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Mealey's Insurance

February 06, 2024
Insureds Appeal Pollution Exclusion Ruling In Carbon Monoxide Coverage Suit

BISMARCK, N.D. — Insureds filed a notice of appeal to the Eighth Circuit U.S. Court of Appeals, seeking review of a district judge’s finding that a pollution exclusion in their farmowners insurance policy excludes coverage for an underlying bodily injury suit arising out of carbon monoxide exposure at the insureds’ business.
February 01, 2024
W.R. Grace Insurer, Former Employees Resolve Dispute Over Asbestos Payments

GREAT FALLS, Mont. — A W.R. Grace & Co. insurer and former workers resolved two cases accusing the insurer of profiting from the “float” created when it delays asbestos-related payments for which it was liable.
January 31, 2024
Service Is Key Issue In Suit Against Reinsurer For Settlement Reimbursement

OMAHA, Neb. — Whether a Brazil-based reinsurer was properly served has become a key issue in a suit seeking reimbursement for a settlement reached with Montana regarding alleged asbestos exposure, with an insurer telling the Nebraska federal court in a reply brief that precedent supports its bid for default judgment.
January 31, 2024
Wall’s Structural Instability Caused By Deterioration, Not Collapse, Judge Says

CHATTANOOGA, Tenn. — No coverage is owed for the replacement of an entire wall of a building undergoing renovations because the cause of the structural instability of the wall was deterioration and not the collapse of a limited number of bricks from the wall during the construction work, a Tennessee federal judge said Jan. 30 in entering judgment in favor of the insurer.
January 31, 2024
Missouri Federal Judge Dismisses Water Damage Suit Following Settlement

ST. JOSEPH, Mo. — A Missouri federal judge dismissed an insured’s suit seeking coverage for water damage caused by the improper installation of the home’s exterior insulation system and exterior doors after the parties filed a joint stipulation for dismissal following the settlement of the insured’s claim.
January 30, 2024
Pollution Exclusion Bars Coverage For Chemical Explosion, Insurer Says

HOUSTON — No coverage is owed to an insured for underlying lawsuits stemming from an explosion following the release of toxic chemicals at an oil refinery because the insured failed to provide timely notice of the incident and the policy’s pollution exclusion precludes coverage, an excess liability insurer says in a complaint filed in Texas federal court.
January 29, 2024
Delaware Judge Stays Exposure Coverage Suit Until Similar Suit Is Resolved

WILMINGTON, Del. — A Delaware state judge on Jan. 26 stayed a suit filed by two insurers seeking a declaration regarding their coverage obligations to insureds for underlying bodily injury suits arising out of exposure to the release of ethylene oxide (EtO) from the insureds’ sterilization plants after determining that a suit pending in Illinois state court filed by one of the insureds prior to the insurers’ Delaware suit should be resolved first as the Illinois suit involves the same coverage issues and parties.
January 29, 2024
Kaiser Debtors, Claimant Reps Agree Asbestos Insurer Not A Party In Interest

WASHINGTON, D.C. — The U.S. Supreme Court should affirm the finding by three courts that the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. does not have standing to object to the debtors’ reorganization plan because none of the insurer’s prepetition interests is affected by the plan, the debtors and asbestos claimants’ representatives tell the high court in respondent briefs on the merits.
January 29, 2024
W.Va. High Court Says Rulings In Chlorine Gas Coverage Suit Are Not Appealable

CHARLESTON, W.Va. — The West Virginia Supreme Court of Appeals dismissed an appeal filed by insurers in a coverage dispute over damages caused by the release of liquefied chlorine after determining that it lacks subject matter jurisdiction to review a circuit court’s findings that the insurers’ policy exclusions for wear and tear, faulty workmanship and pollution do not bar coverage for the damages because the lower court’s orders were not final appealable orders as required under West Virginia law.
January 25, 2024
Fact Issues Exist On Insureds’ Conduct, Insurer’s Handling Of Water Damage Claim

DENVER — A Colorado federal judge on Jan. 24 determined that portions of a breach of contract claim and a bad faith claim against a homeowners insurer can proceed because questions of fact exist as to whether the insureds provided the insurer with all requested information regarding their claim for water damages and whether the insurer acted unreasonably in handling the insureds’ claim.
January 24, 2024
9th Circuit Panel Majority Reverses Ruling On Pollution Exclusion’s Applicability

SAN FRANCISCO — The majority of the Ninth Circuit U.S. Court of Appeals on Jan. 23 reversed a district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris after determining that a potential for coverage exists because the mechanism of exposure does not clearly constitute an event that is commonly thought of as pollution event pursuant to California precedent.
January 24, 2024
Magistrate Judge Recommends Default Judgment, Sanctions Be Entered Against Insureds

HARRISBURG, Pa. — A Pennsylvania federal magistrate judge recommended granting an insurer’s motion for entry of default and motion for sanctions in a water and mold coverage suit because the insured homeowners have repeatedly refused to comply with a number of the court’s orders and the insurer has been prejudiced as a result of the insureds’ failure to comply with the court’s orders.
January 23, 2024
Dismissal Stipulated In Asbestos Coverage Dispute Involving Guaranty Association

COLUMBIA, S.C. — Remaining defendant insurers stipulated to dismissal in a South Carolina federal court of cross-claims by or against two defendant insurers that were previously dismissed from a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.
January 23, 2024
Insured Entitled To Depose Claims Handlers In Environmental Coverage Dispute

DETROIT — An insured seeking coverage for underlying environmental contamination suits is entitled to depose an insurer’s claims handlers because the information sought by the insured is relevant to the insured’s coverage claim and is relevant in determining whether the insurer acted in bad faith in handling the claim, a special master appointed by a Michigan federal court said in granting the insured’s motion to compel deposition testimony.
January 23, 2024
Insurer Removes Insured’s Complaint Seeking Coverage For Contamination Costs

TACOMA, Wash. — An insured alleges in an amended complaint, recently removed to Washington federal court, that its insurer breached its contract, acted in bad faith and violated Washington law by denying coverage for environmental liabilities and defense costs incurred as a result of contamination allegedly caused by the insured’s marine operations.
January 22, 2024
Infestation Exclusion Bars Coverage For Roof Damage, 4th Circuit Affirms

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Jan. 19 affirmed a Maryland federal court’s ruling that an insured’s claims for breach of contract and bad faith fail because the policy’s infestation exclusion precludes coverage for roof damage caused by an infestation of vultures.
January 22, 2024
High Court Refuses To Consider If Damage Caused By Insured’s Work Is Occurrence

WASHINGTON, D.C. — The U.S. Supreme Court denied a petition for a writ of certiorari on Jan. 22, refusing to consider whether the Third Circuit U.S. Court of Appeals rewrote Pennsylvania insurance law in its application of the faulty workmanship doctrine when it found that damages to natural gas wells caused by an insured’s fracking work does not constitute an occurrence under a commercial general liability policy.
January 22, 2024
Insureds Failed To Show Valid Basis For N.C. High Court Review, Insurer Argues

RALEIGH, N.C. — An insurer argued to the North Carolina Supreme Court that an appeals court’s ruling that affirmed a lower court’s dismissal of a clothing retailer insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic “presents no precedent-setting error that warrants intervention” by the North Carolina Supreme Court.
January 22, 2024
Panel Says District Court Properly Dismissed Insured’s Suit For Lack Of Jurisdiction

NEW ORLEANS — A district court properly dismissed a fire-suppressing foam distributor’s breach of contract and bad faith suit against its insurer, which denied coverage for a subpoena served on the insured in an underlying multidistrict litigation suit seeking damages for bodily injuries and contaminated drinking water caused by the use of the foam, because the lower court properly found that it lacked specific personal jurisdiction over the insurer, the Fifth Circuit U.S. Court of Appeals said.
January 16, 2024
Insureds Cannot Pursue Consequential Damages On Contract Breach Claim

CEDAR RAPIDS, Iowa — Insureds seeking coverage for mold remediation and property damages caused by a windstorm are not entitled to consequential damages on their breach of contract claim, an Iowa federal judge said Jan. 12 in granting the insurer’s motion for summary judgment.
January 16, 2024
Coverage Owed For Collapse Of Bricks Caused By Hidden Decay, Federal Judge Says

CHATTANOOGA, Tenn. — A Tennessee federal judge determined in a revised opinion that an insurer owes coverage for the collapse of bricks from a wall that occurred during a contractor’s renovations because the collapse was caused by hidden decay, a covered cause of collapse under the policy. However, the judge said questions of fact exist as to whether coverage is owed for the demolition of the remainder of the wall.
January 16, 2024
Pollution Exclusion Does Not Bar Coverage Based On Transportation Endorsement

BIRMINGHAM, Ala. — A commercial general liability policy’s pollution exclusion does not apply as a bar to coverage for underlying environmental contamination suits filed against an insured because the policy’s transportation endorsement exception adds back the coverage excluded by the policy’s pollution exclusion, an Alabama federal judge said in denying the insurer’s motion for summary judgment.
January 11, 2024
Hospital States Claim Under Health Care Endorsement, 1st Circuit Rules In Reversal

BOSTON — The First Circuit U.S. Court of Appeals ruled Jan. 10 that a hospital insured was subject to decontamination orders and, therefore, states a claim for “Disease Contamination Coverage” under its commercial property insurance policy’s Health Care Endorsement, reversing in part a federal court’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic.
January 10, 2024
Reinsurer Tackles Third-Party Beneficiary Theory In Cleanup Costs Coverage Row

PADUCAH, Ky. — Arguing in part that what it calls a newly asserted third-party beneficiary theory fails as a matter of law, a reinsurer filed a reply brief on Jan. 9 urging a Kentucky federal court to grant its summary judgment motion in a dispute over pollution-related cleanup costs.
January 08, 2024
New Jersey Panel Affirms Dismissal Of Wawa’s Coronavirus Coverage Dispute

TRENTON, N.J. — A New Jersey appeals court panel on Jan. 5 affirmed a lower court’s ruling dismissing with prejudice Wawa Inc.’s first amended complaint seeking coverage for its losses arising from the COVID-19 pandemic, finding that the court’s holdings and reasonings in Mac Prop. Grp., LLC v. Selective Fire & Cas. Ins. Co. apply to Wawa's commercial liability insurance policies and, therefore, no coverage is owed.