There was nothing ambiguous in former U.S. Supreme Court Justice David Souter’s ruling in AIG Property Cas. Co. v. Cosby, No. 17-1505 (1st Cir. June 7, 2018), where, sitting by designation, Justice Souter ruled that AIG Property and Casualty Co. (“AIG”) must defend Bill Cosby in suits brought by eight women alleging that Cosby defamed them after they accused him of sexual misconduct.  Cosby held two insurance policies issued by AIG:  a homeowner’s policy and a personal excess liability policy (the “umbrella policy””).  Under each policy, AIG has a duty to “pay damages [Cosby] is legally obligated to pay [due to] personal injury or property damage caused by an occurrence covered[] by this policy anywhere in the world . . . .”  Both policies define “personal injury” to include “[d]efamation” and require AIG to pay the cost of defending against suits seeking covered damages.  Both policies also contain so-called “sexual misconduct” exclusions.  The homeowner’s policy’s exclusion bars coverage for liability or defense costs “arising out of any actual, alleged[,] or threatened . . . [s]exual molestation, misconduct or harassment[,] . . . or . . . [s]exual, physical or mental abuse.”  The umbrella policy contained similar wording.  However, that policy also contained another “sexual misconduct” exclusion under the “Limited Charitable Board Directors and Trustees Liability” coverage part.  That exclusion applied more broadly to claims for damages “[a]rising out of, or in any way involving, directly or indirectly, any alleged sexual misconduct” (emphasis added).

Continue Reading 1st Cir. and Former SCOTUS Justice Find Ambiguous “Arising Out Of” Requires Cosby Defense

Policyholders are often surprised to hear that their policies cover more than the run-of-the-mill claim. For example, a general liability policy may cover a cyber-related loss. See our prior post. As a more recent example, a federal court in South Carolina found that a parent’s homeowners’ policy obligated an insurer to defend a college student against hazing allegations. Allstate Ins. Co. v. Ingraham, No. 7:15-cv-3212 (D.S.C. Mar. 14, 2017).

Continue Reading Defense Of Hazing Claims Against College Student Covered Under Parents’ Homeowners’ Policy

On December 1, 2016, the Florida Supreme Court held that the concurrent cause doctrine applies where multiple perils combined to create a loss even where one of those perils is excluded by the terms of the all-risk property insurance policy. The decision is a significant victory for Florida policyholders, especially where other jurisdictions have struggled to apply the efficient proximate cause doctrine after natural disasters like Hurricane Katrina. For detailed analysis of the Sebo v. American Home Assurance Co., Inc. decision, see Andrea DeField’s client alert.

Florida’s Second District Court of Appeals ruled on Friday that a homeowner’s insurance policy provision restricting assignment without the insurer’s consent does not restrict the post-loss assignment of policy benefits to an emergency water mitigation company, reversing the trial court’s ruling on summary judgment. In Bioscience West, Inc. v. Gulfstream Prop. & Cas. Co., the homeowner suffered a water loss and hired Bioscience to perform emergency water mitigation. Case No. 2d14-3946 (Fla. 2d DCA Feb. 5, 2016). In return for its services, the homeowner assigned the benefits of her insurance policy to Bioscience under an agreement permitting Bioscience to directly bill the insurer. The insurer, Gulfstream Property and Casualty Company (Gulfstream), refused to pay Bioscience as assignee, citing the policy’s assignment provision. Bioscience sued Gulfstream for breach of contract. The trial court granted summary judgment in favor of Gulfstream, finding that the policy’s assignment provision precluded the post-loss assignment to Bioscience without the insurer’s consent.

Continue Reading No Consent? No Problem: Florida Appellate Court Upholds Post-Loss Assignment of Policy Benefits