Pollution Trigger And Bad Faith: 11th Cir. Finds No Indemnity Obligation And No Bad Faith
June 18, 2014 | | Insurance Bytes, National

The United States 11th Circuit Court of Appeals, applying Alabama law, affirmed the district court’s ruling for the insurer against coverage and against bad faith damages. The insurer issued commercial general liability coverage to the policyholder between 1967 and 1984. In 2008-2009, the policyholder received a CERCLA information request, a formal notice of potential liability, and a draft administrative... Read More

Policyholder’s Ability To Target Tender Cannot Be Assigned To Settling Insurer.
May 23, 2014 | | Illinois, Insurance Bytes

The Illinois First District Appellate Court rejected a settling insurer’s attempt to deselect itself and target tender the policyholder’s other available coverage, based on assignment of this right by the policyholder in the settlement agreement. The court held thatAmco Insurance Company could not force Cincinnati Insurance Company to contribute to a $1.5 million settlement of a personal injury lawsuit, finding... Read More

Insurer’s Attempt To Withdraw Reservation Of Rights And Assume Defense Rejected.
May 23, 2014 | | Illinois, Insurance Bytes

An Illinois federal district court found that withdrawal of all coverage defenses by a primary insurer does not vitiate a conflict of interest and the policyholder’s right to independent counsel where potential liability exceeds the primary insurer’s limits.  The district court, applying Illinois law, determined that Liberty Surplus Insurance Company breached its duty to defend Perma-Pipe Inc. by refusing... Read More

Choice of Law and TCPA – IL Sup. Ct.: A Potential Conflict Not Enough to Warrant IN Law
May 23, 2014 | | Illinois, Insurance Bytes

The Illinois Supreme Court rejected State Farm’s argument that a choice-of-law analysis required application of Indiana law, which Indiana federal district courts predicted would have relieved State Farm of its duty to defend its policyholder in a TCPA case. In an action filed in Illinois state court, State Farm acknowledged that, under Illinois law, it would have a duty to... Read More

TCPA: Exclusion Bars Coverage For Non-TCPA Causes Of Action
May 23, 2014 | | Illinois, Insurance Bytes

The Illinois Second District Appellate Court rejected plaintiff G.M Sign, Inc.’s attempt to recover $4.9 million from State Farm Fire & Casualty Company under an insurance policy containing a TCPA exclusion, finding that the exclusion also barred coverage for the alternative causes of action of conversion and consumer fraud. The Telephone Consumer Protection Act exclusion at issue barred coverage for... Read More

Claim Against Surety Bonds Sufficient To Trigger Duty To Post Collateral And Indemnify Surety Bond Insurer.
May 23, 2014 | | Illinois, Insurance Bytes

The Seventh Circuit Court of Appeals rejected a contractor’s argument that it only has collateral and indemnity obligations to its bonding agent if it is actually found liable for a breach of the surety bonds. The court upheld summary judgment in favor of Hanover Insurance Co. for approximately $200,000 in damages and attorneys’ fees against a contractor who failed to... Read More

NY Adopts Qualcomm: Settlement For Less Than Limits Results In Forfeiture Of Excess Coverage
May 22, 2014 | | Insurance Bytes, National

A New York appeals court affirmed the lower court’s ruling that RSUI Indemnity Co. does not have to provide indemnity coverage for Forest Laboratories’ $65 million class action settlement because lower level excess insurers did not exhaust their policies first. RSUI was a 7th layer excess carrier above a primary policy in an $80 million “tower” of insurance. Forest... Read More

D&O 1st Cir.: Conflicting Authority Means Defense Must Be Provided Despite Insured v. Insured Exclusion
May 22, 2014 | | Insurance Bytes, National

The First Circuit U.S. Court of Appeals held that AIG must advance defense costs to the directors and officers of Westernbank of Puerto Rico because it was unclear whether the insured-vs.-insured exclusion applied. The FDIC sent a written demand to the bank’s directors and officers for the defunct bank’s losses. The directors and officers notified AIG of the claim,... Read More

Asbestos / Pollution Allocation: 3 Important Cases On Exhaustion And Target Tender (NY, MD and WI)
May 22, 2014 | | Insurance Bytes, National

No Horizontal Exhaustion By Layer For Excess Under NY Law – A Delaware state court applying New York law held that the horizontal exhaustion rule applies only to primary and umbrella policies, and does not apply to excess layers. Horizontal exhaustion by layer generally means that in a long-tail situation such as asbestos or pollution, an entire layer of... Read More

Conflict of Interest: Insurer’s Attempt To Withdraw Reservation Of Rights And Assume Defense Rejected
May 22, 2014 | | Insurance Bytes, National

An Illinois federal district court found that withdrawal of all coverage defenses by a primary insurer does not vitiate a conflict of interest and the policyholder’s right to independent counsel where potential liability exceeds the primary insurer’s limits. The district court, applying Illinois law, determined that Liberty Surplus Insurance Company breached its duty to defend Perma-Pipe Inc. by refusing to... Read More