The Second Circuit has ruled a claim alleging an “offer for sale” infringed on a patent constitutes an advertising injury sufficient to trigger a defense under commercial general liability insurance.  In High Point Design LLC v LM Insurance Corporation, the plaintiff High Point brought a declaratory-judgment action against Buyer’s Direct, Inc. after the latter directed High Point to cease-and-desist in the sale of its Fuzzy Babba slippers.  Buyer’s Direct responded with a counterclaim alleging trade dress infringement, claiming that High Point’s offers for sale in retail catalogs infringed on Buyer’s Direct’s own slipper trade dress.  Buyer’s Direct sought discovery of all advertising, marketing and promotional materials related to High Point’s fuzzy footwear to substantiate its claims.

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The Fifth Circuit in Evanston Insurance Co. v. Mid-Continent Casualty Co. recently held that multiple collisions caused by the same insured driver over a span of 10 minutes constitute a single occurrence subject to a $1 million limit in the insured’s primary policy with Mid-Continent. The holding reversed a lower court’s ruling that Mid-Continent is liable for an additional sum the excess insurer, Evanston, paid to resolve all of the claims arising from the collisions. At issue, a fundamental question about causation and coverage under commercial liability insurance.

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In a prior post, we discussed a New York trial-court decision that found an insurance policy issued in 1966, to insure the construction of the World Trade Center, continues to cover modern-day asbestos claims, with each claim constituting an individual occurrence.  Last week, in American Home Assurance Co. v. The Port Authority of N.Y. and N.J., 7628-7628A (1st Dep’t Nov. 15, 2018), an intermediate appellate court affirmed that decision, agreeing that coverage is triggered for claims tied to alleged asbestos exposure at the WTC site in the 1960s and ’70s.

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A California federal court found coverage under AIG’s general liability policy for the defense and indemnity of email scanning suits against Yahoo!. Those suits generally alleged that Yahoo! profited off of scanning its users’ emails. Because the allegations gave rise to the possibility that Yahoo! disclosed private content to a third party, the court found

In a victory for policyholders, a New York trial court rejected insurers’ summary judgment arguments, ruling that an insurer must establish a common “fact, circumstance, situation, transaction or event” underlying an investigation before it can rely on a prior and pending litigation and investigation (“PPLI”) exclusion based on that earlier investigation. The court further ruled that the insurer cannot base its coverage denial on a common “fact, circumstance, situation, transaction or event” learned during the investigation.

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In a victory for policyholders, and an honorable mention for Merriam-Webster’s Dictionary, a federal judge in Virginia ruled that the dispersal of concrete dust that damaged inventory stored in an aircraft part distributor’s warehouse was a pollutant, as defined by the policy, but that it also constituted “smoke” as that term was defined in the dictionary, thereby implicating an exception to the policy’s pollution exclusion.  The Court then granted summary judgment for the policyholder, who had suffered a $3.2 million loss.[1]

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The Second Circuit has rejected Chubb subsidiary Federal Ins. Co.’s request for reconsideration of the court’s July 6, 2018 decision, confirming that the insurer must cover Medidata’s $4.8 million loss under its computer fraud insurance policy.  In July, the court determined that the loss resulted directly from the fraudulent e-mails.  The court again rejected the insurer’s argument that the fraudster did not directly access Medidata’s computer systems.  But the court again rejected that argument, finding that access indeed occurred when the “spoofing” code in emails sent to Medidata employees ended up in Medidata’s computer system.

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