeals on April 29 reversed and remanded a trial court’s decision in favor of a homeowners insurer after determining that a question of fact exists on the cause of the water damage in an insured’s basement.
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April 30, 2021
Judge Transfers COVID-19 Coverage Suit Brought By Owner Of Close To 80 Restaurants
CHICAGO — Calling it a “quizzical situation,” a federal judge in Illinois on April 26 refused to remand a coronavirus coverage lawsuit brought by the owner and operator of a network of nearly 80 restaurants throughout the country and exercised his discretion to transfer the lawsuit to the U.S. District Court for the Middle District of Florida where the insurer has a nearly identical declaratory judgment lawsuit pending.