Death of Carrie Fisher Likely Triggers Largest Contractual Performance Indemnity Policy

On December 27, 2016, Carrie Fisher, who was perhaps best known as Princess/General Leia Organa in the Star Wars Universe, passed away after a heart attack. As Star Wars fans and the world mourn Ms. Fisher’s passing, questions are swirling about how the Star Wars franchise will handle her death and the future of Princess Leia. Ms. Fisher finished shooting Episode VIII prior to her passing and was expected to have a part in Episode IX. What is clear now
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No Coverage for Innocent Insureds: West Virginia Supreme Court Decision Proves the Smallest Words Continue to Have Huge Impacts on Coverage

The distinction between the terms “the insured” and “any insured” in an insurance policy is a critical one and continues to spark coverage litigation. This distinction was key to the Supreme Court of Appeals of West Virginia’s recent decision denying coverage to parents sued in a wrongful death action arising from murder committed by their minor children. Answering certified questions from the federal court, the court held that the parents’ homeowners policies did not provide coverage because exclusions barring coverage
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Two Illinois Federal Decisions Highlight the Dangers of Consent Judgments for Insurers

Two related decisions handed down this year by an Illinois federal district court involve thorny issues emanating from a multi-million dollar consent judgment. In the first decision, the district court denied cross-motions for summary judgment brought by the insurer and the underlying claimant in relation to a $14 million consent judgment. Specifically, the district court held the reasonableness of the settlement could not be resolved by summary judgment. In order for a consent judgment to be reasonable, Illinois uses the
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Leaders of Major House Committee Wade into Equivalency Discussions

On August 17, 2016, the Chairman and Ranking Member of the House Ways and Means Committee waded into the ongoing discussions between U.S. and EU leaders regarding equivalency with the EU’s Solvency II and negotiation of a covered agreement. Chairman Kevin Brady and Ranking Member Sander Levin sent a letter to U.S. Treasury Secretary Jacob Lew and United States Trade Representative (USTR) Michael Froman expressing concern that Solvency II “unfairly discriminates against U.S. insurance and reinsurance (“(re)insurance”) business.” EU regulators
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Seventh Circuit Finds Coverage for State’s Suit Seeking Costs of Drug Addiction

States and municipalities around the country have sued pharmaceutical companies for their alleged role in increasing levels of addiction and overuse of pharmaceutical products. These suits have given rise to insurance coverage disputes over whether such claims are covered under the pharmaceutical companies’ policies. The U.S. Court of Appeals for the Seventh Circuit has now weighed in on one such dispute and held that West Virginia’s suit seeking recovery of costs it incurred to provide services to citizens addicted to
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Credit Card Payment Coverage Declined: Cyberinsurer Not Obligated to Reimburse P.F. Chang’s for PCI Liability

In the most significant cyberinsurance coverage decision to date, an Arizona federal district court in P.F. Chang’s China Bistro v. Federal Insurance Co., No. CV-15-01322-PHX-SMM (D. Ari. May 31, 2016), granted summary judgment to Federal Insurance Company, acknowledging it had no duty to reimburse P.F. Chang’s China Bistro for payment card industry liability assessments under the CyberSecurity policy issued by Federal to P.F. Chang’s corporate parent. This decision represents a significant victory for cyberinsurers insofar as it upholds insurers’ marketing
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Citizenship of Unincorporated Associations: Insurers Warned to Take Consistent Positions on Diversity Jurisdiction

Certain insurers must now give pause to the common practice of filing in or removing to federal court on the basis of diversity. The U.S. District Court for the District of Oregon recently mirrored the majority of federal jurisdictions in ruling that reciprocal insurance exchanges are unincorporated associations, which are deemed to be a citizen of every state in which it has members, or policyholders, regardless of whether those policyholders are involved in the litigation. In Staggs v. Farmers Insurance
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Insurers May Need a Doctor’s Note: Data Breach of Medical Records Triggers Coverage, Says Fourth Circuit

On Monday, April 11, 2016, the Fourth Circuit handed down a notable, albeit unpublished, decision with regard to an issue that has vexed the insurance industry, namely, do data breaches trigger a CGL insurer’s duty to defend under Coverage B? In Travelers Indemnity Company of America v. Portal Healthcare Solutions, L.L.C., the Fourth Circuit determined, under Virginia law, the underlying class action lawsuit, indeed, triggered Travelers’ duty to defend. The underlying lawsuit was a class action complaint filed against, in
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SCOTUS Orders Parties to Brief on Possible Compromise in ACA Case

On March 23, 2016, the U.S. Supreme Court heard oral arguments in Zubik, et al. v. Burwell, the case in which religious not-for-profits are challenging the process in which they can claim a religious exemption to the contraception requirement in the Affordable Care Act (ACA). On Tuesday, March 29, 2016, the court issued an unusual order hinting the court might be looking for some kind of compromise to deal with this highly controversial case. The court’s order requests supplemental briefing
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Georgia Joins Growing Consensus that Lead-Based Paint is a Pollutant

For the first time, the Supreme Court of Georgia declared that lead-based paint is a “pollutant” as the term is used in the absolute pollution exclusion of a commercial general liability policy. The plaintiff, Amy Smith, individually and on behalf of her daughter, sued her landlord, Bobby Chupp for injuries the daughter sustained as the result of ingesting lead from deteriorating lead-based paint at the house Smith rented from Chupp. Chupp held a CGL policy issued by Georgia Farm Bureau
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