A federal court in New Jersey recently held that the construction of an ambiguous policy term is not a matter suitable for judgment on the pleadings, thus denying AIG from avoiding coverage for a $67 million antitrust settlement. Rather, the only way to establish the meaning of an ambiguous term, the court explained, is to ascertain the intent of the parties, which requires “meaningful discovery.”

Continue Reading No Easy Out For AIG in $67 Million Antitrust Coverage Suit

In MF Global Holdings Ltd. et al. v. Allied World Assurance Co. Ltd. et al., No. 1:16-ap-01251 (Bankr. S.D.N.Y. Aug. 24, 2017), the United States Bankruptcy Court for the Southern District of New York ordered MF Global Holdings Ltd. and Allied World Assurance Co. Ltd. to arbitrate their $15 million errors-and-omissions coverage dispute in Hamilton, Bermuda. MF Global initiated an adversary proceeding against Allied World in the bankruptcy court after Allied World had refused to pay MF Global for amounts that MF Global returned to its customers’ accounts as part of a settlement of claims against MF Global’s former managers and directors. Allied World denied coverage under its “Bermuda Form” errors-and-omissions policy, claiming that this procedure was tantamount to deposit insurance, and not professional liability insurance, which is what errors-and-omissions coverage typically provides. Continue Reading Court Order Sending Coverage Dispute To Arbitration Overseas Demonstrates The Potential Consequences Of Purchasing “Bermuda Form” And Other International Coverages

In the linked Client Alert, my colleague, Geoff Fehling, discusses the recent federal appellate decision in Camacho v. Nationwide Mutual Insurance Co., No. 16-14225, 2017 WL 2889470 (11th Cir. July 7, 2017), where the Eleventh Circuit affirmed a Georgia district court’s refusal to disturb a jury award for the policyholder arising from the insurer’s failure to accept a time-limited settlement demand, holding that the lower court’s order was “thorough and well-reasoned.”


The interplay between primary and excess insurance is often litigated, especially in the context of settlements. On April 26, 2017, the First Circuit in Salvati v. Am. Ins. Co., 16-1403, 2017 WL 1488238, at *1 (1st Cir. Apr. 26, 2017) considered whether the settlement agreement entered into between plaintiff and the insureds/primary insurer was sufficient to trigger excess insurance coverage under the insured’s policy with American Insurance Company.

Continue Reading First Circuit Rules Settlement Agreement Can Trigger Excess Insurance Coverage Under Policy Language, But This Settlement Did Not

On December 2, 2016, a Texas federal court ruled that the insurer for the predecessor of CVS Caremark Corp., Revco D.S. Inc. (Revco), must pay $15 million toward a $100 million settlement of a class action lawsuit for the injuries and deaths allegedly caused by a toxic vitamin solution, E-Ferol. Pursuant to the settlement, the plaintiffs received an assignment of Revco’s rights to pursue indemnity insurance coverage from the company’s excess insurer, Federal Insurance Co. (Federal). The Court granted, in part, the plaintiffs’ motion for summary judgment seeking indemnity, by declaring that Revco’s excess insurance policy covered the negligence claims based on its manufacturing and distributing of E-Ferol.

Continue Reading Case Finding Insurer Liable For $15 Million Settlement Underscores Impact Of Settlement Language On Coverage