Material misrepresentations deprived insurer of freedom of choice in underwriting risk. The United States Court of Appeals for the Third Circuit, applying New York law, upheld the district court and held that H.J. Heinz Company (“Heinz”) made material misrepresentations in its application for insurance to Starr Surplus Lines Insurance Company (“Starr”).  The court rejected Heinz’s argument that Starr waived the... Read More

2nd Cir. finds Northrop Grumman provided inadequate and untimely notice under NY law. The United States Court of Appeals for the Second Circuit, applying New York law, upheld the district court and ruled that Northrop Grumman’s (“Northrop”)  notice to Travelers Indemnity Company and related entities (“Travelers”) and Century Indemnity Company (“Century”) (collectively, “the insurers”) for environmental pollution claims was either... Read More

Target Covered As Additional Insured Under Vendor’s Policy, Even Though Agreements With Vendor Conflicted Regarding Requirement To Provide Such Coverage The Seventh Circuit, applying Illinois law, held that Target Corporation (“Target”) was entitled to coverage under one of its vendor’s CGL policies for a claim by a customer injured by a falling dressing room door, pursuant to a side agreement... Read More

9th Cir. asks CA Supreme Court if public policy should override when outcome-dispositive in excluding coverage. The Ninth Circuit has asked the California Supreme Court if public policy encompasses California’s notice-prejudice rule, thereby overriding a New York choice-of-law provision in a policy that would have barred coverage for a pollution claim where the policyholder failed to provide timely notice and... Read More

South Carolina Supreme Court finds “generic,” “cut and paste” letter failed to adequately state basis for non-coverage. The South Carolina Supreme Court, applying South Carolina law, held that an insurer’s reservation of rights was ineffective because it  failed to adequately inform the insured of the reasons why the insurer may not be obligated to provide coverage.   As a consequence of... Read More

 McLean County, Illinois, Mesothelioma After a two week trial, on October 21, 2016, a unanimous McLean County, Illinois jury found Hobart Brothers Co. liable for a plaintiff’s mesothelioma allegedly caused by exposure to asbestos while working for Portable Elevator Company fifty years ago.  According to reports, the plaintiff alleged that Hobart Brothers had knowledge of the hazards of asbestos and... Read More

Full Coverage Exists When No Reasonable Way to Distinguish Whether Hurricane or Construction Defect Cause of Loss The Florida Supreme Court, applying Florida law, resolved a split among the state’s appellate courts and held that the concurrent cause doctrine is the proper standard for evaluating insurance coverage when “independent perils converge and no single cause can be considered the sole... Read More

Insurance Code Section Tolling Notice Until Final Denial Not Applicable in $68M Fidelity Insurance Case The Illinois First District Court of Appeals, Fifth Division, in an opinion authored by Justice Lampkin, applying Illinois law, affirmed summary judgment for insurer Kansas Bankers Surety Co. against its policyholder, Independent Trust Corp. (now in receivership) in the latter’s effort to collect on a... Read More

“Consent-to-Settle” Provision Applies to Settlement Made Before Primary Exhausted The Sixth Circuit, applying Michigan law, reversed the district court and held that excess insurer TIG Insurance Company (“TIG”) had no coverage obligation to Stryker Corporation (“Stryker”) for certain settlements because Stryker had not received TIG’s written consent for the settlements as unambiguously required under the TIG policy.  The appellate court... Read More

Approves 100% Allocation to Non-Settling Insurer and Denies Equitable Contribution against Settling Insurers The Bankruptcy Court for the Northern District of California, applying Illinois law, denied an insurer’s motion for summary judgment finding the insurer’s interpretation of the bankruptcy plan incorrect.  The court held that an “allocated percentage” of 100% is a valid allocation and that there was no basis... Read More