The ALI’s Recently Adopted “Restatement of the Law of Liability Insurance” Receives Mixed Reviews from Courts and Legislatures

The much-anticipated Restatement of the Law of Liability Insurance (RLLI) was recently approved by the American Law Institute (ALI) during its Annual Meeting in May 2018. Since its adoption, the RLLI has been met with mixed reviews from courts as well as at least one state legislatures. As discussed in previous blogposts, the RLLI is the ALI’s first publication in the field of insurance law and touches upon nearly every legal issue frequently faced by insurance professionals. Prior to its adoption,
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Illinois Appellate Court Reaffirms Trigger Date for Malicious Prosecution Offense Under Coverage B

In First Mercury Insurance Company v. Ciolino, the Illinois Appellate Court, First District waded into the sea-change concerning the trigger of coverage for malicious prosecution offenses under a liability policy. The First District joined the other districts to consider the issue, departed from the Seventh Circuit’s Erie prediction, and reasoned that the trigger date for malicious prosecution coverage will be similar under law enforcement liability and commercial general liability policies. The facts giving rise to the coverage dispute stem from
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In the Emerging Area of Insurance Coverage for Opioid Litigation, Ohio Court Finds No Coverage for Opioid Distributor Due to Past Claim

An Ohio federal court recently added to the limited, but growing, body of case law on insurance coverage for opioid litigation. In Miami-Luken, Inc. v. Navigators Insurance Co., No 1:16-cv-00876 (S.D. Ohio July 11, 2018), the court found that a specific litigation exclusion precluded coverage for a DEA action against an opioid distributor. Like many of the opioid coverage decisions thus far, this case stems from a 2012 lawsuit filed by the Attorney General of West Virginia against various opioid
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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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