Global Insurance Services Practice Group

All articles by Global Insurance Services Practice Group

 

Hold the Sauce: Insurer Must Indemnify Insured for Trade Disparagement and Defamation Claims Arising Out of Indian Sauce Recipe Dispute

Rass Corporation v. The Travelers Companies, Inc., No. 15-P-358, 2016 Mass. App. LEXIS 163 (Nov. 10, 2016), represents a continuation of Massachusetts law in the context of an insurer’s duty to defend, indemnify, and settle in good faith. Since the underlying settlement included covered and non-covered claims, the court concluded The Travelers Companies, Inc. and Travelers Property Casualty Companies of America were obligated to indemnify Rass Corporation for the amount the trial court allocated to covered claims. As background, Ranbir
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Don’t Skip Steps When Analyzing the Foundation for a Covered Claim: No Publication and No Use of Advertising Ideas Means No Duty to Defend Beauty School Dispute

Desabato v. Assurance Co. of America et al., No. 2:15-cv-484, 2016 U.S. Dist. LEXIS 135389 (W.D. Pa. Sept. 30, 2016) represents a continuation of Pennsylvania law in the context of an insurer’s duty to defend personal and advertising injury claims. As articulated in Desabato, Pennsylvania adheres to a strict four-corners analysis of an insurer’s duty to defend. Since the underlying complaint failed to allege the elements of defamation or misappropriation of advertising ideas, the court held Assurance Company of America,
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Insurers Beware: The Illinois Department of Insurance Issued a Notice of Proposed Rule Regarding Knowledge of Misrepresentations and False Warranties

In August, the Illinois Department of Insurance (DOI) proposed its second rule on misrepresentations and false warranties in less than two years. Citing various concerns, the DOI withdrew its December 2014 proposed rule nearly a year ago, in October 2015. The impetus for the new proposed rule appears to be the DOI’s perception that insurers are not considering “readily available information” before seeking to rescind insurance policies. The new proposed rule on misrepresentations would be promulgated as Ill. Admin. Code
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No, No, No: No Accident, No Property Damage, No Duty to Defend Under Illinois Law

Westfield Insurance Co. v. West Van Buren, LLC, et al., 2016 IL App (1st) 140862 represents a continuation of Illinois law in the context of an insurer’s duty to defend construction defect claims. As articulated in Westfield, accidental events are required to trigger a duty to defend and shoddy workmanship does not constitute property damage. In addition, since the underlying complaint did not seek damages for any personal property damage, the Illinois Appellate Court held Westfield Insurance Company had no
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Looking for Balance in Principle-Based Reserving

In a recent article in Law360, Frederick J. Pomerantz and Aaron J. Aisen, attorneys in Goldberg Segalla’s Global Insurance Services Practice Group, provide a comprehensive overview of Principle-Based Reserving and the reasoning behind the National Association of Insurance Commissioners’ decision to adopt this new system.  The NAIC recently announced it adopted the recommendation of the Principle-Based Reserving Implementation Task Force to switch to PBR starting Jan. 1, 2017. As Fred and Aaron write in their analysis, “There are still a number of outstanding issues
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Seventh Circuit Dispatches Insurer’s Coverage Defenses Against Ambulance Company

The Seventh Circuit affirmed a district court’s summary judgment in favor of an insured, finding that the insured may qualify as being in a “joint venture” with the named insured. In American Alternative Insurance Corp. v. Metro Paramedic Services, Inc. (Jul. 12, 2016), the issue confronting the court was whether allegations in the underlying complaint that the named insured and putative insured were engaged in a joint venture also satisfied the policy’s use of the term “joint venture,” at least
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Insurer Accused of Having Ace Up its Sleeve: Insurer Estopped from Relying on Sublimit Due to Defense Counsel’s Failure to Supplement Discovery Responses in Tort Lawsuit

In Harwell v. Fireman’s Fund Insurance Co. of Ohio, 2016 IL App (1st) 152036, the Illinois Appellate Court refused to allow Fireman’s Fund Insurance Company to assert a policy sublimit because defense counsel retained by Fireman’s Fund to represent its insured in the underlying tort lawsuit failed to inform the tort claimant that the sublimit, and not the full limit, applied. As background, Brian Harwell was injured while working at a construction project supervised by Kipling Development Corporation as a
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A Short-Lived Victory For MetLife Over SIFI Designation?

Frederick J. Pomerantz and Aaron J. Aisen, attorneys in Goldberg Segalla’s Global Insurance Services Practice Group, analyzed the recent decision that granted MetLife’s motion to remove the non-bank SIFI designation imposed by the Financial Stability Oversight Council (FSOC). The decision marked the first time a SIFI-designated company challenged the designation, which the court overturned on three grounds all based on principles of administrative law. As Fred and Aaron write in their analysis for Law360, “The implications of this decision for MetLife
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You Can’t Keep it Bottled Up: Defective Bottle Cap = Defective Bottled Product

The Appeals Court of Massachusetts held that a first-party property policy’s ensuing loss provision did not restore coverage for the non-defective contents of a bottle rendered unsaleable by defective bottle caps.  Since the product contained in the bottle could not be separated from the defective bottle cap, the whole product was defective and excluded from coverage. In 2008, a manufacturer entered into an agreement with a company to manufacture a milk-based shelf-stable protein drink designed to require refrigeration only after
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Below Limit Settlement Obliterates Excess Coverage

In Martin Resource Management Corporation v. AXIS Insurance Company, an excess insurer was held by the United States Court of Appeals for the Fifth Circuit to have no obligation to indemnify its insured under the terms of its excess insurance policy after the insured settled with its primary insurer for an amount below the primary policy limits. The insured had sought coverage from both its primary and excess policies for the cost of defending underlying litigation in Texas state court.
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One Detached Dump Truck, Three Occurrences: The “Unfortunate Event” Test in New York

One of the key issues in many insurance disputes is the number of “occurrences,” which are presented by a particular set of facts relating to a claim submitted by the policy holder. In its recent decision of Nat’l Liab. & Fire Ins. Co. v. Itzkowitz, the Second Circuit was called upon to determine whether the events surrounding an incident on the highway involving three separate vehicles were part of one single occurrence under New York law. The events surrounding this
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Keeping Up with the Times: Nevada Supreme Court Declares Under What Circumstances Insurers Must Provide Independent Counsel

In an opinion issued on September 24, 2015, the Nevada Supreme Court addressed the issue of under what circumstances an insurer is obligated to provide its insured with independent counsel. The case, State Farm Mut. Auto. Ins. Co. v. Hansen, arises out of injuries sustained by Hansen while attempting to leave a house party. A number of guests at the party were crowding around and sitting on Hansen and his companions’ vehicle in an attempt to prevent them from leaving.
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A Different Track: Mississippi Supreme Court Affirms Voiding of Auto Policy for Failure to Disclose 16-Year Old Son

Contrary to many states, which are reluctant to void automobile policies, the Mississippi Supreme Court in Jones v. Safeway Insurance Company, Case No. 2014-CA-00180-SCT, 2015 Miss. ELXIS 456 (Sept. 3, 2015), upheld the voiding of an automobile liability policy because the named insured failed to disclose her 16-year old son. In a win for insurers, it held that auto policies should be treated as any other insurance contract. The relevant facts are as follows: Michelle Busby applied for and obtained
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Request Denied: Constitutionality Challenge of the No-Fault Automobile Insurance Act (NFAIA) Overruled in Minnesota

The No-Fault Automobile Insurance Act’s mandatory arbitration requirement of claims for $10,000 or less is now confirmed to be constitutional, according to the judgment delivered recently by the Court of Appeals of Minnesota in Unger v. AAA Ins. Co., No. A14-1885 (Minn. Ct. App. Aug. 10, 2015). Ruth and Amanda Unger were injured in a car accident after which they received chiropractic care and physical therapy. A few months later, however, AAA Insurance Company seized payment of on-going benefits and
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New Law and a New Trial: Eleventh Circuit Overturns Florida Court Judgment Against GEICO in Bad Faith Lawsuit

On Wednesday, August 19, 2015 the Eleventh Circuit issued a significant ruling that allows evidence to be introduced at trial regarding previous decisions in that litigation, as well as changes in coverage law. In doing so, it vacated a $5 million bad faith judgment against GEICO General Insurance Co. (GEICO) from the U.S. District Court for the Southern District of Florida. The lawsuit arises out of an automobile accident that occurred in 2006. The plaintiff represented the estate of a
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Eleventh Circuit Limits Court’s Consideration of Motion to Dismiss To the Complaint

In Twin City Fire Insurance Co. v. Hartman, Simons & Wood, LLP, 2015 U.S. App. LEXIS 6092 (11th Cir. Apr. 15, 2015), the U.S Court of Appeals for the Eleventh Circuit reversed a lower court ruling and held that a professional liability insurer was not barred from recovering some, or all, of a $10 million settlement it paid on behalf of its insured due to the affirmative defenses of waiver and voluntary payment. Twin City Fire Insurance Company (Twin City)
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Lead Paint is Not an Excluded Pollutant in CGL Pollution Exclusion

In a personal injury action involving ingestion of lead-based paint in the house the claimant rented from the insured, the majority of the First Division Georgia Court of Appeals held that a policy’s pollution exclusion does not bar coverage for underlying personal injury claims, because lead-based paint was not specifically listed as a pollutant in the policy. Therefore, the exclusion did not exclude coverage for injuries arising out of the ingestion or inhalation of lead-based paint. This decision reversed the
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Texas Federal District Court Holds Both Professional Liability Insurers on the Hook for Insured’s Defense

In Corinth Investors Holdings, LLC v. Evanston Insurance Co., 2015 U.S. Dist. LEXIS 36273 (E.D. Tex. Mar. 24, 2015), the U.S. District Court for the Eastern District of Texas held that two professional liability insurers were both on the hook to defend an insured in an action where notice of the claim could have been received under separate, concurrent insurance policies issued by the two entities. Corinth Investors Holdings, LLC, d/b/a Atrium Medical Center was the named insured under a
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The “Reinsurance Professional’s Deskbook: A Practical Guide” is now available

The Reinsurance Professional’s Deskbook: A Practical Guide, a new treatise featuring Goldberg Segalla founding partner Thomas F. Segalla as editor, is now available for purchase. Co-produced by leading legal publisher Thomson Reuters and DRI – The Voice of the Defense Bar, the largest organization of defense lawyers in the country, the deskbook is a comprehensive resource that explores in depth traditional insurance and reinsurance concepts as well as emerging trends in today’s insurance markets, with a focus on practical assessment
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Reinsurance Review is Now Available

For a free copy of the latest edition, click here.  Goldberg Segalla’s Reinsurance Review provides timely summaries of and access to the latest reinsurance law developments worldwide. For ease of reference, we have organized the cases by court and date. In addition, we provide the latest information regarding news in the insurance and reinsurance industries. To receive this publication for free, please contact Jeff Kingsley at jkingsley@goldbergsegalla.com.
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Colorado Supreme Court Holds Notice-Prejudice Rule Inapplicable to Notice Requirement in Claims-Made Policies

In Craft v. Philadelphia Insurance Co., 2015 CO 11 (Feb. 17, 2015), the Colorado Supreme Court held that the notice-prejudice rule (an insured who gives late notice of a claim to his/her insurer does not lose coverage benefits unless the insurer proves resultant prejudice) does not apply to claims-made insurance policies with date-certain notice requirements. In the underlying action, Dean Craft was the principal shareholder and present of Campbell’s C-Ment Contracting, Inc. (“CCCI”). Craft agreed to sell some of his
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Goldberg Segalla Adds N.C. Office, and Lawyers in Philly and London, to Meet Growing Global Insurance Industry Demand

Leading global law firm Goldberg Segalla today unveiled a series of significant moves that will continue to enhance the depth and range of services it offers its international client base. The firm announced that today it will open an office in North Carolina, signaling expansion into the Southeastern U.S., and that its Philadelphia office will be joined by a trio of prominent insurance coverage attorneys. Goldberg Segalla’s London office will also see the addition of a key legal representative of
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Schism Between Groups of Asbestos Claimants Following $358 Million Garlock Settlement

In a $358 million dollar agreement, which has drawn nationwide attention from insurers and other companies with asbestos liabilities, Garlock Sealing Technologies has agreed to settle all asbestos claims against the company. This agreement was made possible largely because of evidence that lawyers fraudulently inflated judgments and settlements. This development may aid other insurers and companies with asbestos liabilities to dispute similar claims brought by asbestos lawyers. Garlock Sealing Technologies is a wholly owned subsidiary of EnPro Industries, Inc., which
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Schism Between Groups of Asbestos Claimants Following $358 Million Garlock Settlement

In a $358 million agreement, which has drawn nationwide attention from insurers and other companies with asbestos liabilities, Garlock Sealing Technologies has agreed to settle all asbestos claims against the company.  This agreement was made possible largely because of evidence that lawyers fraudulently inflated judgments and settlements.  This development may aid other insurers and companies with asbestos liabilities to dispute similar claims brought by asbestos lawyers. Garlock Sealing Technologies is a wholly owned subsidiary of EnPro Industries, Inc., which manufactured
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South Carolina Supreme Court: Medical Malpractice Statute of Repose Bars Claims for Equitable Indemnity

In Columbia/CSA-HS Greater Columbia Healthcare Sys., LP v. S. Carolina Med. Malpractice Liab. Joint Underwriting Ass’n, 2015 WL 249536 (S.C. Jan. 21, 2015), the Supreme Court of South Carolina affirmed two lower courts’ constructions of the medical malpractice statute of repose and barred a hospital from seeking indemnification from an ER doctor who misdiagnosed a patient, despite a strong dissent by two justices, including Chief Justice Toal. In May of 1997, patient Arthur Sharpe sought medical treatment in Providence Hospital’s
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The Importance of Aesthetics: Minnesota Supreme Court Weighs in on Matching Colors

In Cedar Bluff Townhome Condo. Ass’n v. American Family Mutual Insurance Company, 2014 Minn. LEXIS 661 (Minn. Dec. 17, 2014), the Minnesota Supreme Court held that a property insurer was on the hook for replacing all the siding of certain apartment buildings, whether damaged or undamaged, when matching replacement siding for the damaged portions could not be found due to the faded coloration of the existing siding.  American Family Mutual Insurance Company (AFMIC) insured 20 multi-unit residential buildings owned by
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Florida Court Refuses To Enforce Employment Related Practices Exclusion Against Defamation Claim Under Coverage B

In Khatib v. Old Dominion Insurance Co., 2014 Fla. App. LEXIS 19843 (Fla. DCA 1st Dist. Dec. 5, 2014), the Florida Court of Appeal held that Old Dominion Insurance Company (Old Dominion) did not have a duty to defend its insureds against a defamation claim.  As background, the insureds, directors and officers First Coast Cardiovascular Institute (FCCI), filed suit against Dr. Majdi Aschi for fraud, negligently supplying false information, breach of contract, reformation, unjust enrichment, breach of fiduciary duty, and
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New Jersey Federal District Court Sheds Light on “Use of Motor Vehicle” Standard in New Jersey Omnibus Statute

In Carolina Casualty Insurance Co. v. Travelers Property Casualty Co., Civ. No. 09-4871, 2014 U.S. Dist. LEXIS 150002 (Oct. 22, 2014), the United States District Court for the District of New Jersey interpreted the “use of a motor vehicle” standard under New Jersey’s omnibus motor vehicle insurance statute in finding coverage under a commercial auto policy.  The decision represents a liberal and broad interpretation of commercial auto policies triggering coverage – even where none arguably exists – for public policy
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Lack of Authentication of Assignment of Insurance Proceeds Costs Insured Party $1.2 Million

In Warehousing v. Auto-Owners Ins. Co., 2014 U.S. App. LEXIS 18058 (11th Cir. Sept 22, 2014), the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court ruling which held that an insured party’s failure to authenticate a document allegedly transferring the right to $1.2 million in insurance proceeds warranted a grant of summary judgment against it. Max Warehousing LLC owned a warehouse property insured by Auto-Owners Insurance Company that Max leased to third parties. Embassy National Bank
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‘Close Enough’ Disclosure During Claim Investigation Earns Homeowner Reversal of Coverage Denial Under Fire Policy

In Rose v. State Farm Fire & Cas. Co., 2014 U.S. App. LEXIS 17312 (6th Cir. Sept. 8, 2014), the Sixth Circuit Court of Appeals reversed and remanded a lower court ruling holding an insured was not entitled to coverage under a fire insurance policy because the he had provided false information regarding his financial status in the post-fire claim investigation. Richard Rose was an Ohio homeowner whose house burned down.  State Farm insured Rose through a homeowner’s policy.  That
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Court Finds TCPA Violations Do Not Relate to Other Lawsuits Involving Non-TCPA Claims

The Superior Court of Delaware, New Castle County, ruled that RSUI Indemnity Company owed its insured, Sempris, LLC, a duty to defend and indemnify against an underlying TCPA lawsuit pending in the United States District Court for the Northern District of Illinois. RSUI Indem. Co. v. Sempris, LLC, C.A. No. N13C-10-096, 2014 Del. Super. LEXIS 449 (Sept. 3, 2014). The coverage dispute arose out of the following circumstances.  RSUI issued a D&O liability policy to Sempris effective from March 1, 2013
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District Court Finds Sale of Knock Off Fendi Products Does Not Constitute “Advertising Injury”

The United States District Court for the Southern District of New York ruled that United States Fidelity & Guaranty Co. (USF&G) had no obligation to indemnify its insured, Ashley Reed, for a judgment of $30 million stemming from its sale and distribution of counterfeit Fendi products. United States Fid. & Guar. Co. v. Ashley Reed Trading, Inc., No. 11 Civ. 4782, 2014 U.S. Dist. LEXIS 116280 (S.D.N.Y. Aug. 20, 2014). The coverage dispute arose out of the following circumstances. USF&G issued
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Obama Administration Seeking Full D.C. Circuit Rehearing to Address Obamacare Circuit Split; Plaintiffs in Fourth Circuit Seek Cert from Supreme Court

On Friday, August 1, the Obama Administration filed its much anticipatedpetition for rehearing en banc with the D.C. Circuit in Halbig v. Burwell.  The petition asks for the full D.C. Circuit bench to reconsider and overturn the original ruling by the three judge panel based on a what the Administration has characterized as a misconstruction of the statutory language at issue. The D.C. Circuit’s three judge panel determined that the Affordable Care Act provision permitting subsidies unambiguously restricts its applicability
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DC Circuit Holds Temporary Nurses are ‘Employees’ for Purposes of Hospital’s General Liability Policy

In Interstate Fire & Casualty Company v. Washington Hospital Center Corp., the D.C. Circuit Court of Appeals affirmed a lower court decision holding that a temporary nurse hired to work at the Washington Hospital Center (the hospital) by a staffing agency was an “employee” of the hospital and therefore an “insured” under the Hospital’s general liability policy. The hospital carried a $5 million general liability policy issued by Greenspring Financial Insurance Company. This policy defined an “insured” as “all past,
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Fifth Circuit Rejects Argument That Total Pollution Exclusion Creates Illusory Coverage

The Fifth Circuit affirmed the district court’s grant of summary judgment in favor of Liberty Mutual, finding that Liberty Mutual had no duty to defend or indemnify Linn Energy in connection with the underlying lawsuit, which alleged leakage of saltwater, brine and other contaminants from Linn Energy’s pipeline onto the complainants’ properties.  Notably, the Liberty Mutual policy issued to Linn Energy contained an Underground Resources and Equipment Coverage endorsement, which included in the definition of “property damage” damage to particular
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‘Super Sized’ Ruling: IL Federal Court Upholds Application of ‘Super’ Intellectual Property Exclusion Under Coverage B

In Hartford Casualty Insurance Company v. Dental USA, Inc., No. 13-C-7637, 2014 U.S. Dist. LEXIS 85529 (N.D. Il. June 24, 2014), the United States District Court for the Northern District of Illinois recently upheld as enforceable and not against public policy a “super” intellectual property exclusion. The coverage dispute arose out of the following circumstances.  Since 2008, Dental USA, Inc. had been insured by Hartford Insurance Company, which issued general liability policies for Dental’s business as a supplier of dental
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Mining Operations Exclusion Applies, but Only to Excess Layers

The Tenth Circuit overturned the lower court’s decision that would have freed a liability insurer from covering damages allegedly caused by its insured brine well operator. Specifically, the insured was alleged to have been negligent in causing destabilization of various structures caused by an underground cavern.  This insurer issued primary and numerous excess/umbrella policies. Initially, the insurer was not responsible for providing coverage due to an umbrella provision that excluded coverage due to damage or loss of use of property
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Professional Liability Monthly – March Edition is Now Available

Case analysis in this edition of Professional Liability Monthly include: Court Refuses Design Professional’s Bid to Avoid Liability Reliant on Future Inspection or Approvals A Plaintiff’s Complaint Alleging Defamation and Violations of Connecticut’s Unfair Trade Practices Act Is Stricken Under the Absolute Litigation Privilege Pennsylvania Enacts Benevolent-Gesture Bill Into Law Evidence of Informed Consent Inadmissible in Medical Malpractice Case Case of First Impression: Plaintiffs Lack Standing to Bring Malicious Prosecution/Vexatious Litigation Actions Against Attorneys and Attorneys’ Clients Court Finds Theory of Apparent
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LIMA: A New Liability Exit Strategy Comes to the U.S.

On February 19, Vermont Governor Peter Shumlin signed the Legacy Insurance Management Act (LIMA). The law enables a non-admitted insurer in the U.S. or abroad to transfer closed blocks of commercial insurance/reinsurance business with outstanding liabilities, together with the reserves relating to those liabilities, to Vermont-admitted insurers or other investors. These Vermont entities would then assume all financial and legal liabilities associated with these insurance policies/reinsurance agreements. This law, the first of its kind in the U.S., creates a legal,
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LSE Report Predicts Stormy Weather for UK’s Flood Re Scheme

A recent report by the London School of Economics and Political Science provides for a stormy forecast for Britain’s new proposed flood insurance programme, largely in part due to climate change. Flooding is perhaps one of the biggest natural disasters the UK faces. However, the ability to insure against this risk has provided uneven and ineffective results, much like it has in other places including the U.S. Consequently, the UK government and the Association of British Insurers (ABI) have a
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Good News: Well Drafted Warranties Do Work

Amlin Corporate Member Limited and Others v. Oriental Assurance Corporation [2013] EWHC 2380 (Comm) A dispute between London reinsurers and their Philippine reinsured arose from the sinking of a ferry, the “Princess of the Stars,” in the Philippines on June 21, 2008.  The loss occurred because the master of the ship sailed into the midst of typhoon “Frank,” despite public storm warnings having been issued by the Philippine authorities the previous day.  It seemed that the master of the ship
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Dear John: Attorney Not Required to Disclose Letter From Dissatisfied Client in Application for Malpractice Policy

Illinois State Bar Association Mut. Ins. Co. v. Gold (Ill. Ct. App. Aug. 7, 2013) An Illinois appellate court recently held that a letter from a dissatisfied client to his attorney did not amount to a potential claim requiring disclosure on the attorney’s application for malpractice coverage. In 2004, the defendant attorney received a letter from his client expressing dissatisfaction with the attorney’s handling of his case. In the letter, the client outlined different options for moving forward, including that
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U.K. Court Puts Insurer to Bed Over Blanket Notification

McManus Seddon Runhams v European Risk Insurance Company, [2013] EWHC 18 (Ch)  A recent United Kingdom decision from the High Court of Justice held blanket notifications valid to claim coverage under a professional indemnity insurance (PII) policy. The case provides helpful guidance to law firms with PII on what constitutes a valid notification of circumstance under a PII policy. In October 2010, the law firm of McManus Seddon Runhams (McManus) acquired Sekhon Firth (Sekhon). By May 2012, McManus discovered 17
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U.K. Court puts Insurer to Bed Over Blanket Notification

McManus Seddon Runhams v European Risk Insurance Company, [2013] EWHC 18 (Ch) A recent United Kingdom decision from the High Court of Justice held blanket notifications valid to claim coverage under a professional indemnity insurance (PII) policy. The case provides helpful guidance to law firms with PII on what constitutes a valid notification of circumstance under a PII policy. In October 2010, the law firm of McManus Seddon Runhams (McManus) acquired Sekhon Firth (Sekhon). By May 2012, McManus discovered 17
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Reinsurers Kept on the Hook Despite Cedent’s Settlement in $28 Million Kuwait Oil Claim

Beazley Underwriting Limited and others v Al Ahleia Insurance Company and other companies [2013] EWHC 677 (Comm) This case centers on the relationship between cedents and reinsurers and compliance with a claims control clause which requires the cedent to allow the reinsurers to control aspects of claim handling. In this case the claimant reinsurers claim they are not liable under the reinsurance policy while the cedents assert that the reinsurer owes coverage. By way of background, on October 3, 2005
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Eleventh Circuit Affirms Use of Extrinsic Evidence to Decide Duty to Defend

Am. Safety Indem. Co. v. T.H. Taylor, Inc., et al., (Index No. 11-12245) (11th Cir.) In a majority decision, the Eleventh Circuit endorsed the use of evidence extrinsic to an arbitration complaint for the purpose of determining an insurer’s duty to defend.  In Am. Safety Indem. Co. v. T.H. Taylor, Inc., et al., (Index No. 11-12245), the insurer issued a CGL policy to a general contractor who was hired by certain land owners to construct a residence on their behalf
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Florida Widens Insurer’s Liability for Defense Costs

An intermediate appeals court in Florida held that an insurer’s decision to refuse separate independent counsel for an additional insured (AI) was wrong and awarded the AI indemnification for attorney’s fees and costs for independent counsel.  In University of Miami v. Great American Assurance Company, etc., (No. 3D09-2010, Florida Third District Court of Appeal), the insured ran a summer swim camp on the AI’s campus.  The claimant sued both entities for lack of supervision, claiming bodily injuries from being pulled
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Insurers Still Allowed to Rely on ‘Basis For Contract’ Clauses Despite Their Impending Abolition by The Law Commission

Genesis Housing Association limited v. Liberty Syndicate Management Limited [2012] EWHC 3105 (TCC) This recent decision looks at a type of clause in an insurance contract called a “basis of contract” clause found in some contracts of insurance or proposal forms and which will soon be unavailable to insurers in the UK.   The effect of this clause is to convert any comments made by the insured or the person seeking insurance into warranties.  A breach of a warranty will release
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Hurricane Sandy: Déjà vu on business interruption losses issues? How a 2010 UK case might give some answers.

In the wake of the damage and destructions caused by Hurricane Sandy many policyholders (and insurers and reinsurers) are currently checking what is likely or not likely covered under their policies.  Particularly, with commercial property or business, the main issue seems to be whether and how business interruption losses are covered.  Problems can arise when an insured suffered loss of revenue which was not necessarily caused by the damage to the insured property. Interestingly, this very issue of business interruption
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District Court Holds That Sworn Statements Are Not Covered By Lloyd’s E&O Policy

On July 27, U.S. District Judge Michael Mills for the Northern District of Mississippi held that Lloyd’s of London would not be required to defend Mid-Delta Insurance Agency, Inc. (MDIA) under an errors and omissions policy against claims that MDIA employee Randal Henson made misrepresentations to an insurer. Initially, MDIA and Henson filed suit in an attempt to force Lloyd’s and the United States Liability Insurance Co. to defend them against allegations that Henson misrepresented information on a client’s application
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