Specialty Lines
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May 26, 2023
Lawsuit Over Background Check Not Covered, Court Told
A human resources company accused in a lawsuit of performing a faulty background check that resulted in its client hiring an individual who embezzled $1 million from it is not covered under a professional liability insurance policy, the company's insurer said.
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May 26, 2023
Insurer Gets Tinder Owner's Coverage Claims Trimmed
A New York federal judge trimmed a coverage fight brought by Tinder owner Match Group LLC against Beazley Underwriting Ltd., saying Match's position on some of its claims is untenable because it asks the court to ignore unambiguous language in the policy.
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May 25, 2023
Law360's 2023 IA Specialty Lines Editorial Advisory Board
Law360 is pleased to announce the formation of its 2023 Insurance Authority Specialty Lines Editorial Advisory Board.
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May 25, 2023
Insurer Says Trustee Must Return $500K In Overpayments
An insurer who issued a land trust annuity based on the life of a Florida resident is seeking to recover nearly $500,000 from the trustee, saying that amount was paid after the resident died and therefore the trustee is not entitled to those funds.
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May 25, 2023
Snow Removal Co.'s Email Hack Loss Not Covered, Court Told
A snow removal company's $179,000 loss from a wire fraud scheme is not covered under its cyber policy, the company's insurer told a Minnesota federal court, arguing that the loss resulted directly from an employee's error, not the hacker's fraudulent data entry.
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May 25, 2023
Insurer Says No Coverage For $100M Lab Theft Dispute
An insurer told an Illinois federal judge it should not have to defend an underlying suit against the sole proprietor of a medical lab, who is accused of fraud for pushing out his business partner and stealing $100 million from the company.
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May 25, 2023
Chemical Co.'s $16M Fraud Loss Not Covered, Panel Says
A chemical manufacturer cannot be insured for over $16 million it lost because of fraudulent invoices sent by its supplier of plastic shipping bags, a Texas state appeals court ruled Thursday, finding that an exclusion barring coverage for theft by an "authorized representative" applies.
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May 25, 2023
Chubb Unit Takes Strip Mall's $4M Storm Suit To Federal Court
Chubb unit Westchester Surplus Lines Insurance Co. removed a more than $4 million unpaid storm damage suit by the owner of a Tallahassee strip mall to Florida federal court Thursday.
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May 25, 2023
Plaintiff Swap Won't Prejudice Insurer In Suit, Court Told
A hotel management company on Wednesday fought a magistrate judge's recommendation against its bid to substitute a sibling company as plaintiff in a coverage dispute over the mismanagement of two hotels, saying the substitution would not prejudice the insurer on the other side of the dispute.
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May 25, 2023
Jury Grants Insurer $2M Win Against Former Employees
Three former employees of insurance brokerage giant USI Insurance Services are responsible for paying the company $2.1 million for violating their contracts, a Georgia federal jury ruled, ending a dispute over whether a competitor had wrongfully poached executives from the insurer's aviation practice group.
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May 24, 2023
Travelers Fights Damages In $13M Scholastic Coverage Row
Travelers Insurance and its subsidiary told a Manhattan federal judge Wednesday that they shouldn't owe consequential damages or attorney fees to Scholastic as part of a $13 million coverage suit stemming from the publisher's copyright settlement with Vanderbilt University.
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May 24, 2023
Recalled Dehumidifier Caused $1M Church Fire, Insurer Says
A Pennsylvania church's insurer sued Electrolux on Wednesday to recover more than $1 million it spent to cover damage to the church from an April 2022 fire that the insurer alleged was started by a recalled dehumidifier.
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May 24, 2023
State Farm Settles Defective QVC Pressure Cooker Suit
A fire damage suit brought by an insurer against the manufacturer of a defective pressure cooker sold by television channel QVC was settled in Washington federal court, according to court documents submitted Wednesday.
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May 24, 2023
'Bump-Up' Exclusion Ruling Flouts Precedent, 4th Circ. Told
A merger of equals cannot constitute an acquisition under a directors and officers policy's so-called bump-up exclusion, Towers Watson told the Fourth Circuit, urging the court to rethink its decision paving the way for insurers to avoid covering a $90 million settlement resolving shareholder litigation over the company's merger with Willis.
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May 24, 2023
State Farm Must Defend Man In Fatal Shooting Suit
State Farm cannot dodge defense duties in a wrongful death suit to a man who pled guilty to second-degree murder, a Virginia federal judge ruled, finding it's possible that the underlying action could be covered under the so-called eight-corners rule.
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May 24, 2023
Mich. Judge Upholds Insurer's Rainwater Damage Denial
A Michigan federal judge ruled Wednesday that an insurer correctly denied a couple's claim for water damage caused by excessive rainfall, agreeing that it was explicitly excluded from coverage under their homeowners policy.
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May 24, 2023
Ind. Factory Demands $108M From Insurers For Flood Damage
A flood-damaged factory demanded $108 million in compensation from its insurers during a jury trial in which a witness who saw confidential documents was barred Wednesday from testifying, and insurers, accused of acting in bad faith, asked an Indiana federal judge for a directed verdict.
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May 24, 2023
Insurer Owes $5.7M For Worker Thefts, For-Profit College Says
The receiver and creditor for a now-defunct for-profit college operator told a Georgia federal court that National Union Fire Insurance Co. of Pittsburgh, PA owes them more than $5.7 million in employee theft coverage, arguing the AIG unit had no reasonable grounds to deny their claims.
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May 24, 2023
Insurer Urges 9th Circ. To Toss Ex-NS8 Legal Chief's Appeal
Specialty insurer Ironshore Indemnity Inc. urged the Ninth Circuit on Tuesday to affirm a ruling that an exclusion in a warranty letter signed by the since-convicted CEO of defunct tech company NS8 Inc. means it doesn't have to defend the company's former in-house lawyer from a breach of fiduciary duty claim.
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May 24, 2023
Cyber Carriers Divided On Response To Online Privacy Risk
As more class actions regarding online privacy violations are filed and regulatory bodies increase their scrutiny of the issue, the cyberinsurance industry is grappling with how to treat the burgeoning risk with no clear consensus. Here, Law360 delves into how cyberinsurance has figured into privacy litigation as the first half of the year winds down.
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May 24, 2023
Insurer Settles Defective Truck Costs Dispute
An inland marine insurer has settled its coverage dispute with a truck manufacturer concerning an oilfield service provider's truck that caught fire while in use, the parties told a Texas federal court.
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May 23, 2023
Insurer Says No Coverage For Meal Delivery Co.'s Recall
An excess insurer for a plant-based meal delivery service told a New York federal court Tuesday it doesn't owe coverage for losses the company incurred following a product recall because the company intentionally included the unsafe ingredient and thus it isn't considered an accidental contamination.
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May 23, 2023
Insurer Wants Coverage Denial For $10.5M Construction Flaws
An insurer asked a Maryland federal judge again to dismiss a claim that it acted in bad faith when denying $10.5 million in coverage for a contractor's construction errors in a military base school, alleging the contractor already submitted an identical claim to its previous insurer.
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May 23, 2023
Med Center Seeks Early Dismissal In $2.3M Geico Suit
Geico's attempt to recover $2.3 million from a group of pain management providers concerning bills for no-fault insurance patients should be tossed, the providers told a New Jersey federal court, saying the court lacks jurisdiction because the disputed benefits are subject to arbitration.
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May 23, 2023
Mushroom Co. Says Insurer, Broker Must Face Breach Claims
A Texas mushroom grower and transportation company said its insurance broker and an AIG unit can't escape claims they failed to provide proof of insurance to a state agency, arguing it sufficiently showed they had assumed a duty to the company that they failed to follow through on.
Expert Analysis
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Navigating High Court's Options In Insurer Choice Of Law
Depending on how the U.S. Supreme Court approaches the question of when insurers may invoke choice-of-law clauses in maritime contracts to dodge state-specific liability, the Great Lakes v. Raiders Retreat Realty decision may mean significant changes not only for admiralty law disputes, but for the insurance industry more broadly, say Lara Cassidy and Adriana Perez at Hunton.
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Practical Tips For Managing Bank D&O Liability Risk
With the failures of Silicon Valley Bank and Signature Bank potentially inspiring regulators to increase scrutiny of management at similar institutions, banking directors and officers should mitigate personal liability risks through keen attention to sound banking practices and regulators' announced priorities, say attorneys at Perkins Coie.
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Establishing A Record Of Good Faith In Mediation
Viacom v. U.S. Specialty Insurance, and other recent cases, highlight the developing criteria for determining good faith participation in mediation, as well as several practical tips to establish such a record, says Richard Mason at MasonADR.
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Using ChatGPT To Handle Insurance Claims Is A Risky Move
ChatGPT gets some insurance law questions surprisingly wrong, and while it handles broader coverage concepts significantly better, using it to assist with coverage questions will likely lead to erroneous results and could leave insurers liable for bad faith, says Randy Maniloff at White and Williams.
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Del. Ruling Could Affect D&O Claims Beyond SPACs
A Delaware state court recently held in Clover Health v. Berkley Insurance that directors and officers of a post-merger entity were insured persons under a special-purpose acquisition company's D&O policy, a ruling that could have potential ramifications for future D&O claims in Delaware outside of SPAC deals, say Geoffrey Fehling and Janine Hanrahan at Hunton.
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A Missing Issue In 'Blank Space' Insurance Ruling
As Norwegian Hull Club v. North Star heads to trial in Florida federal court, the most interesting part of the court opinion denying summary judgment is the argument it doesn't address — contra proferentem, which could have been used to resolve the case's blank space ambiguity in the policyholder's favor, say Jeffrey Mikoni and Scott Greenspan at Pillsbury.
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High Court Ax Of Atty-Client Privilege Case Deepens Split
The U.S. Supreme Court's recent dismissal of In re: Grand Jury as improvidently granted maintains a three-way circuit split on the application of attorney-client privilege to multipurpose communications, although the justices have at least shown a desire to address it, say Trey Bourn and Thomas DiStanislao at Butler Snow.
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The Wide Oversight Implications Of Del. McDonald's Ruling
The Delaware Chancery Court's recent ruling that a McDonald's officer had oversight obligations on par with directors has wide-reaching implications for Delaware corporate law, including precedent for the court to hear sexual harassment claims, say attorneys at Fried Frank.
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How Courts Are Clarifying D&O Policies' Bump-Up Provisions
The Seventh Circuit's recent decision in Komatsu Mining v. Columbia Casualty provides long-awaited appellate guidance on the inadequate consideration provision in directors and officers insurance — and the Fourth Circuit may provide more in its forthcoming ruling in Towers Watson v. National Union Fire Insurance, says Andrew Paliotta at Cozen O’Connor.
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Crypto Coverage After FTX Fall: Crime And Custody Coverage
Cryptocurrency firm FTX's recent implosion provides a case study for potential crypto exposure under traditional insurance policies, and suggests carriers should ask some basic underwriting questions, including whether a company engages in transactions involving cryptocurrencies or holds digital assets in custody, says Anjali Das at Wilson Elser.
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Wis. High Court Ruling May Open Door To Coverage Exception
The Wisconsin Supreme Court’s recent decision in Dostal v. Strand finding that an insurer had to defend a civil action following the defendant's criminal conviction on the same facts nonetheless may suggest an exception to the complaint test for determining an insurance company's defense obligation, say David Hollander and Clementine Uwabera at Stafford Rosenbaum.
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Crypto Coverage After FTX Fall: Accountant And Atty Liability
The recent fall of cryptocurrency firm FTX highlights complexities regarding accounting and tax reporting for digital assets, and reveals lawyers’ potential liability exposure when providing services to crypto firms — as a result, insurers may face unintended vulnerabilities related to this nebulous landscape, say Anjali Das and Farzana Ahmed at Wilson Elser.
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Anticipating Tech Market Volatility With R&W Policies
Technology executives, investors and their advisers should understand how representations and warranties insurance works ahead of a potential rise in claims activity and as deal makers focus on maximizing existing deals' value amid economic uncertainty, says Eric Larson at Morris Manning.