Depositing Policy Limits Does Not End the Duty to Defend

An Oregon federal court revisited a common coverage question that comes up from time to time: When indemnity for a loss is reasonably clear, can an insurer limit its defense expense exposure by simply depositing the policy limits with the court? The answer, according to this court, and most other courts around the country, is no.[1] The liability policy in U.S. Fire Ins. V. Mother Earth School contained the commonly-found insuring agreement language which provides, in relevant part, that an
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No Defense Owed to Insured for Mediation Involving Environmental Contamination

The Illinois Appellate Court recently held that the term “suit” in a commercial general liability policy does not include a pre-suit mediation between the insured and others over the allocation of costs incurred to remediate environmental contamination. As a result, the court ruled that the insurers had no obligation to reimburse the insured for its legal fees incurred in the mediation.[1] The insured operated a manufacturing facility on a property that was eventually declared a Superfund site by the U.S.
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Eleventh Circuit: When an Insurer Has a Duty to Defend, Its Duty to Indemnify Is Not Ripe Until Resolution of the Underlying Lawsuit

With limited exception, an insurer that owes a duty to defend to its insured cannot litigate whether it also has a duty to indemnify the insured for the same matter until after the insured’s liability has been resolved. In a unanimous decision, the U.S. Court of Appeals for the Eleventh Circuit, applying Florida law, affirmed this principle and held that an insurer’s duty to indemnify is not justiciable until the insured’s liability has been adjudicated in the underlying case. Mid-Continent Cas. Co.
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Wisconsin Top Court Limits “Knowing Violation” Exclusion By Looking Beyond Facts Alleged in Complaint

In a decision that could expand the scope of the duty to defend, the Wisconsin Supreme Court recently held that a “knowing violation of the rights of another” exclusion did not apply even though the facts alleged suggested that it should. The court looked beyond the four corners of the complaint, which alleged willful and intentional conduct, and held that the insurer owed a duty to defend because some causes of action asserted in the complaint could potentially be satisfied
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Read the Fine Print: Contingent Coverage is Not Excess Coverage

In Bartowiak v. Underwriters at Lloyd’s, London, 2015 IL App (1st) 133549 (August 31, 2015), the Illinois Court of Appeals ruled that the defendant-insurer did not have a duty to defend or indemnify the plaintiff in underlying wrongful death action pursuant to a contingency liability policy. On October 31, 2009, a truck delivering road-resurfacing material struck and killed a road-construction worker. The decedent’s wife sued the truck driver, the trucking company, and the truck broker. The truck driver had a
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Are You My Agent? Insured’s Notice to Broker Deemed Sufficient

In First Chicago Insurance Company v. Molda and Wilson, 2015 IL App. (1st) 140548, First Chicago appealed an adverse verdict finding that it had a duty to defend its insured in the underlying lawsuit. The Appellate Court affirmed the district court’s ruling, finding, in pertinent part, that the insured’s notice of the claim and suit were proper and timely. The insured’s employee, Molda, was involved in an automobile collision while driving as a salesman for the policyholder, Metrolift. First Chicago
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Violation of Statutes Exclusion Bars Coverage for Ancillary TCPA Claims

In Emcasco Insurance Co. v. CE Design, Ltd., the U.S. Court of Appeals for the Tenth Circuit Court granted summary judgment to Emcasco, finding it had no duty to defend the insured against a junk fax suit. In doing so, the court joined a number of jurisdictions holding that an ISO exclusion in a commercial general liability policy applies to all claims that arise, even indirectly, from violations of the Telephone Consumer Protection Act (47 U.S.C. § 227). As background,
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Blast from the Past: First Circuit Reverses Dismissal of Coverage Dispute Concerning 50-Year Old Missing Policy

In Cardigan Mountain School v. New Hampshire Insurance Co., 2015 U.S. App. LEXIS 8725 (1st Cir. May 27, 2015), the U.S. Court of Appeals for the First Circuit reversed the dismissal of an action based on events that occurred nearly 50 years ago, nixing the ruling that the lawsuit failed to state a claim under Rule 8 of the Federal Rules of Civil Procedure. The First Circuit instead held that the complaint survives dismissal by pleading the existence of an insurance
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Illinois Appellate Court Determines Unsigned Agreement Can Still Constitute a Written Contract and Trigger Additional Insured Coverage

In West Bend Mutual Insurance Co. v. DJW-Ridgeway Building Consultants, Inc., 2015 IL App (2d) 140441 (May 19, 2015), the Illinois Appellate Court, Second District affirmed a trial court decision and held that West Bend Mutual Insurance Co. had the duty to defend DJW-Ridgeway Building Consultants, Inc. (Ridgeway) as an additional insured. The underlying dispute arose out of any injury suffered by a construction worker at a worksite where Ridgeway was the general contractor. Ridgeway subcontracted with Jason the Mason,
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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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