Specialty Lines
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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.
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May 23, 2023
SVB Execs Can Tap D&O Insurance, Bankruptcy Court Says
SVB Financial Group directors and officers can tap into the company's D&O coverage tower to use in various securities class actions and other litigation, a New York bankruptcy court ruled, saying speculative harm against debtor SVB doesn't outweigh the directors' present need for insurance access.
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May 23, 2023
Law Firm Tells 11th Circ. Insurer Must Defend False Ad Row
A Washington, D.C., law firm urged the Eleventh Circuit to reverse its insurer's early win in a dispute over the insurer's refusal to cover underlying false advertising allegations against the firm, telling the court a Florida federal court interpreted its professional liability policy too narrowly.
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May 23, 2023
Title Insurer Wants Out Of 'Abutter's Rights' Dispute
An insurer isn't obliged to ensure that a policyholder had unlimited access to a property beside its covered parcel, the insurer told an Oklahoma federal court, saying the issued title policy offers no "abutter's rights" to the adjacent land.
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May 22, 2023
5th Circ. Agrees Intentional Toxic Dumping Not Covered
The Fifth Circuit backed a federal court's ruling that Crum & Forster Specialty Insurance Co. has no duty to defend an animal feed manufacturer accused of dumping toxic chemicals into a city's sewer system, upholding that no coverage is available because the underlying allegations describe intentional conduct.
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May 22, 2023
Jury Finds Insurer Liable For $7.8M In Oil Well Coverage Spat
A jury in Texas federal court found that a Berkley Insurance Co. unit is liable for roughly $7.8 million in damages in a coverage fight stemming from a 2015 oil well blowout.
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May 22, 2023
Clinic Says Ariz. BCBS Owes Over $14M In Unpaid Claims
An Arizona medical center is suing Blue Cross Blue Shield of Arizona in federal court, alleging the insurer failed to pay more than $14 million in claims patients made through the clinic and vastly underpaid an additional $550,000 in claims.
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May 22, 2023
Birth Date Is Focus Of Multimillion-Dollar Death Benefits Spat
A wealth and investment management provider can't collect the death benefits under two $5 million life insurance policies, a life insurer told a Delaware federal court, saying the cash surrender value is appropriate because the insured outlived the policies, despite the ages provided on the applications.
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May 22, 2023
State Farm Says Clinics Owe Over $450K For Fraud Scheme
State Farm said 13 Michigan clinics and doctors owe more than $450,000 for a no-fault benefit scheme in which the insurer was billed repeatedly for diagnostic tests that were either not medically necessary or never performed, according to a complaint filed in Michigan federal court.
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May 19, 2023
Firm Gets Partial Atty Fees Win In Loan Fraud Coverage Suit
A law firm scored a partial win when a Florida federal court ruled it could get roughly $65,000 of the nearly $100,000 in attorney fees it requested after prevailing in a coverage fight over a lawsuit involving the firm's approval of two loans taken by fraudsters.
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May 19, 2023
Hospital, Insurer Seek To Settle $3M Fraud Coverage Suit
An Illinois nonprofit hospital system and Great American Insurance Co. asked Friday to be ordered into a settlement conference to potentially resolve a $3 million employee theft coverage dispute before it heads to a jury trial scheduled for September.
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May 19, 2023
Widow Says NY Life's Benefit Payout Suit Must Be Dismissed
New York Life Insurance Co.'s interpleader dispute over the disbursement of a man's $5 million life insurance policy should be tossed, the man's widow said Friday, telling a Tennessee federal court that it does not have jurisdiction over the case.
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May 19, 2023
Insurer Off The Hook For Quiet Title Suit Defense, Judge Says
An insurer for a homeowners association doesn't have to defend it against a quiet title suit brought by a couple seeking ownership of a plot they landscaped for years, a California federal judge said, finding the suit did not seek damages covered under the policy.
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May 19, 2023
Travelers Says No Defense Owed Atty Who Stole From Client
Travelers told a Pennsylvania federal judge on Thursday that the company is unable to provide liability coverage to a law firm and one of its attorneys in a case connected to the lawyer's conviction for stealing over $900,000 from the sale of a client's home during the client's divorce proceedings.
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May 18, 2023
FDIC Seeks $165M From Defunct La. Bank's Ex-CEO, Others
The Federal Deposit Insurance Corporation filed suit against the convicted former CEO and several former directors of a failed bank in Louisiana federal court, seeking to recover roughly $165 million in losses the FDIC claims the bank suffered at the hands of the defendants.
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May 18, 2023
Commercial Property Insurance Prices Spiking, Brokers Say
Prices for commercial property insurance increased dramatically in the first quarter, largely a consequence of high inflation and significant natural disaster losses, according to a new report from a trade group representing brokers and agents.
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May 18, 2023
Insurers, Health Care Co. Seek More Time For Settlement Talks
An Illinois federal judge granted a 60-day stay to three insurers and Health Care Service Corp. Thursday, giving the parties more time to settle a coverage dispute over legal costs HCSC incurred after several of its executives were accused of pocketing profits in an underlying suit that's been settled.
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May 18, 2023
Mattress Co. Construction Damage No Accident, Insurer Says
A mattress store's insurer asked a Colorado federal judge to find that it didn't act in bad faith when it denied coverage for a cracked slab at the store's warehouse, arguing that the damage doesn't qualify as a covered accident.
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May 18, 2023
Insurer Nixes $10M Under Armor Investigation Costs Claims
Endurance American Insurance Co. agreed Thursday to end its $10 million coverage reimbursement case against Under Armour Inc. related to government investigations of the sportswear maker for potential federal securities law violations.
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May 18, 2023
Couple Say Opening Geico Field Office Led To $1.2M Loss
A couple are accusing Geico of misleading them into an agreement to open a Geico field office franchise, telling a Wisconsin federal court that the insurer's false representations resulted in a more than $1.2 million loss to the couple.
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May 18, 2023
Citrus Grower's Pollution Coverage Suit Dismissed As Unripe
A Florida federal judge on Thursday dismissed an Orlando-area citrus company's complaint seeking coverage for remediation from its insurer, calling the case premature because of unknown damages.
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May 18, 2023
No Coverage For Firm Snared In Fed Probe, 4th Circ. Says
A Maryland law firm and its former partner cannot get professional liability coverage for defense costs spent complying with a federal criminal investigation into a client, the Fourth Circuit ruled Thursday, saying there were no written demands for relief.
Expert Analysis
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Breach Cases Hint At Liability Coverage For Mobile Losses
Although federal courts haven't ruled on whether commercial general liability insurance covers companies' revenue losses when customers cannot use their mobile devices, recent cases involving Target and Home Depot payment card data breaches suggest that coverage may be available, says Morgan Churma at Farella Braun.
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Insurance Perils For Health Providers Using 3D-Printing Tech
As the medical polymer market quickly grows amid burgeoning demand for the 3D printing of medical devices, a recent case involving liability for a 3D-printed dental implant surgery exposes the potential gap in medical malpractice and product liability coverage for health care professionals designing and using these products, says Paul Farquharson at Semmes.
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Insurance Ruling Provides Lessons On Cyberattack 'Twofers'
A recent Minnesota federal court decision, SJ Computers v. Travelers, illustrates how an insurance policy with separate limits for computer fraud and social engineering fraud applies to a cyberattack with both components, say Joshua Polster and Laurel Fresquez at Simpson Thacher.
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D&O Insurer Challenges Amid Market, Economic Turbulence
The decline of record market capitalizations, compounded by high litigation and securities class action exposure, leaves directors and officers insurance carriers and issuers facing economic contraction as companies grapple with the institutionalization of environmental, social and governance investment priorities amid a new Cold War, say Nessim Mezrahi and Stephen Sigrist at SAR.
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Risk Mitigation In Face Of Rising Legal Malpractice Claims
As the recent rise in frequency and cost of legal malpractice claims is expected to continue amid global high inflation and economic uncertainty, law firms and insurers would be wise to evaluate key risk areas and consider six steps to minimize exposure, say Nicole Shapiro and Cory Stumpf at Atheria Law.
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2 Illinois Cases Poised To Shape BIPA Litigation Landscape
The Illinois Supreme Court's anticipated rulings in Tims v. Black Horse and Cothron v. White Castle could alter the outlook for Biometric Information Privacy Act litigation, putting an end to companies' and insurers' willingness to pour money into expensive settlements, say Pamela Signorello and Megan Brown at Wiley.
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What Del. Officer Exculpation Law Means For D&O Insurance
Following a recent Delaware code amendment to allow corporate exculpation of officers, businesses considering whether to update their articles of incorporation accordingly should factor in the potential benefits respecting the availability and cost of directors and officers insurance, say Bryan Coffey and Peter Gillon at Pillsbury.
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7th Circ. 'Reasonable Costs' Ruling Is A Win For Policyholders
The Seventh Circuit's decision in USA Gymnastics v. Liberty Insurance last month establishes useful precedent for policyholders, affirming and expanding on its rule that defense costs are presumed to be reasonable and necessary when insurers breach their duty to defend, say attorneys at Reed Smith.
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Insurance Implications For Aircraft Grounded In Russia
Russia's invasion of Ukraine and new law that allows the government to ground planes leased from foreign companies threatens massive losses for insurers in the aviation insurance market and necessitates a closer look at which policy exclusions may apply, say attorneys at Hinshaw.
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What Snap Removal Debate Means For Insurance Disputes
A potential circuit split regarding the permissibility of snap removal to federal court, which allows defendants to circumvent the forum defendant rule, is particularly a concern in insurance cases due to the difficulty of removing such cases, and the perception that some state courts are more favorable to policyholders, says Greg Mann at Rivkin Radler.
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How D&O Insurers Can Limit Bankruptcy Exclusion Risks
Amid challenging economic conditions, directors and officers underwriters can't always rely on insolvency exclusions to protect against insured's bankruptcy claims, but there are ways to limit risk exposure, like by adding creditor exclusions or sublimiting coverage, say Kristine Christ at Crum & Forster, and Scott Schechter and Joshua DiLena at Kaufman Borgeest.
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Questions Remain On Computer Fraud Coverage For Phishing
There are questions regarding the applicability of computer fraud coverage to phishing scheme losses in the wake of the Ninth Circuit's decision in Ernst & Haas v. Hiscox earlier this year, with a backdrop of differing case results and evolving fact patterns over the past few years, say Robert Callahan and Melissa D’Alelio at Robins Kaplan.
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Insurers Must Be Vigilant About Cannabis Lounge Risks
Because cannabis lounges face a number of unique risks, such as overserving cannabis to patrons, insurers and risk management providers must be able to recognize and properly address the full range of potential liabilities, say Jonathan Isaacson and Adam Nicolazzo at Kaufman Dolowich.