Construction Defect:  7th Cir. Finds Damage To Condominium Residents’ Property Caused By Poor Workmanship During Building Construction Not Covered. The Seventh Circuit Court of Appeals, applying Illinois law, held that a developer’s poor workmanship in constructing a condominium was not an “occurrence” providing coverage for damage to the condominium itself.  Furthermore, while damages to the residents’ personal property potentially constituted... Read More

Late Notice:  No Coverage Where Policyholder Failed To “Immediately Notify” Insurer Of Arbitration Claim. A Texas appeals court, applying Texas law, held Lexington Insurance Co. (“Lexington”) had no duty to cover a $5 million arbitration award obtained by a former employee of its insured who was stabbed in the neck during a workplace scuffle, because Lexington received late notice of... Read More

Asbestos:  Pennsylvania Federal Court Finds Excess Insurer Has Duty To Defend In Addition To Limits, Even Where Its Policy States Its Duty To Defend Is Not In Addition To Limits A Pennsylvania federal court, applying Pennsylvania law, refused to reconsider its rulings in a coverage lawsuit holding that Old Republic Insurance Company’s (“Old Republic”) duty to defend Ampco-Pittsburgh Corp. (“Ampco-Pittsburgh”)... Read More

Conflict-Of-Interest – Independent Counsel:  Minnesota Federal Court Rejects Insurer’s Claim That Reservation-of-Rights Did Not Require Insurer To Pay Policyholder’s Counsel. A Minnesota federal court, applying Minnesota law, held that Arrowood Indemnity Company’s (“Arrowood”) reservation of rights, while accepting defense of an class action on behalf of Select Comfort Corporation (“Select Comfort”), created a conflict of interest that converted its duty... Read More

The Sixth Circuit, applying Ohio law, held that excess insurer Westchester Fire Insurance Company (Westchester) had a duty to defend IMG Worldwide Inc. (IMG) in litigation stemming from a failed real estate project, finding Westchester’s duty to defend was triggered when primary insurer Great Divide Insurance Company (Great Divide) denied coverage. IMG was sued for millions of dollars for its... Read More

A New York appellate court ordered AIG and other insurers to provide TransCanada Energy USA Inc. with communications involving attorneys and claims handling personnel in a $70 million coverage battle over the repair costs and business interruption losses stemming from the shutdown of a damaged turbine at a power plant in Queens, New York. The insurers argued that the documents... Read More

An Indiana federal district court, applying Michigan law, held that offsite soil and groundwater contamination resulting from Visteon Corporation’s (Visteon) historical use of trichloroethylene (TCE) as a degreaser was barred by the absolute pollution exclusion contained in its National Union Fire Insurance Company of Pittsburgh, P.A. (National Union) insurance policies. Visteon operated a Connersville, Indiana plant that manufactured automotive component climate... Read More

A California Federal Court, applying California law, has held that policyholder Signal Products, Inc.’s (Signal) utilization of two law firms as independent counsel was not per se unreasonable.  Signal makes and sells Guess? products.  Signal became embroiled in an intellectual property lawsuit brought by Gucci.  Signal was represented in the underlying litigation by one firm, while another firm (Signal’s... Read More

A Virginia Federal Court, applying Virginia law, held that The Travelers Indemnity Company of America (Travelers) had a duty to defend Portal Healthcare Solutions, LLC (Portal) with regard to an underlying action alleging Portal posted patient records on the internet, causing them to become publically available. Portal specializes in the electronic safekeeping of medical records for medical providers.  A class... Read More

5th Cir. Finds Total Pollution Exclusion Endorsement Trumps Broad Property Damage Endorsement The Fifth Circuit Court of Appeals, applying Texas law, held that a Total Pollution Exclusion (TPE) endorsement bars insurance coverage that would otherwise be available under a property damage endorsement. Liberty Mutual Insurance Company (Liberty) issued a commercial insurance policy to Linn Energy, LLC and Linn Operating, Incorporated (Linn). ... Read More