A Washington state court in The Board of Regents of the University of Washington v. Employers Insurance Company of Wausau, No. 22-2-15472-1, recently held that the University of Washington has made a plausible claim for coverage for losses sustained as the result of the outbreak of the COVID-19 pandemic under Washington’s “loss of functionality” test.Continue Reading Invisible Particles or Not: Coverage May Exist for COVID Claims
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!
Whether an insurer has a right to reimburse defense costs after a finding that it has no duty to defend remains an open question in Georgia. However, in Continental Casualty Co., et al. v. Winder Laboratories, LLC, et al., Case No. 21-11758 (11th Cir. Jul. 13, 2023), the Eleventh Circuit Court of Appeals has weighed in with its prediction on the likely answer. Persuaded by the logic of other jurisdictions that, “wide-ranging reimbursement is necessarily inappropriate in a system—like Georgia’s—that is predicated on a broad duty to defend and a more limited duty to indemnify,” the Eleventh Circuit predicted that, “the Supreme Court of Georgia would follow that logic to adopt a ‘no recoupment’ rule to protect its insurance system.” Continue Reading Eleventh Circuit Rejects Implicit Right to Reimbursement of Defense Costs Under Georgia Law
In ExxonMobil Corp. v. Natl. Union Fire Ins. Co. of Pittsburgh, PA, the Texas Supreme Court held that an insurance policy did not incorporate the payout limits of an underlying service agreement and thus the insured was entitled to the higher limits under the insurance policy. 2023 WL 2939596, at *1 (Tex. Apr. 14, 2023).Continue Reading Insurance Coverage Under Umbrella Policy Extends Beyond Requirements of Service Contract
In a recent opinion, the Northern District Court of Illinois reaffirmed the bedrock principle that an insurer’s duty to defend is broad and triggered by any allegations in a complaint that potentially fall within a policy’s coverage grant. In Harleysville Pref. Ins. Co. v. Dude Products Inc., et. al., Case No. 21-c-5249 (N.D. Ill. Dec. 21, 2022), the insured, Dude Products, Inc., sought coverage from its insurer, Harleysville Preferred Insurance Company, against a class action lawsuit that alleged Dude Products intentionally and falsely marketed its wipes as “flushable” even though the product allegedly did not break apart and caused “clogs and other sewage damage.” …
Continue Reading Insurer Can’t Flush Away Its Duty to Defend
Hurricane Ian is rapidly approaching the west coast of Florida and is expected to make landfall as a Category 4 hurricane near the Tampa area within the coming days. While the exact track is still being determined, there is a chance the storm may also impact insureds in Georgia and South Carolina. Now is the…
In an appeal to the Ninth Circuit, a private equity firm has asked the court to reverse an order finding there was no coverage for a suit alleging it concealed that a facility it sold was run by Joaquín “El Chapo” Guzmán. AKN Holdings had purchased a manufacturing facility in Reynosa, Mexico, from Thermo Fisher, unaware that the facility “was overrun” by the drug cartel of “El Chapo.” After discovering the concealment, AKN Holdings sued Thermo Fisher and, while that suit was pending, in turn sold the facility to FINSA, also without disclosing the cartel activities or its pending lawsuit.
Continue Reading Prison Break: Insurer Seeks to Escape Coverage for Suit Tied to “El Chapo”
Earlier this month, current and former Boeing Company directors agreed to a $237.5 million settlement to resolve claims that they ignored safety issues concerning Boeing’s 737 MAX aircraft. While the settlement, which came quickly on the heels of the Delaware Chancery Court’s September denial of the defendants’ motion to dismiss, ranks as one of the largest derivative settlements of all time, the silver lining for the directors and officers named in the suit is that the entire settlement is to be funded by the company’s D&O insurers. The Boeing case is yet another example of the necessity for public companies to purchase sufficient D&O liability coverage, particularly “Side A” insurance coverage, to protect officers and directors implicated in derivative claims, securities class actions, enforcement actions, and similar claims. Because many states, including Delaware, prohibit companies from indemnifying officers and directors for payments made to the company in settlement of stockholder derivative claims or other suits brought on behalf of the company, securing Side A coverage to protect individuals for non-indemnified loss is essential.
Continue Reading Historic Boeing Derivative Settlement Funded By D&O Insurers: How to Ensure Directors and Officers Land Safely With Side A DIC Insurance
As governments lift COVID-19 lockdown restrictions and economies begin to reopen, consumer demand for products has skyrocketed. Amid the spike in demand, businesses are struggling to meet consumers’ needs due to ongoing global supply chain disruption. The disruption stems from many factors, including the lingering effects of COVID-19 mitigation strategies that slashed the production of goods, as well as a shortage of warehouse workers and truck drivers. Insurance is a key component of supply chain risk management. Policyholders who rely on a supply chain can use insurance to protect against supply chain risks. Here, we explore supply chain risks and how insurance can mitigate those risks.
Continue Reading As Global Supply Chain Risks Continue to Grow, Policyholders Need a Strategy in the Event of a Loss
A company faces two class action lawsuits—filed by different plaintiffs, complaining of different allegedly wrongful conduct, asserting different causes of action subject to different burdens of proof, and seeking different relief based on different time periods for the alleged harm. Those facts suggest the suits are not “fundamentally identical,” but that is what a Delaware Superior Court recently concluded in barring coverage for a policyholder seeking to recover for a suit the court deemed “related” to an earlier lawsuit first made outside the policy’s coverage period. First Solar Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. N20C-10-156 MMJ CCLD (Del. Super. Ct. June 23, 2021). The decision, which is not on all fours with some of the authority upon which it relies, underscores the inherent unpredictability of “related” claim disputes and need for careful analysis of the policy language against the factual and legal bases of the underlying claims.
Continue Reading When “Substantially Similar” Means “Fundamentally Identical”: Delaware Court Enforces Related Claim Provision to Deny D&O Coverage for Securities Class Action