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Mealey's Insurance

May 04, 2023
Pollution, Contamination Exclusion Bars Coverage For Virus Claims, Judge Reiterates

PHILADELPHIA — A pollution and contamination exclusion included in primary and excess all-risk policies bars coverage for an insured hotel operator’s business losses sustained in the wake of the COVID-19 pandemic, a Pennsylvania judge said in denying the insured’s motion for reconsideration and rejecting the insured’s argument that the exclusion applies only to traditional environmental pollution claims.
May 03, 2023
Insurer Says District Court Correctly Found No Coverage For Mold, Water Damage

ATLANTA — The 11th Circuit U.S. Court of Appeals should affirm a district court’s ruling that no coverage is owed for mold damage discovered in an insured hotel because the hotel has a long and documented history of water leaks and mold growth due to faulty construction that incepted prior to the applicable policy period, the insurer says in its appellee brief.
May 03, 2023
Polychlorinated Biphenyls Exclusion Bars Some Costs Incurred By Insured, Judge Says

SOUTH BEND, Ind. — An Indiana federal judge partially granted an insurer’s motion for reconsideration and reversed a prior decision on the applicability of the policy’s polychlorinated biphenyls (PCB) exclusion after determining that the exclusion is enforceable as it applies to the cleanup of damages related to PCBs because the insurer’s policy specifically stated that insurer had the right to include exclusions in its policy that differed from the lead policy, a layered multisite, multistate insurance policy.
May 01, 2023
Pollution Exclusion Bars Coverage For Noxious Odors Suit, Insurers Maintain

TYLER, Texas — No coverage is owed for an underlying suit alleging damages caused by the release of noxious odors by an insured fertilizer plant because the policies’ exclusions for pollution and expected an intended injury bar coverage, insurers say in a complaint filed in Texas federal court.
May 01, 2023
Pollution Exclusion Does Not Bar Coverage For Cleanup Of Blood, Feces, Panel Says

DAYTONA BEACH, Fla. — A trial court correctly found that a policy’s pollution exclusion does not bar coverage for the cleanup of blood and feces in an insured’s shed because blood does not qualify as a pollutant pursuant to the policy’s definition of a pollutant, the Fifth District Florida Court of Appeal said.
May 01, 2023
5th Circuit To Review Challenge To Arbitrability Of $7M Hurricane Ida Claims

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeal has granted an unopposed request to review a federal court’s ruling compelling arbitration of a dispute over an insured’s claims for millions of dollars in damages caused by Hurricane Ida and for bad faith against its foreign and domestic insurers, after the insured and insurers both stated that the arbitrability of such claims is the subject of a “split among the Louisiana federal district courts.”
April 28, 2023
Parties Stipulate To Withdrawal Of Reinsurer’s Appeal Of Defense Costs Ruling

NEW YORK — An appeal to the Second Circuit U.S. Court of Appeals in a long-running dispute over defense costs for asbestos liabilities has been withdrawn by stipulation of the parties.
April 28, 2023
Claims Fail In Water Damage, Asbestos Contamination Coverage Suit, 9th Circuit Panel Says

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s entry of summary judgment in favor of a property insurer, agreeing with the district court’s finding that the insured failed to meet her burden of proving that the insurer breached its contract or acted in bad faith in its handling of her claim for water damage and asbestos contamination.
April 28, 2023
Negligence Claim Against Insurer In Water Damage Coverage Suit Cannot Proceed

PROVIDENCE, R.I. — A negligence claim alleged against a homeowners insurer in a coverage dispute over water damage cannot proceed because the insured failed to show that the insurer owed a duty of care to the insured and breached its duty of care, a Rhode Island federal judge said.
April 27, 2023
Genuine Coverage Dispute Exists In Foundation Damage Suit; Bad Faith Claim Fails

SACRAMENTO, Calif. — A bad faith claim alleged against a homeowners insurer in a dispute over coverage for the shifting of the foundation of the insureds’ home cannot proceed because there is a genuine dispute over whether coverage is afforded under the policy and the insurer met its burden of showing that it acted in good faith in handling the insureds’ claim, a California federal judge said.
April 24, 2023
Restaurant Owner Says Coverage Owed For Sewage Line Backup Damages

LOS ANGELES — An insured restaurant owner argues in a brief filed in the Second District California Court of Appeal that a trial court incorrectly granted summary judgment in favor of its insurer in a coverage dispute over water damages caused by a sewer line backup because issues of fact exist as to the cause of the backup and whether coverage was afforded for some of the damage.
April 24, 2023
No Coverage Owed For Water Damage Caused By Bursting Of Frozen Water Pipes

NEW YORK — No coverage is owed for water damage to an insured restaurant because a policy’s vacancy exclusion barred coverage, a New York justice said in noting that there is no evidence that the insured took steps to protect the property’s water pipes from freezing and bursting while the property was vacant.
April 20, 2023
Judge: Homeowner’s Personal Injuries Excluded Under Contractor’s Policy

PHILADELPHIA — An insurer does not owe coverage to homeowners under the terms of a policy it provided to a contractor for personal injuries one of the homeowners sustained as a result of mold infestation caused by the contractor’s negligent workmanship because the injuries are excluded under at least one of the policy’s exclusions, a federal judge in Pennsylvania ruled.
April 19, 2023
No Coverage Owed For Mold Damages Under Homeowners Policy, 5th Circuit Says

AUSTIN, Texas — A district court properly concluded that insureds’ claims for breach of contract, bad faith and declaratory judgment against their homeowners insurer cannot proceed because the policy’s mold exclusion bars coverage for the insureds’ claim for additional mold damages within their home, the Fifth Circuit U.S. Court of Appeals said April 18 in affirming the lower court’s judgment for the insurer.
April 19, 2023
9th Circuit Denies Burger Chain’s Petition For Rehearing In COVID-19 Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 18 unanimously denied In-N-Out Burgers’ petition for panel rehearing and rehearing en banc challenging its March 10 ruling that affirmed a lower court’s dismissal of its breach of contract lawsuit against its commercial property insurer seeking business interruption coverage for its coronavirus losses.
April 18, 2023
Bound By Connecticut High Court Ruling, Panel Says No Coverage For COVID-19 Losses

NEW YORK — The Second Circuit U.S. Court of Appeals on April 17 affirmed a lower federal court’s finding that insureds failed to plausibly assert “direct physical loss or damage” to their insured property to trigger business interruption and extra expense coverage under their policy, noting that it is bound by the Connecticut Supreme Court’s recent holding in Connecticut Dermatology Group, PC v. Twin City Fire Insurance Company as to the meaning of the phrase “direct physical loss.”
April 17, 2023
Magistrate Bifurcates Bad Faith, Unfair Practices Claims In Coverage Row

PADUCAH, Ky. — Granting an opposed motion filed by the defendants in a coverage dispute involving a reinsurer, a Kentucky magistrate judge on April 14 found bifurcating and staying discovery on a bad faith claim and a claim of violating the Kentucky Unfair Claims Settlement Practices Act (KUCSPA) to be appropriate.
April 14, 2023
Magistrate Judge Quashes Subpoenas Seeking Testimony From Asbestos Insurers

NEW ORLEANS — Subpoenas seeking trial testimony generally name insurance companies rather than specific representatives and improperly came after the close of discovery, a federal magistrate judge in Louisiana said in granting motions to quash.
April 14, 2023
8th Circuit Majority Says Per-Claim Limit Applies In Lead-Smelting Coverage Suit

ST. LOUIS — A district court erred in finding that a per-occurrence limit applies in a coverage dispute over underlying personal injury claims arising out of the insured’s lead-smelting operations because an endorsement regarding the policy limits modifies the limits of liability to be on a per-claim basis, the majority of the Eighth Circuit U.S. Court of Appeals said April 13 in reversing the district court’s ruling.
April 14, 2023
Partial Denial Of Coverage For Insureds’ Mold Damages Was Reasonable, Judge Says

ATHENS, Ga. — A homeowners insurer’s partial denial of a claim for mold damages was reasonable based on the policy’s endorsement for limited mold remediation costs, a Georgia federal judge said in granting the insurer’s motion for summary judgment on the insureds’ breach of contract and bad faith claims.
April 13, 2023
Judge: Insured Businesses ‘Fatally Undermined’ Their COVID-19 Interruption Suit

LOS ANGELES — A California federal judge dismissed without leave to amend two businesses’ lawsuits accusing their insurer of violating California’s unfair competition law (UCL) by denying them coverage for damages caused by the suspension of their operations during government-ordered shutdowns, finding that they “fatally undermined” their argument opposing application of a virus exclusion in the policies by acknowledging that the shutdowns were caused by COVID-19.
April 13, 2023
Pollution Exclusion Bars Coverage For Underlying Bodily Injury Suit, Insurer Says

WEST PALM BEACH, Fla. — A commercial lines insurer maintains in a suit filed in Florida federal court that it has no duty to defend or indemnify its insureds for an underlying suit alleging that exposure to diesel fumes caused the underlying plaintiff to contract bladder cancer because the policies’ pollution exclusion bars coverage.
April 12, 2023
Summary Judgment In Property Coverage Loss Suit Denied; Questions Of Fact Remain

DENVER — A Colorado federal judge on April 11 denied motions for summary judgment in a dispute over whether coverage is owed under a homeowners insurance policy’s vandalism clause for the loss of personal property based on a contractor’s failure to conduct a test for the presence of asbestos before demolishing the insureds’ kitchen floor because questions of fact exist regarding the credibility of statements made by the insureds and whether the insureds permitted the contractor to remove the kitchen floor.
April 11, 2023
Interlocutory Appeal Of Pollution Exclusion Ruling Not Warranted

HOUSTON — A Texas federal magistrate judge recommended denying a commercial general liability’s insurer’s motion for interlocutory appeal of a recent ruling that the insurer’s pollution exclusion does not bar coverage for a multidistrict litigation suit alleging that the insured’s sand-mining business contributed to the flooding sustained during Hurricane Harvey because the insurer failed to demonstrate that the ruling presents a controlling question of law that must be addressed.
April 10, 2023
Executive Officer Insurer Asbestos Claims Stayed For Liability Resolution

NEW ORLEANS — Separate litigation that will settle which insurer is liable for policies covering executive officers warrants staying a woman’s take-home asbestos exposure case against one of the alleged insurers, a federal judge in Louisiana said.