The Seventh Circuit affirmed a ruling from the Northern District of Illinois that a subcontractor’s insurer must defend the general contractor in a negligence suit brought by an employee of the subcontractor for injuries suffered on the job.

Continue Reading Seventh Circuit Holds Insurer Must Defend General Contractor in Suit by Subcontractor’s Employee

A Massachusetts intermediate appellate court recently found no coverage for a general contractor listed as an additional insured under a subcontractor’s general liability insurance policy. The general contractor sought coverage for a negligence action brought by an employee of the subcontractor regarding workplace injuries.

Continue Reading Massachusetts Appellate Court Reads Cross Liability Exclusion Broadly in Denying Additional Insured Coverage to General Contractor

A New York appeals court recently granted partial summary judgment in favor of the insureds, finding that excess directors and officers insurers, Westchester Fire Insurance Co., Aspen American Insurance Co. and RSUI Indemnity Co., must advance the defense costs for former executives of the insured entity. The decision is the most recent victory for policyholders in connection with D&O insurance claims asserted in the wake of alleged securities violations and accounting fraud at related real estate investment firms, which have resulted in millions of insurance recoveries for the company and its officers and directors (as previously reported here and here).

Continue Reading New York Appellate Court Confirms Insurers Must Advance Defense Costs Under D&O Policies

Over the past couple of months, we have written on decisions by various European insurers to pay policyholders for their COVID-19 related losses. That positive trend is now moving across continents.

Continue Reading South African Insurers Agree to Pay for COVID-19 Losses

Last month we wrote a piece concerning AXA’s agreement to pay COVID-19 related business interruption claims by a group of restaurants in France after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under its insurance policies. AXA reportedly has already agreed to pay over 200 COVID-19 related claims.

Continue Reading Will European Insurers’ Positive Response to COVID-19 Claims Influence US Insurers?

AXA, one of the biggest insurance companies in the world, has agreed to pay COVID-related business interruption claims by a group of restaurants in Paris after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under AXA’s policies.

Continue Reading Global Insurer Agrees to Pay COVID-19 Business Interruption Claims

The Fourth Circuit recently held that an insurance company was obligated to cover millions in legal fees incurred in defending an employment suit against the owners of DARCARS, a DC-area based car dealership. The court ruled that the relevant policy exclusion was ambiguous and, as a result, construed the exclusion narrowly against the insurer and in favor of coverage.

Continue Reading Fourth Circuit Affirms Ruling That Insurer Must Pay Millions For Breaching 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

The California Supreme Court ruled that vertical exhaustion applied to determine how a policyholder could access its excess insurance policies. Montrose Chem. Corp. v. Superior Court, No. S244737 (Cal. Apr. 6, 2020). The case involved coverage for Montrose Chemical Corporation’s environmental liabilities at its Torrance facility under insurance policies issued from 1961 to 1985. Montrose and its insurers agreed that Montrose’s primary policies were exhausted but disputed the sequence in which Montrose could access the excess insurance policies.

Continue Reading California Supreme Court Rules In Favor Of Vertical Exhaustion

In responding to a certified question from the Fifth Circuit in Richards v. State Farm Lloyds, the Texas Supreme Court held that the “policy-language exception” to the eight-corners rule articulated by the federal district court is not a permissible exception under Texas law.  See Richards v. State Farm Lloyds, 19-0802, 2020 WL 1313782, at *1 (Tex. Mar. 20, 2020).  The eight-corners rule generally provides that Texas courts may only consider the four corners of the petition and the four corners of the applicable insurance policy when determining whether a duty to defend exists.  State Farm argued that a “policy-language exception” prevents application of the eight-corners rule unless the insurance policy explicitly requires the insurer to defend “all actions against its insured no matter if the allegations of the suit are groundless, false or fraudulent,” relying on B. Hall Contracting Inc. v. Evanston Ins. Co., 447 F. Supp. 2d 634, 645 (N.D. Tex. 2006).  The Texas Supreme Court rejected the insurer’s argument, citing Texas’ long history of applying the eight-corners rule without regard for the presence or absence of a “groundless-claims” clause.

Continue Reading Staying the Course, Texas Supreme Court Rejects Insurer’s Argument for Exception to Eight-Corners Rule in Determining Duty to Defend