The First Circuit recently held that a “Special Hazard and Fluids Limitation Endorsement” was ambiguous and therefore there was excess coverage for a fuel spill that occurred after a tanker-truck overturned.

In Performance Trans. Inc. v. General Star Indem. Co., the First Circuit reversed the District Court’s grant of summary judgment in favor of General Star Indemnity Company. The District Court held that the excess policy General Star issued to Performance Trans. Inc. precluded coverage for a spill that resulted in the leaking of thousands of gallons of fuel. The District Court relied on the existence of a total pollution exclusion to bar coverage and held that the policy’s Special Hazards and Fluids Limitation Endorsement could not create an ambiguity that would afford coverage.
Continue Reading First Circuit Rules Excess Insurer Must Provide Coverage for Fuel Spill

A D.C. federal judge recently held that an insurer could be responsible to a TV station for more than $25 million in an underlying malpractice suit where the insurer failed to send timely notice preserving its rights under the policy in violation of a Virginia statute.

Continue Reading Insurer Can’t Mute TV Station’s Recovery for $25 Million Malpractice Claim

A federal judge has denied an insurance company’s motion to dismiss the claims of another insurer seeking reimbursement and contribution for the $15 million it paid to settle underlying claims arising from a product recall.

Continue Reading Recall and Recoup: Georgia Court Denies Insurer’s Early Motion to Escape Contribution Claim Arising from $51 Million Product Recall Coverage Dispute

A group of Las Vegas-based restaurants recently filed a class action lawsuit to recover business interruption damages against their insurer. The Egg Works chain alleged that U.S. Specialty wrongly denied their claims for financial losses stemming from the Nevada governor’s closure of non-essential businesses during the COVID-19 pandemic. The governor’s orders limited the restaurants to takeout and delivery service only.

Continue Reading Restaurant Chain Seeks to Recover COVID-19 Losses Under Food Contamination Theory

Pennsylvania’s highest court recently rejected Erie Insurance Exchange’s argument that it had no duty to defend a claim arising out of a shooting because it did not involve an accident, and therefore, there was no “occurrence” under the policy. The court held that the duty to defend was triggered because the underlying allegations were not “patently outside the policy coverage.” This decision can have far reaching effects on other kinds of claims involving intentional conduct.

Continue Reading Pennsylvania Court Holds That Violent Acts Are Not Lethal To The Duty To Defend

Evolving government orders will affect the way many retail businesses operate and the potential insurance available for losses and expenses. For instance, on April 28, 2020, the State Health Officer of Alabama issued an Order allowing some businesses to reopen, but under strict sanitation and social distancing guidelines. Retail stores, for example, will be allowed to reopen but must maintain a maximum occupancy rate of 50%. While a partial opening may restore some level of activity, because these businesses must operate at a reduced capacity, their operations will not return to normal. Beyond that, while some states are loosening social distancing requirements, others have extended them. Indeed, on the same day that Alabama announced its partial reopening, the Governor of Massachusetts extended the closures of non-essential businesses. Regardless of location, many businesses will likely sustain substantial losses because of these orders, and will incur expenses to comply with evolving requirements and operational guidelines.

Continue Reading Insurance Coverage for Businesses Affected by Evolving COVID-19 Government Orders

A New York appellate court recently held that renewable bio-diesel fuel manufacturer BioEnergy Development Group LLC may pursue tens of millions of dollars in damages from its insurers under two all-risk insurance policies, including amounts in excess of the policy limits, where the insurers refused to pay claims in a timely manner.

Continue Reading New York Appellate Court Holds Insurers May Suffer Consequences of Delayed Payment of Energy Company Property and Business Interruption Claims

The U.S. District Court of Appeals for the First Circuit recently held that Zurich American Insurance Company was obligated to defend Electricity Maine, LLC in a class action lawsuit brought by its customers.  The case stems from alleged misconduct by Electricity Maine that resulted in customers receiving higher bills than were previously represented.  Plaintiffs Jennifer Chon and Katherine Veilleux sought to represent a class of approximately 200,000 customers seeking damages totaling approximately $35 million.  Specifically, the complaint asserted claims for negligence, negligent misrepresentation, violations under the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18. U.S.C. §§ 1962, 1964, and the Maine Unfair Trade Practices Act.

Continue Reading First Circuit Court of Appeals Holds That Insurer Must Defend Electricity Company Against Class Action Lawsuit

Insurance companies can become insolvent. This is an ongoing issue in Puerto Rico following hurricanes Irma and Maria. In addition to Real Legacy Assurance Company’s insolvency, Puerto Rico’s Insurance Commissioner reportedly fined various insurers for delays in handling claims. Even if your insurance company is insolvent, it may have purchased reinsurance. While the general rule

In Centurion Med. Liab. Protective Risk Retention Grp., Inc. v. Gonzalez, No. CV 17-01581 RGK (JCx), 2017 BL 392431 (C.D. Cal. Nov. 1, 2017), Centurion Medical Liability Protective Risk Retention Group sought a declaration that it owed no duty to defend a lawsuit alleging that its insureds—a group of medical practitioners—committed professional negligence during the delivery of a newborn child.  Centurion argued that it had no defense obligation because its insureds did not notify Centurion of the lawsuit within 20 days after it was filed, as required under the policy.


Continue Reading Don’t Hit “Snooze” on Your Notice Obligation – California Ruling Provides a Crucial Lesson for Those Purchasing “Claims-Made” Policies