“Before the Court is, once again, the classic case of the insurer requesting relief from the consequences of the inartfully drafted, yet plain, terms of its insurance policy.” So begins the Eleventh Circuit’s recent opinion in Liberty Surplus Ins. Corp. v. Norfolk Southern Railway Co., No. 16-14767, 2017 WL 1228550 (11th Cir. April 4, 2017), where the court held that the unambiguous language of Liberty’s “Completed Work” exclusion did not bar coverage for injuries sustained by a motorist injured at a railroad crossing who later sued Norfolk Southern.

Continue Reading Eleventh Circuit Holds “Completed Work” Exclusion Does Not Bar Claims For Work Under Maintenance Contract

Maryland’s highest court recently held that a policyholder’s failure to provide notice of a lawsuit for two and a half years was no basis for a denial of coverage. The court in Nat’t Union Fire Ins. Co. of Pittsburgh, PA v. Fund for Animals, Inc. held instead that, because National Union could not prove it suffered “actual prejudice” as a result of the late notice, Fund For Animals, Inc. (“FFA”) was entitled to receive the coverage it contracted for under its non-for-profit liability insurance policy (the “Policy”).

Continue Reading Maryland High Court Holds Late Notice Is No Bar To Coverage

The Eleventh Circuit recently held in G.M. Sign, Inc. v. St. Paul Fire and Marine Ins. Co., that, by denying coverage for a lawsuit filed against its insured, St. Paul waived the policy’s notice requirements, thus obviating the need for the policyholder to provide notice of a second similar lawsuit arising out of the same acts and asserting the same claims. The policyholder, MFG.com, was sued in a class action filed in November 2008 by GM Sign, Inc., which alleged that MFG.com had sent numerous unsolicited faxes in violation of the Telephone Consumer Protection Act (TCPA), among other things. After St. Paul denied coverage, MFG.com and GM Sign stipulated to the dismissal of the first lawsuit without prejudice in July 2009. The next day, GM Sign filed a new class action complaint against MFG.com alleging the same claims on behalf of the same class of plaintiffs as the first suit. MFG.com did not tender the second suit to St. Paul. As part of the $22.5 million settlement of the second suit, GM Sign took an assignment of MFG.com’s right to payment from St. Paul and filed suit to recover insurance proceeds and for bad faith. St. Paul responded, contending that MFG.com breached the policy’s notice provision by failing to provide notice of the second lawsuit.

Continue Reading Insurer’s Denial of Coverage Waived Policyholder’s Further Compliance With Policy

The Court of Appeals of Georgia recently found an excess insurer liable for environmental costs related to a leak in an insured’s pipeline.  In doing so, the court rejected the insurer’s argument that liability for the costs should be spread among policies issued by other insurers spanning nearly three decades.  The opinion is available here.

Continue Reading Georgia Court Declines to Adopt Continuous Trigger Theory in Pipeline Contamination Case

In a case filed in California last week, an insurer once again has taken the position that funds disbursed to computer hackers because of fraudulent commands received via e-mail from hackers are somehow distinguishable from the hacker misappropriating the funds directly. They are not. The typical scheme, via social engineering commonly known as “business e-mail compromise” or “CEO fraud,” involves an e-mail from a high-level executive’s e-mail account directing a subordinate employee to wire funds to a bank account actually owned by a third-party scammer, the true author of the email. Insurers have denied coverage for such liabilities, contending that their policies do not cover voluntary disbursements of company funds – as if the insureds intended to give their funds away to the bad guys!

Continue Reading Insurers Continue to Contend Cybercrime Losses Are Not Covered

The Supreme Court of Wisconsin ruled yesterday that a construction company’s builder’s risk policy issued by Assurance Company of America (“Assurance”) applied to cover a fire loss at a home under construction, even though the prospective purchasers of the home were residing in the home at the time of the fire and had already recovered from their homeowner’s policy.

Continue Reading Wisconsin Supreme Court: Builder’s Risk Coverage Applies Despite Homeowner’s Policy