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The Windsor Food Reality: You Don’t Always Get What You Think You Paid For

By Robert D. Chesler and Janine M. Stanisz

Many companies that purchase contamination products insurance policies believe that all of their product recall woes are covered. They could not be more wrong.

 

Making an Insured Whole Entails More Than a Patch Job

By Grace V. Hebbel and David G. Jordan

Discover how "replacement cost" coverage is often complicated by whether a repair can truly match damaged material that is in need of replacement.

 

Decomposing Body Brings Life to Exclusions for Seepage and Microorganisms

By Peter J. Mitchell

Third Circuit recently decided whether coverage exists under a commercial and general liability policy for the damage caused by a decomposing body.

 

"Right to Occupy" Surface Estate Bars Coverage for Property Damage

M. Kaylan Dunn, Courtney E. Ervin and J. Wiley George

Legal right to occupy property suffices for property damage and blended pollution exclusions to bar coverage for well blowout.

 

Insurance 101: Decoding the Secrets of the London Market

Anna Torres

Understanding the history and unique terminology of Lloyd’s of London.

 

Guidance Coming on Determining Damages in Florida UM/UIM Bad Faith Actions

By William T. Barker

New law may be just around the corner in Florida auto insurance law.

 

Coverage for Actions in Response to Governmental Investigations and Prosecutions

Joseph D. Jean and Danielle Vrabie

It's not a suit, but the government is knocking on the door. Is coverage available?

 

Fidelity Coverage for Loss Arising from Financial Crises

By Matthew J. Schlesinger and Tara A. Brennan

Looking beyond the four corners of the policy may provide avenues to another source of coverage.

 

Asbestos Plaintiffs May Still Collect on a Dissolved Corporation’s Insurance

By Kenneth M. Gorenberg

After a corporation dies, its liability and therefore its insurers’ liability die too, right? Not under Delaware corporate law.

 

Insurer Files Class Action Suits to Recover for Climate Change Losses

By Erin Doran

One insurer recently looked to litigation as a tool for recouping past losses it attributes to climate change

 

Insurance 101:Employers Required to Establish Employee Theft for Coverage under Crime Policies

By Gabrielle T. Kelly

Because first-party property policies typically do not cover crime-related losses, companies are purchasing commercial crime policies, also called fidelity insurance, to fill this gap and protect their assets.

 

Insurance 101: Seventh Circuit Limits Insurer Standing to Challenge Settlements

By Marla H. Kanemitsu

The Seventh Circuit Court of appeals directed that an excess insurer’s concerns about a policyholder settling “on the cheap” with a lower-layer insurer—thereby potentially increasing the excess insurer’s coverage obligations—was an issue the excess insurer should address through its policy language, not through the bankruptcy courts.

 

Greater Effects of Hurricanes in Business Interruption Claims

By Erica J. Dominitz and Gregory M. Jacobs

Parties have disputed, and courts have addressed, whether the valuation of a business interruption claim should consider the effects that a hurricane or other catastrophic event had on the surrounding region, positive or negative, including its effect on the policyholder’s competitors and on the local economy.

 

Insurance 101: Insurer's Use of Extrinsic Evidence for Duty to Defend in Florida

By Andy Dogali and Jacqueline H. Palik

Liability insurance may entitle an insured to a defense and to indemnification for a third-party claim made against it. In Florida, an insurer's duty to defend its insured against such a claim is separate and apart from the duty to indemnify the insured.


Business Interruption

Please contact Richard Lewis for further information or to submit content.

 

Greater Effects of Hurricanes in Business Interruption Claims

By Erica J. Dominitz and Gregory M. Jacobs

 

Ten Tips to Securing Insurance Coverage for a Business Interruption

Lee M. Epstein


A Look Back at Insurance Law in 2008: New York’s Highest Court Confirms that Insurance Companies are Liable for Consequential Damages Just Like Anyone Else

Ronald J. Papa and Marshall Gilinsky


The “Loss of Market” Exclusion: An Update from the Policyholder Perspective

 Nicholas M. Insua


The “Loss of Market” Exclusion: The Insurer’s Perspective

 Frank A. Valverde


Fundamentals of Making a Business Income Claim | PDF

 Richard P. Lewis

 


Natural Catastrophes

Please contact Troy J. Seibert for further information or to submit content.

Making an Insured Whole Entails More Than a Patch Job

Grace V. Hebbel and David G. Jordan

Discover how "replacement cost" coverage is often complicated by whether a repair can truly match damaged material that is in need of replacement.

 

Servicing Insurer Agreement

Wilbert V. Farrell, IV


Ninth Circuit Rules Flood Exclusion Unambiguously Bars Coverage for Storm Surge Damage from Hurricane Katrina

Thomas H. Cook, Jr. and Patricia St. Peter


Counseling Your Client after the Loss of a Home

 Linda E. Klamm


Hurricane Storm Surges and Property Insurance: What’s the Coverage Climate?

 Marc J. Shrake and Raina Bayas


Implications of Anti-Concurrent Causation Clauses in Gulf Coast Hurricane Claims

 Daniel P. Buechler


Failure to Adopt Creative Solutions Furthers Crisis in U.S. Property Insurance Markets

 James M. Davis and Noel C. Paul


Breadth of the Flood Exclusion: A Flood is a Flood, Including Storm Surge

 Tred R. Eyerly



Financial Crisis

Please contact Terrance J. Evans for further information or to submit content.

Fidelity Coverage for Loss Arising from Financial Crises

By Matthew J. Schlesinger and Tara A. Brennan

Looking beyond the four corners of the policy may provide avenues to another source of coverage.

 

Advancement of Defense Costs to Directors and Officers of a Bankrupt Corporation

By Kimberly M. Melvin

An increasingly prevalent issue for directors and officers insurers and their insureds is how to handle the advancement of defense costs when the insured entity goes bankrupt. Unfortunately for carriers, the courts have not taken a consistent approach.

 

Can Insurance Help Ponzi Victims?

By Charles T. Lee and Mandiey Winalski

The jurisprudence relating to insurance coverage for Ponzi losses is developing as claims make their way through the courts.


A Closer Look at the SafeNet Decision on "Related Claims"

By Jeffrey A. Kiburtz

The U.S. District Court for the Southern District of New York recently issued a decision in Fed. Ins. Co. v. SafeNet, Inc., Case No. 09 CV 7863 (Sept. 9, 2011), which addresses a number of issues that frequently arise in claims under directors and officers liability policies and other claims-made insurance policies.


D&O Coverage Exists For Subpoenaed Non-Party Employees’ Fees

By Paul T. Curley

Director’s and officer’s liability coverage exists for legal fees paid by the insured entity on behalf of nonparty employees subpoenaed to testify in an SEC civil lawsuit against certain of the entity’s directors and officers.


Interrelated Wrongful Acts Provision Bars Coverage

By Paul T. Curley

The court addressed whether an amended cross-complaint made during the policy period related back to the original cross-complaint made prior to the policy period.


Fraud Exclusion in D&O Policy Bars Coverage for Convicted Insureds

By Paul T. Curley

The Southern District of Ohio held that, despite material misrepresentations in an application, a directors and officers liability insurer’s rescission claim could not be adjudicated on summary judgment.


Asserting Derivative Claims on Top of Direct Claims Does Not Give Rise to D&O Coverage

By Paul T. Curley

Court upheld an insurer’s denial of coverage for purported derivative claims on the ground that the policyholder was attempting to convert a directors and officers liability policy “into a policy that provides first-party coverage for what amounts to business losses.”


Maximize Your Insurance Recovery for Theft or Fraud Losses

 William G. Passannante & James R. Serritella


Fifth Circuit Upholds Injunction Requiring Insurer to Advance Defense

 Laura J. Grabouski


Texas Court Grants Injunction, D&O Insurer Can't Renege on Promise to Advance Defense Costs

 Amelia Miazad and Walter Crump


When Are the Costs for Complying with an Agency Investigation or Conducting an Internal Investigation Covered by a D&O Policy?

 Stephen Goldberg


A General Overview of Subprime/Credit Crisis Related Claims and Potential D&O Coverage Issues

 Paul Curley


Insurance Coverage for Bankrupt Corporations: Needed Now More Than Ever

 Jason M. Rosenthal and Kristen E. Hudson


Enterprise Risk Management: An Important Strategic Discipline

 Dan A. Bailey

 


Insurance 101

Please contact Kathryn Kasper, Joshua Pollack, or Daniel H. Rylaarsdam for further information or to submit content.

 

Insurance 101: Decoding the Secrets of the London Market

Anna Torres


Employers Required to Establish Employee Theft for Coverage under Crime Policies
By Gabrielle T. Kelly

 

Seventh Circuit Limits Insurer Standing to Challenge Settlements

By Marla H. Kanemitsu

 

Insurer’s Use of Extrinsic Evidence for Duty to Defend in Florida

By Andy Dogali and Jacqueline H. Palik

 

An Overview of the Reinsurance "Follow the Fortunes" Doctrine for the Young Lawyer

 Nicholas J. Boos


When Is a Claim a “Claim?”

 Helen K. Michael, Amy J. Woodworth, and Erica J. Dominitz


Fundamentals of Litigating Breaches of Notice Provisions in Insurance Policies

 Jorge R. Salva


Differences Between First-Party and Third-Party Insurance Policies

 Lisa J. Trembly


Cost-Saving Tips for Case Management Orders in Insurance Coverage Actions

 James S. Carter

 


Bad Faith

Please contact Meghan Moore for further information or to submit content.

 

Erosion of Attorney-Client Privilege and Work-Product Doctrine in Bad-Faith Litigation

By Stacey S. Farrell and Alicia G. Curran

In an underlying liability suit, an insurer must keep in mind its tripartite relationship with its insured and outside defense counsel, as well as the long-term effects of this relationship in potential subsequent bad-faith litigation.


New Jersey Expands Bad Faith Law

By Robert D. Chesler

A court ruled that an insurance company violated the covenant of good faith and fair dealing when it had no valid reason to delay processing a claim and knew or "recklessly disregarded that it had no reasonable basis for denying the claim."

 

Institutional Bad-Faith Discovery: Locating Smoking Guns in the Digital Era

 Meghan C. Moore and Matthew B. Weaver


The Use of Experts in Insurance Bad Faith CasesPDF

 Charles M. Miller, Esq.


Bad Faith Basics

 Jeffrey Michael Cohen, Steven J. Brodie and Aram C. Bloom


The Bad Faith Set Up | PDF

 Jeffrey Michael Cohen, Steven J. Brodie and Aram C. Bloom


The Bad Faith Setup: Doin’ It and Dodgin’ It

 Jeffrey Michael Cohen, Steven J. Brodie and Aram C. Bloom

 


Cyber Insurance

Please contact Richard J. Bortnick for further information or to submit content.

Keeping Your Data, Not Your Head, In the Cloud

By Jason M. Rosenthal

 

Cyber Losses and Insurance Implications

By Michael B. Rush

 

Will Cyberbullying Claims Be Covered Under Homeowners' Policies?

By Rina Carmel, Barbora Pulmanova, Sherilyn Pastor, and Nina Golden

 

CBI for the Cloud

By Lon Berk

 

 

Media & Technology

Please contact Robert Chesler for further information or to submit content.

Coverage for Computer Viruses: Do You Need to Know the Perpetrator?

By Rukesh Korde

The U.S. District Court for the Northern District of Illinois dismissed the complaint in a case seeking insurance coverage for the loss of numerous valuable electronic files and data allegedly caused by a computer virus.


In Your Face! Facebook and the Use of Social Networking Websites for Service of Process

 Paul Spackman and Susan Page White


Privacy Issues Arising Out of Blast-Faxes

 Robert D. Chesler


Use of Another’s Advertising Idea in an “Advertisement” Triggers Insurer’s Defense Obligations

 David A. Gauntlett

 


Food Contamination

Please contact Suzan F. Charlton for further information or to submit content.

The Windsor Food Reality: You Don’t Always Get What You Think You Paid For

By Robert D. Chesler and Janine M. Stanisz

Many companies that purchase contamination products insurance policies believe that all of their product recall woes are covered. They could not be more wrong.

 

Coverage for Food Contamination under a First-Party Property Policy

By Robert D. Chesler

Companies need to realize that contamination under a first-party property policy is very different from pollution under a third party liability policy.


California and Illinois Hold Accidental Contamination Provisions Afford No Coverage

By Rina Carmel

Two recent cases have examined policy definitions of accidental contamination and accidental product contamination under a product recall issued to a food distributor and a malicious tampering/accidental contamination policy issued to a food manufacturer, respectively.


Product Recalls Demand Careful Insurance Coverage Analysis

By Robert D. Chesler Esq and Rachel M. Wrightson Esq. – July 6, 2011

The food industry faces a new risk in the wave of product recalls.


First-Party Policies Provide Coverage for Food Spoilage and Other Damages Resulting from Loss
 of Electrical Power

 Robert D. Chesler


Food is Bad for You: Issues to Consider in Food, Beverage, and Wine Claims

 Rina Carmel and Anthony B. Leuin


Insurance Coverage for Food-Related Liabilities and Recalls | PDF

 Suzan F. Charlton


Contemporary Product Recall Issues and Strategies for Remediation | PDF

 Brad Murlick

 


Going Green

Please contact Erin Doran for further information or to submit content.

Why Should Your Insurance Be Green? You May Save on Premiums and Also Get The Coverage You Need

 Walter Crump and Amelia Miazad


Stemming the Tide: The Lesson of Steadfast v. AES and Terminating the Duty to Defend Climate Change Lawsuits

 Max H. Stern and Jessica E. La Londe

 


Construction Insurance

Please contact Tracy Alan Saxe for further information or to submit content.


Breaking Down the Tiara Decision

By Heather Howell Wright

The demise of the economic-loss rule in construction defect litigation and the potential impact on the "property damage" requirement in a general liability policy.

 

Who Qualifies as "An Insured" under Wrap-Up Policies

By Ruth Kochenderfer and Christopher Dougherty

Because a wrap-up program provides insurance for many entities, it presents several unique issues, including defining who is an insured under such a policy.


Construction Anti-Indemnification Law Changes Indemnity and Additional Insurance Landscape

By Leslie C. Thorne

On January 1, 2012, Texas joined a handful of states in declaring construction contract indemnity provisions and additional insured requirements void and unenforceable.


South Carolina: CGL Policy Covers Construction Defects

By Edwin L. Doernberger

South Carolina’s Supreme Court recently issued a revised opinion in the hotly debated case of Crossmann Communities of North Carolina, Inc. v. Harleysville Mut. Ins. Co.


Location, Location, Location: Placement of Terms Can Really Matter

By Jamie R. Carsey and Kimberly Snagg

Prejudice need not be shown in connection with an insured’s failure to comply with a consent-to-settle provision contained in the definition section of a policy.


What's Your Status?

Daniel A. Dorfman

A general contractor is not an additional insured under a commercial general liability policy where the general contractor is not in contractual privity with the named insured.


Commercial Construction Wrap-ups: Owner and Contractor Controlled Insurance Programs

 Tracy Alan Saxe


Five Things to Know about Risk Shifting Provisions in Contractor Agreements

 Jason M. Yacuk


Insurance-Related Discovery

Please contact Jodi Spencer Johnson or Heather W. Habes for further information or to submit content.

Beyond Bad Faith: Discoverability of Reserve & Reinsurance Information to Rebut an Insurer's Misrepresentation Defense

Helen K. Michael

 

Intellectual Property

Please contact Milind Parekh for further information or to submit content..

 

Federal Denial of Petitions for Rehearing Subject to De Novo Review Wastes Judicial Resources

By David A. Gauntlett

Correcting clear error on rehearing best conserves federal judicial resources. However, a number of recent cases were denied rehearing, only for subsequent case law to evidence shortcomings in the panel's analysis.


Advertising-Injury Coverage for Trade Dress, Slogans

By Cort T. Malone

Policyholders confronting copyright, trade-dress, or slogan-infringement claims should evaluate their advertising-injury coverage, as it may protect against losses.


Missouri Upholds Disclaimer of Advertising Insurance Coverage

Robert D. Chesler and Eric Jesse

Food product manufacturers and distributors, like other commercial policyholders, often do not realize that they have almost no coverage for intellectual property infringement.


Insurer Did Not Commit Bad Faith When it Relied Upon an IP Exclusion

The California Court of Appeals has held that an insurer did not commit bad faith when it relied upon an IP exclusion to deny coverage for an advertising injury claim.


Dispute Over Coverage for Claim of Unauthorized Use

An action brought in California federal court seeking coverage for claims alleging copyright and trademark infringement has recently settled.

 

IP Exclusion Bars Coverage for Patent Infringement Claim

The U.S. District Court for the District of Arizona, applying Arizona law, held that an IP exclusion barred coverage for a patent infringement claim. In Ventana, St. Paul Fire & Marine Insurance Company (St. Paul), insured Ventana Medical Systems, Inc. (Ventana), under a medical and biotechnology commercial general liability policy.

Circuit Holds Claim for Patent Infringement is Covered as an Advertising Injury

In Hyundai Motor America v. National Union Fire. Ins. Co. of Pittsburgh, No. 08–56257 (9th Cir. Apr. 5, 2010), Orion IP, LLC (Orion), sued Hyundai for patent infringement. Orion alleged that Hyundai was liable for infringement by inter alia, introducing a feature on its website that allowed users to build and preview a car.


More Insurance Coverage Articles

Advancement of Defense Costs to Directors and Officers of a Bankrupt Corporation

By Kimberly M. Melvin

An increasingly prevalent issue for directors and officers insurers and their insureds is how to handle the advancement of defense costs when the insured entity goes bankrupt. Unfortunately for carriers, the courts have not taken a consistent approach.

 

Selected 2013 Insurance Coverage Decisions of the Georgia Appellate Courts

By John C. Bonnie

Georgia courts decided on matters ranging from whether a claim for breach of warranty can constitute an occurrence, to the parameters of legal liability for cargo in transit.

 

Keeping Your Data, Not Your Head, In the Cloud

By Jason M. Rosenthal

More and more businesses, including law firms, are storing their data in the cloud. Knowing the risks can help minimize the figurative storms that can result from the off-site storage and management of data

 

Cyber Losses and Insurance Implications

By Michael B. Rush

Companies are often finding that traditional insurance policies might not offer the protection from cyber attacks that they anticipated.

 

Texas Supreme Court Accepts Certification of Additional Insured, Contra Proferentem Issues in Deepwater Horizon

By David E. Schoenfeld

On September 6, 2013, the Texas Supreme Court accepted certification from the Fifth Circuit of two questions raised by BP’s pursuit of additional insured coverage for its liabilities resulting from the Deepwater Horizon disaster.

 

Breaking Down the Tiara Decision

By Heather Howell Wright

The demise of the economic-loss rule in construction defect litigation and the potential impact on the "property damage" requirement in a general liability policy.

 

Erosion of Attorney-Client Privilege and Work-Product Doctrine in Bad-Faith Litigation

By Stacey S. Farrell and Alicia G. Curran

In an underlying liability suit, an insurer must keep in mind its tripartite relationship with its insured and outside defense counsel, as well as the long-term effects of this relationship in potential subsequent bad-faith litigation.

 

Who Qualifies as "An Insured" under Wrap-Up Policies

By Ruth Kochenderfer and Christopher Dougherty

Because a wrap-up program provides insurance for many entities, it presents several unique issues, including defining who is an insured under such a policy.


Federal Denial of Petitions for Rehearing Subject to De Novo Review Wastes Judicial Resources

By David A. Gauntlett

Correcting clear error on rehearing best conserves federal judicial resources. However, a number of recent cases were denied rehearing, only for subsequent case law to evidence shortcomings in the panel's analysis.


Ohio Decides Whether Claims for Defective Construction Constitute Occurrences

By Caroline L. Marks

The Ohio Supreme Court weighed in on this issue, but it did so without the benefit of briefing by the policyholder, which may explain some of the deficiencies and gaps in the court’s analysis.

 

The Brussels I Regulation's Rules on Choice of Court Clauses

By Jeffrey A. Kiburtz

Given that application or consideration of the Brussels I Regulation could lead to results different from those under U.S. law, it is prudent for U.S. insurance practitioners, particularly those that deal with policies issued out of Europe, to at least be aware of the regulation and its rules concerning choice of court agreements in insurance policies.

 

Will Cyberbullying Claims Be Covered Under Homeowners' Policies?

By Rina Carmel, Barbora Pulmanova, Sherilyn Pastor, and Nina Golden

Along with the advent of the electronic age has come an unexpected side effect—a new form of bullying known as "electronic aggression" or "cyberbullying" that poses new coverage issues for policyholders and insurers alike.

 

The Duty to Advance or Reimburse Defense Costs v. the Duty to Defend

By Nick Nierengarten

Courts have developed a variety of familiar duty-to-defend rules for determining whether the defense obligation is triggered and the scope of that obligation.

 

Multiple Allocation Rulings in Long-Tail Losses

By Noah B. Wallace

Many practical issues of quantifying how long-tail losses are allocated to the individual policies within commercial general liability policies have not been addressed.

 

Construction Industry Policyholder Coverage in Upheaval After Ruling

By Jeremiah M. Welch and Theresa A. Guertin

Insurance coverage for construction industry policyholders has been thrown into a state of upheaval due to a recent decision by the Fifth Circuit Court of Appeals. It misinterprets and misapplies Texas precedent and standard form general liability insurance policies.

 

New Jersey Expands Bad Faith Law

By Robert D. Chesler

A court ruled that an insurance company violated the covenant of good faith and fair dealing when it had no valid reason to delay processing a claim and knew or "recklessly disregarded that it had no reasonable basis for denying the claim."

 

Advertising-Injury Coverage for Trade Dress, Slogans

By Cort T. Malone

Policyholders confronting copyright, trade-dress, or slogan-infringement claims should evaluate their advertising-injury coverage, as it may protect against losses.


Coverage for Food Contamination under a First-Party Property Policy

By Robert D. Chesler

Companies need to realize that contamination under a first-party property policy is very different from pollution under a third party liability policy.


Construction Anti-Indemnification Law Changes Indemnity and Additional Insurance Landscape

By Leslie C. Thorne

On January 1, 2012, Texas joined a handful of states in declaring construction contract indemnity provisions and additional insured requirements void and unenforceable.


Insurance Coverage for Attorney Fee-Shifting Awards

By Nick Nierengarten

Insureds may seek to recover an attorney fee award from their insurers, either as part of the indemnity obligation to pay damages or from the supplementary payments coverage to pay costs.


Confidentiality and Privilege in the Insurer–Policyholder–Defense Counsel Relationship

By Richard C. Giller

Whether communications between an insured or its counsel and an insurance company are protected from disclosure turns on the issue of which party controls the underlying litigation.


Discovery Strategies in Coverage Litigation

By Daniel E. Tranen

Courts have been inconsistent on discovery motions for extra-contractual materials held by insurers. Here are some strategies used by policyholders and insurers to obtain or thwart their production.


Liability Insurance Coverage for Trade Dress Infringement

By Peter S. Selvin

The trade dress of a product or service often constitutes part of its advertising. This article explores the circumstances under which claims for trade dress infringement may be covered under the advertising-injury portion of a CGL policy.


Can Insurance Help Ponzi Victims?

By Charles T. Lee and Mandiey Winalski

The jurisprudence relating to insurance coverage for Ponzi losses is developing as claims make their way through the courts.


Protecting Privilege While Preserving Coverage

By John Buchanan and Wendy Feng

Liability insurance for a large, complex claim is often a love-hate relationship balancing the rights and interests of the policyholder and the insurer. Here are some tips for achieving equilibrium.


Insurance 101: Liability of Third-Party Administrators and Adjustors

By Kenneth Anspach

Insurance companies are increasingly handing off their claims-handling functions to third parties with no contractual relationship with the insured. The result: A slew of new case law.


Distinguishing Between Large or Matching Deductibles and Self-Insured Retentions

By Deborah M. Minkoff

Understanding the similarities and differences between different methods of apportioning risk between insurers and insured paves the way to efficient handling of claims.


Trigger of Insurance Coverage for Wrongful Arrest, Prosecution and Conviction Lawsuits

By Benjamin C. Eggert and Ashley Eiler

A rising tide of exonerations is producing a wave of lawsuits over when coverage should begin for such wrongful litigation.


Court Changes Course on Insurer's Duty to Disclaim Coverage

By Steven P. Nassi and Jason M. Kurtz

Policyholders often contest the timeliness of an insurer’s disclaimer of coverage as a way to deflect an otherwise valid defense to coverage.


CBI for the Cloud

By Lon Berk

Business interruption losses caused by loss of access to data in the cloud are often covered by contingent business interruption forms. These losses are not precluded by many exclusions purporting to limit coverage for data losses and in most, if not all, cases satisfy the requirement of "physical loss." When confronted with such losses, insured's needing coverage should examine the nature of the loss and look to their "legacy" CBI policies, as well as any new specialized policies they may have.


Construction Defects as an "Occurrence": State Legislatures Weigh In

By Edwin L. Doernberger and Theresa A. Guertin

Construction industry policyholders and their commercial general liability carriers have long debated whether claims arising from defective construction constitute an "occurrence" triggering coverage. For 30 years, state courts have weighed in and have taken a multitude of different analytical approaches to the issue. Recently, four state legislatures joined the discussion: Colorado, Arkansas, South Carolina and Hawaii. This article explores why the state legislatures chose to get involved and what they did to attempt to clarify coverage for construction professionals.


Evaluating First-Party Property Claims with Multiple Causes Under the Efficient Proximate Cause Doctrine

By Susan J. Field and Rina Carmel

First-party property claims can involve highly complex issues of causation. An understanding of the policy language, governing law, and facts of the claim (with the assistance of consultants, if appropriate) can assist both parties in an appropriate evaluation of coverage.


Dodd-Frank's Impact on D&O Insurance

By K. Alan Parry and Eric G. Barber

When Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, its intent was to "reshape the U.S. regulatory landscape," in an effort to restore confidence in a financial system still struggling to recover from the Great Recession. Among the many anticipated impacts of this far-reaching legislation is a likely increase in the exposure of corporate directors and officers to SEC enforcement actions and civil litigation as well. This article explores some of the potential D&O insurance coverage issues that may arise in the context of the Dodd-Frank reforms.


Treatment of Insurance Proceeds and the Stafford Act's Public Assistance Grant Program

By Brent W. Huber and Susan Charles

This article examines the interplay between an insured's ability to recover from its insurer and its ability to obtain Public Assistance (PA) funding from the Federal Emergency Management Agency (FEMA) under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. § 5121, et seq. It examines the statutory language and Congressional intent in promulgating the act and concludes that, to the extent a PA recipient does not seek reimbursement of expenses already paid by or to be paid by insurance, the Stafford Act should allow recipients to determine how best to allocate insurance proceeds using reasonable commercial standards.


Coverage for Computer Viruses: Do You Need to Know the Perpetrator?

By Rukesh Korde

The U.S. District Court for the Northern District of Illinois dismissed the complaint in a case seeking insurance coverage for the loss of numerous valuable electronic files and data allegedly caused by a computer virus.


Shale Gas: Environmental Concerns Are Just the Tip of the Iceberg

By Kenneth Anspach

The U.S. Environmental Protection Agency (USEPA) announced the publication of a report, which concluded that the process known as "fracking" causes the contamination of water supplies.


Group Health Insurers Can Be Sued for Negligence of Providers in Their Networks

By Kristina N. Holmstrom

Plaintiffs injured by medical malpractice typically look to recover against the doctors and medical facilities that treated them, not to the insurer that paid for the substandard treatment. In Nevada, however, this is changing.


A Closer Look at the SafeNet Decision on "Related Claims"

By Jeffrey A. Kiburtz

The U.S. District Court for the Southern District of New York recently issued a decision in Fed. Ins. Co. v. SafeNet, Inc., Case No. 09 CV 7863 (Sept. 9, 2011), which addresses a number of issues that frequently arise in claims under directors and officers liability policies and other claims-made insurance policies.


California and Illinois Hold Accidental Contamination Provisions Afford No Coverage

By Rina Carmel

Two recent cases have examined policy definitions of accidental contamination and accidental product contamination under a product recall issued to a food distributor and a malicious tampering/accidental contamination policy issued to a food manufacturer, respectively.


D&O Coverage Exists For Subpoenaed Non-Party Employees’ Fees

By Paul T. Curley

Director’s and officer’s liability coverage exists for legal fees paid by the insured entity on behalf of nonparty employees subpoenaed to testify in an SEC civil lawsuit against certain of the entity’s directors and officers.


Interrelated Wrongful Acts Provision Bars Coverage

By Paul T. Curley

The court addressed whether an amended cross-complaint made during the policy period related back to the original cross-complaint made prior to the policy period.


Fraud Exclusion in D&O Policy Bars Coverage for Convicted Insureds

By Paul T. Curley

The Southern District of Ohio held that, despite material misrepresentations in an application, a directors and officers liability insurer’s rescission claim could not be adjudicated on summary judgment.


Asserting Derivative Claims on Top of Direct Claims Does Not Give Rise to D&O Coverage

By Paul T. Curley

Court upheld an insurer’s denial of coverage for purported derivative claims on the ground that the policyholder was attempting to convert a directors and officers liability policy “into a policy that provides first-party coverage for what amounts to business losses.”


South Carolina: CGL Policy Covers Construction Defects

By Edwin L. Doernberger

South Carolina’s Supreme Court recently issued a revised opinion in the hotly debated case of Crossmann Communities of North Carolina, Inc. v. Harleysville Mut. Ins. Co.


Institutional Bad-Faith Discovery: Locating Smoking Guns in the Digital Era

By Meghan C. Moore and Matthew B. Weaver

The road to evidence demonstrating an insurance company’s decision to adopt or tolerate corporate policies, repeat conduct, and general business practices that harm policyholders in violation of state insurance laws, is often littered with obstacles.


When Is Work Abandoned for Purposes of the Products-Completed Operations Hazard?

By Neil Selman

The distinction between an insured’s ongoing operations and completed operations can affect the application of three key exclusions.


Location, Location, Location: Placement of Terms Can Really Matter

By Jamie R. Carsey and Kimberly Snagg

Prejudice need not be shown in connection with an insured’s failure to comply with a consent-to-settle provision contained in the definition section of a policy.


What's Your Status?

By Daniel A. Dorfman

A general contractor is not an additional insured under a commercial general liability policy where the general contractor is not in contractual privity with the named insured.


Insurance in the Wake of United Kingdom Bribery Act
By Raymond L. Sweigart and René L. Siemens

The UKBA has serious potential implications for non-UK companies.


Pulling for Japan–Insurance Coverage for Natural Disasters

 By Tred R. Eyerly

The world watches with awe as Japan struggles through a triple-disaster.


Federal Court Finds No Coverage for Internal Investigation Costs and Certain SEC Costs

 By Joan Gilbride and Paul Curley

One of only a few decisions to address the internal investigation issue, Office Depot appears to be the first to hold in favor of insurers.


Green Companies Need Insurance Too: Wind Fields

 By Jess R. Booth

This is the first article in a series of articles regarding the insurance needs of green companies or companies that are going green.


Maximize Your Insurance Recovery for Theft or Fraud Losses

 William G. Passannante & James R. Serritella

Recent surveys and reports show that incidents of fraud are on the rise.


May an Insurer Recoup Defense Costs Paid Under a Reservation of Rights?

By Michael F. Aylward

For the past 10 years, courts around the country have grappled with the issue of whether an insurer—later declared not to owe coverage—may recoup defense costs, which it paid in the interim under a reservation of rights.


Some Courts Expect All Defense Attorneys to be Experts in Insurance Law

By Erica J. Dominitz

All defense attorneys might have a duty to investigate, advise their clients regarding, and take steps to preserve their clients’ rights under applicable insurance policies.


Insurance Coverage for Ponzi-Fund Losses and Liabilities

By John E. Heintz, Justin F. Lavella, and Veronica Jackson

Although Bernie Madoff is now in federal prison for organizing one of history’s largest Ponzi schemes, his victims are still feeling the ramifications of his crimes.


Fifth Circuit Upholds Injunction Requiring Insurer to Advance Defense

By Laura J. Grabouski

The Fifth Circuit issued an opinion in the dispute involving former officers and directors of companies affiliated with Robert Allen Stanford.

 

Insurance in the Wake of United Kingdom Bribery Act
Raymond L. Sweigart and René L. Siemens

The UKBA has serious potential implications for non-UK companies.


Why Should Your Insurance Be Green? You May Save on Premiums and Also Get The Coverage You Need

“Green insurance” products may be directly relevant to your business, your profession and your personal assets including your home and car.


Stemming the Tide: The Lesson of Steadfast v. AES and Terminating the Duty to Defend Climate Change Lawsuits

A significant decision was recently rendered in the first and perhaps most well-known of the “global warming” coverage cases.


Texas Court Grants Injunction: D&O Insurer Can't Renege on Promise to Advance Defense Costs

A Texas district court granted insureds under a D&O policy injunctive relief requiring the insurers to continue to advance defense costs as promised to the insureds and also to the court.


Florida's State-Backed Citizens Property Insurance Corporation Not Subject to Bad Faith Liability

A Florida court held that suits for bad faith couldn't be considered in the nature of a willful tort because it arises from a fiduciary duty and the statute creating first-party bad faith claims is a statutory cause of action.


Assessing Coverage Issues Under Additional Insured Endorsements

AI endorsements can be beneficial to both insurers and policy holders; however, disputes often arise when attempting to apply the language.


CACI Int'l v. St. Paul Fire & Marine Insurance Company: Courts Struggle with "Eight Corners Rule" Boundaries

In many states, the outcome of insurance coverage litigation over the duty to defend will hinge on the application of the Eight Corners Rule.


When Co-Insurers Collide, Who Pays?

In 2007, the Texas Supreme Court held that no cause of action exists between co-insurers when they jointly cover a loss and each policy contains a pro rata insurance clause.


Delgado v. Interinsurance Exchange: California Supreme Court Restores Clarity to the Analysis of Coverage for Self-Defense

Along the spectrum of negligent/intentional torts is a gray area of conduct that can appear negligent or intentional, depending on the facts presented.


When Are the Costs for Complying with an Agency Investigation or Conducting an Internal Investigation Covered by a D&O Policy?

One issue that corporate policyholders face is trying to recoup money spent on public agency and internal investigations from the insurers when a D&O policy has been purchased.


The Limited Reach of the Bank of the West Rule

Policyholders are facing increasing numbers of actions for alleged securities fraud, inappropriate options dating, and other compensation arrangements, financial restatements, and other purported financial misdeeds.


Law Firm Disqualification: Defining the Insurer as a Client to Determine the Scope of the Duties of Loyalty and Confidentiality in a Bad Faith Action

Conflicts analysis becomes more complex when the new firm is bringing a bad faith cause of action against an insurer and the insurer previously retained one or more of the firm’s attorneys to defend the policyholder.


Maximizing Policyholder Insurance Coverage in the Face of Insolvencies

Gaps in coverage created by insolvencies and settlements for less than policy limits almost invariably reduce the insurance available to policyholders facing products liability, environmental, and other long-tail claims.


Potential Erosion of the Attorney-Client Privilege in Insurance Coverage Litigation: Danger Ahead?

Many courts have now concluded that an insurer may not avoid the consequences of bad faith conduct just because it engages in litigation concerning coverage issues with its policyholder.


Liability Insurance Coverage Issues in Alabama

Coverage is subject to a three-step analysis.


Katrina Storm Surge Damage Excluded From Homeowners' Policy Coverage

A Mississippi court held that an exclusion for water damage bars coverage for the storm surge that damaged a policyholders’ house during Hurricane Katrina.


Articles from the 2006 Insurance Coverage Litigation CLE Seminar

» Reimbursement of Uncovered Defense Costs
Andrew Weiner, Stephen M. Kelley
» State Tort Reform's Impact on Asbestos Bankruptcy Proceedings
Gretchen A. Ramos
» The States Still Want Their Money: Direct Actions by States Against Insurers for Environmental Claims
Laura Hanson, Amy Woodworth

 


Checklists for Property Damage and Business Interruption Claims
The Insurance Coverage Litigation Committee has prepared a general checklist for making claims under property insurance policies and a checklist of additional information that may be required in making a claim under business interruption coverage. Originally created to address insurance issues arising out of the terrorists attacks on September 11, 2001, these checklists are applicable to losses from natural disasters.


» Property Insurance Checklist | PDF

» Business Interruption Insurance Checklist | PDF

» Frequently Asked Questions in the Wake of Natural Disasters | PDF




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