On November 12, 2019, a federal court in Kentucky held that a vendor service agreement (VSA) between Live Nation Worldwide Inc. and its security vendor, ESG Security, extended coverage under an insurance policy issued by Secura Insurance to ESG, for Live Nation’s liability arising from a concert at a Live Nation facility.

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In a recent decision, the Maryland Court of Special Appeals reiterated that the duty to defend broadly requires a liability insurer to defend an entire lawsuit against its insured, even where only some of the allegations are potentially covered.  The court further held that the insured has no obligation to apportion defense costs among multiple implicated policies.  The decision, Selective Way Insurance Company v. Nationwide Property and Casualty Insurance Company, et al., can be found here.

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When facing a crisis, such as product recall or a cyber attack, companies routinely engage third-party consultants. When doing so, there are potential privilege issues involved. Hunton Andrews Kurth insurance attorneys Syed Ahmad and Adriana A. Perez discuss these privilege issues in an article published by Westlaw. The full article is available here. In

After a four-day trial, an Arizona federal jury found that Western Truck Insurance Services, Inc., an insurance broker, was negligent in selling Madison Alley Transportation and Logistics Inc. a business interruption policy with inadequate annual limits. Based on its finding of negligence, the jury determined that the broker was liable for $685,000 of $1,000,000 in damages suffered by Madison Alley as a result of a flood in its warehouse.  The verdict and Complaint, filed in Arizona state court before the case was removed, can be found here and here.

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In Dunn, et al. v. Columbia National Insurance Company, No. 2:17-cv-0246 (N.D. Ga.), an insurance company refused to defend an insured in a personal injury claim contending that the insured failed to cooperate in the defense. The underlying claim stemmed from an automobile accident, where an employee of Lawson Air Conditioning and Plumbing, Inc. (“Lawson”), Ronald Patterson, struck members of the Dunn family with a pickup truck owned by Lawson as the family was walking out of a Walmart store. The Dunn family members suffered bodily injury as a proximate result of the accident.  Patterson admitted fault.

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A federal court in Illinois ruled recently, in Cincinnati Insurance Company v. H.D. Smith Wholesale Drug Company, that Cincinnati Insurance Company was required to indemnify H.D. Smith for a $3.5 million settlement it reached with the State of West Virginia.  The settlement resolved an action in which West Virginia alleged that H.D. Smith contributed to the state’s opioid addiction epidemic through its negligent distribution of opioid prescription drugs.

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Insurance companies frequently raise the so-called “dishonesty” exclusion that is typically found in most professional liability and directors and officers insurance policies.  Last week, the U.S. Court of Appeals for the Sixth Circuit took a substantial step toward curtailing that practice.  In a coverage dispute with eight-figure implications, the appellate court found in favor of the policyholder and ruled that publishing false statements does not equate to dishonesty and thus is not sufficient to support application of a dishonesty exclusion.

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The Seventh Circuit held last week that a manufacturer’s insurer must cover its insured, a designer and builder of anaerobic digesters, under its errors and omissions policy for claims alleging breach of contract, despite an exclusion in the policy for claims arising out of the breach of an express or oral contract. The decision in Crum & Forster Specialty Insurance Company v. DVO, Inc., No. 18-2571 (7th Cir. Sept. 23, 2019), illustrates the practical application of policy construction to avoid what would otherwise amount to an illusory promise of coverage.
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A Florida district court recently held that an insurer wrongfully refused to defend a Miami-based strip club in a lawsuit filed by 17 models claiming that the club used their images to promote its business without their authorization. The insurer was required to defend the club for allegations of defamation under the policy’s personal and advertising coverage even though 16 of the 17 plaintiffs’ claims alleged conduct outside the covered policy period and no plaintiffs brought a cause of action for “defamation.” The decision highlights the broad duty to defend, in Florida and elsewhere, that policyholders should emphasize when pursuing coverage.

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