Pennsylvania Court Rejects Manifestation Trigger for Latent Property Damage Claims

The Commonwealth Court of Pennsylvania recently determined that the multiple trigger rule, and not the manifestation rule, is the proper standard to use when determining whether an insurance policy is triggered in an environmental property damage claim involving a long latency period between exposure and manifestation. See Pennsylvania Manufacturers’ Association Insurance Company v. Johnson Matthey, Inc., et al., 2017 WL 1418401 (Pa. Commw. Ct. Apr. 21, 2017), This decision, which is at odds with statements by the Pennsylvania Supreme Court
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Anticipated Decision in Heinz Rescission Litigation Upholds Ruling Voiding $25 Million Insurance Policy Due to Misrepresentations in the Application

In a much anticipated decision, the Third Circuit Court of Appeals upheld the rescission of H.J. Heinz Company’s $25 million production contamination insurance policy because Heinz made material misrepresentations concerning previous product contamination claims when it applied for the policy. H.J. Heinz Company v. Starr Surplus Lines Insurance Company, No. 16-1447 (3d Cir. Jan. 11, 2017). The fact that Heinz’s application misrepresented its history of prior contaminations losses was clear. The insurer’s application asked Heinz to disclose past complaints, recommendations,
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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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Pennsylvania Federal Court Sets Standards for Burden of Proof in Rescission Matter

The ongoing coverage litigation between H.J. Heinz Company and Starr Surplus Lines Insurance Company in the U.S. District Court for the Western District of Pennsylvania has yielded another important decision that is instructive in rescission matters.  As a follow up to our previous report on October 22, 2015 on the court’s order that Starr must produce information from its underwriting files involving other policyholders, the court has now set guidelines for the burden of proof and jury instructions in the
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Pennsylvania Federal Judge Orders an Insurer to Produce Information from Underwriting Files Involving Other Policyholders in a Rescission Dispute

Discovery disputes in insurance coverage litigation frequently concern whether an insurer must produce information about policies issued to other policyholders or other claims against the insurer involving similar policies or circumstances. Policyholders often seek such discovery to compare the insurer’s position in the disputed claim with positions it may have taken in other claims or under other policies. Insurers typically resist such discovery as being irrelevant to issues involving the particular policy or claim at issue in the litigation. A
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Pennsylvania Supreme Court Holds that an Insurer’s Consent to Settle is Not Required if Insurer Is Defending Under Reservation of Rights

The Pennsylvania appellate courts have kept insurance coverage lawyers on their toes this summer. Weeks after the Pennsylvania Superior Court’s decision in Selective Way Insurance Co. v. Hospitality Group Services, Inc. provided guidance on when the statute of limitations for an insurance coverage declaratory judgment action accrues, on July 21, 2015, the state’s Supreme Court issued its much anticipated decision in Babcock & Wilcox Company v. American Nuclear Insurers. In Babcock & Wilcox, the Supreme Court held that when an insurer
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In Pennsylvania, a Cause of Action for Declaratory Judgment Accrues When an Insurer has Sufficient Facts to Believe that its Policy Does Not Provide Coverage

When an insurer is asked to cover a liability claim for which coverage is in doubt, the prudent course of action is to provide a defense subject to a reservation of rights. The reservation of rights preserves the insurer’s ability to deny coverage, for either defense and indemnity, if it is determined that the claim is not covered under the policy. In many instances, a reservation of rights is accompanied with the filing of a declaratory judgment action in which
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Tracking the Uncertainty of the 2016 ACA Health Insurance Rates

Health insurers have begun submitting their proposals for approval of next year’s health insurance rates. For hundreds of Affordable Care Act (ACA) plans, the proposed rates are up by more than 10 percent with insurers seeking increases of upwards of 49 percent for some products. Insurers have cited to increases in drug costs and the receipt of more accurate data on their insureds in support of the proposed rates. Between now and October 2015, when the final rates are published,
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Illinois Appellate Court Extends Bridgeview on Choice of Law and Finds No Duty To Defend Against Blast Fax Suit

After vacating its prior decision pursuant to an order by the Illinois Supreme Court, the Appellate Court of Illinois, Second District, in G.M. Sign, Inc. v. Pennswood Partners, Inc. 2015 IL App (2d) 121276-B, determined that the insurers, Maryland Casualty Company and Assurance Company of America (collectively “Zurich”), had no duty to defend or indemnify Pennswood Partners, Inc., with respect to a blast fax case filed by G.M. Sign, Inc. The crux of the Appellate Court’s decision was how to
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PA Supreme Court Clarifies Trigger of Coverage for Injury to Livestock

The Supreme Court of Pennsylvania recently interpreted the trigger of coverage applicable to property damage, including the first manifestation and multiple trigger approaches.  The Supreme Court held in Pennsylvania National Mutual Casualty Insurance Co. v. St. John, 2014 WL 7088712 (Pa. Dec. 15, 2014),  that, under the “first manifestation” theory, an injury triggers coverage under the policy in effect when the injury or damage is discovered, regardless of the insureds’ knowledge to its cause.  Additionally, the court refused to extend
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