In HDI Global Specialty SE v. PF Holdings LLC, the Eleventh Circuit recently affirmed a district court ruling that the insurers of two apartment management companies did not have to cover a $54 million arbitration award against the companies for their alleged mismanagement of government-subsidized apartments. The Eleventh Circuit held that management companies’ failure to cooperate breached general liability insurance policies issued by the insurers.Continue Reading Reminder to Policyholders: Cooperate and Consent!

As discussed in a recent client alert, on March 24, 2023, Florida Governor Ron DeSantis signed House Bill (HB) 837 into law, making it more difficult and costly for insurance policyholders of all sizes to sue insurers for bad faith by eliminating fee-shifting for most policyholders and requiring something “more than” negligence for bad faith claims.
Continue Reading Florida Enacts Sweeping Tort Reform Legislation, Raising Barriers to Insurance Coverage Claims

On Monday, March 6, the US Supreme Court agreed to hear an insurance coverage dispute, Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC.  Insurance cases are few and far between in the high court, so both policyholders and their insurers will be watching the Great Lakes case with great interest.  Notably, while the case involves the specialized area of maritime law, how the Supreme Court chooses to address the choice-of-law issue it presents could have much broader implications.
Continue Reading Supreme Court Takes on Insurance Dispute

If your company has an emergency response plan—and it likely does—filing an insurance claim needs to be included in that plan. But what if your insurer stretches out the consideration process by making continuous, costly information requests without making a coverage determination? Or decides to deny coverage under one clause of the policy, but accept coverage under another? Or outright denies coverage? Policyholders should be prepared to comply with policy obligations (which may vary depending on the controlling state law), such as the sharing of relevant information and documentation or participating in arbitration or a mediation prior to suing the insurer, but also understand the responsibilities insurers have to policyholders when a claim is tendered.
Continue Reading It’s Not You, It’s Them: Dealing With Insurance Coverage Denials

Hunton Andrews Kurth LLP recently wrote about the Eleventh Circuit decision in McNamara v. Gov’t Employees Ins. Co., 30 F.4th 1055 (11th Cir. 2022) (“McNamara”), where the court held that a consensual settlement (such as a consent judgment) serves as an excess judgment for the purposes of a bad faith claim.  In a follow up decision, the Eleventh Circuit extended its McNamara reasoning to a case involving an accepted proposal for settlement.  In Potter v. Progressive American Insurance Company, No. 21-11134 (11th Cir. 2022), Daniel Lee and Jolene Potter brought a third-party bad faith action against the insurer, Progressive.  The Potters were involved in an automobile accident with Progressive’s insured, under an automotive liability policy with bodily injury limits of $10,000 per person.  The Potters sued Progressive’s insured and ultimately served a proposal for settlement, pursuant to Fla. Stat. § 768.79, totaling $125,000.  The insured accepted the proposal, a final judgment was entered, and the Potters sued Progressive for bad faith.
Continue Reading Judgment (Still) Means Judgment: The Eleventh Circuit Extends McNamara to a Proposal for Settlement

In what is an unfortunate sign of the times, Springpoint Senior Living, Inc. recently sued its insurers in New Jersey federal court claiming they abruptly stopped covering Springpoint’s defense costs after doing so for nearly a decade.  A copy of the complaint can be found here. Springpoint’s allegations are emblematic of a growing trend among insurers taking drastic measures to avoid coverage, which is no doubt in response to the tightening economic conditions and looming recession around the globe. 
Continue Reading A Sign of the Times: Policyholder Forced to Sue Insurers to Resume Payment of Defense Costs

On Wednesday, a federal judge in New York denied FM’s Rule 12(c) motion for judgment on the pleadings after finding the Contamination Exclusion in the Factory Mutual policy to be ambiguous as to whether it bars coverage for business interruption losses resulting from communicable disease.  The case is Thor Equities, LLC v. Factory Mutual Ins. Co., No. 20 Civ. 3380 (AT) (SDNY).  This is a critical decision under the Factory Mutual policy form, which is substantively the same as policies issued by Factory Mutual’s sister company, Affiliated FM Insurance Company.  Factory Mutual and Affiliated FM have maintained that the contamination coverages are “exceptions” to this exclusion, with the exclusion precluding coverage for communicable disease loss under other policy coverages.  But the ruling validates what policyholders have been arguing – that communicable disease “loss” is covered throughout the Factory Mutual policy, in addition to under the sublimited communicable disease emergency response coverages.
Continue Reading Factory Mutual’s “Contamination” Exclusion Is Ambiguous; May Not Limit Coverage For COVID-19 Business Interruption Loss

Last week, a Georgia federal jury popped a motor carrier liability insurer and its insured with a $21 million verdict in a wrongful death suit. According to the Complaint, the insured driver lost control of his tractor-trailer while driving on Georgia Highway 369. As a result, the trailer disconnected and overturned, injuring a pedestrian walking along the highway’s shoulder. The pedestrian eventually succumbed to his injuries, and his estate filed suit against the driver and the driver’s insurer under Georgia’s Direct Action Statute, which allows plaintiffs to name motor carrier insurers as defendants along with their insureds.
Continue Reading Georgia Jury Awards $21M against Trucking Insurer and its Insured in Pedestrian Death