Mealey's Emerging Insurance Disputes : Mealey's : Legal News & Analysis

Mealey's Emerging Insurance Disputes

January 07, 2025
5th Circuit Reverses, Remands Judgment In Favor Of Professional Liability Insurer

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals held on Jan. 6 that a lower federal court abused its discretion when it denied an insured the opportunity to amend its original complaint against its professional liability insurer, reversing the lower court’s judgment in favor of the insurer and remanding for further proceedings.
January 07, 2025
Delaware Judge Rules On Summary Judgment Motions In D&O Coverage Dispute

WILMINGTON, Del. — A Delaware judge held that an underlying securities class action falls under a 2018-2019 directors and officers liability insurance policy period but that an underlying consumer class action falls outside both the 2017-2018 and 2018-2019 policy periods and is not interrelated with any covered claims, ruling on various motions for summary judgment brought by a health technology business and its primary and excess insurers.
January 07, 2025
Federal Judge Tosses Suit Alleging Insurer Fraudulently Down-Coded Medical Devices

MINNEAPOLIS — The same day a manufacturer and seller of an electrotherapy medical device and its insurer filed a stipulation of dismissal, a federal judge in Minnesota dismissed with prejudice the insured’s breach of contract and deceptive trade practices lawsuit alleging that the insurer has a “blanket corporate policy” of fraudulently down-coding and short-paying for the insured’s H-Wave medical devices that has resulted $1.3 million in injuries to the insured.
January 06, 2025
11th Circuit Denies Insured’s Petition For Rehearing In D&O Coverage Dispute

ATLANTA — An 11th Circuit U.S. Court of Appeals panel denied an insured’s petition to reconsider its finding that an insurer has no duty to provide directors and officers liability coverage for investors' rescission demands against the insured because the claims were first made before the policy’s inception, standing by its ruling that agreed with a lower court’s judgment in favor of the insurer but vacated and remanded for the lower court to amend the judgment so it is based on a theory of exclusion and not recission.
January 06, 2025
Idaho High Court Reinstates Negligence, Respondeat Superior Claims Against Insurer

BOISE, Idaho— The Idaho Supreme Court reversed a lower court’s dismissal of an insured’s negligence/respondeat superior claims against its insurer in its lawsuit alleging the insurer was vicariously liable for an insurance agent’s negligence in failing to provide information on the availability of landslide coverage and failing to renew coverage for a home construction project, remanding for further proceedings.
January 06, 2025
Freddie Mac, Insurer Reach Settlement In Directors And Officers Coverage Dispute

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and Certain Underwriters at Lloyd’s of London filed a notice in a District of Columbia federal court indicating that they have settled Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
January 06, 2025
Judge: No Coverage Owed For Insured’s Alleged $1M Loss Arising From Data Theft

HOUSTON — A federal judge in Texas granted a businessowners insurer’s motion for summary judgment in its website and marketing company insured’s lawsuit seeking coverage for its nearly $1 million in lost revenue due to theft of its intellectual property by employees, finding that no coverage is owed because the insured did not sustain direct physical damage to its covered property.
January 06, 2025
Judgment Granted For Insurers In Dispute Over MDL Opioid Liability Coverage

NEW CASTLE, Del. — A Delaware state court judge granted summary judgment for insurers in their declaratory judgment action seeking a judgment that they have no duty to indemnify or defend insured AmerisourceBergen, a distributor of prescription opioids, in multidistrict litigation, finding that because the suits seeking to recover economic losses do not seek damages related to bodily injury, the insurers have no duty to defend or indemnify under the policies.
January 06, 2025
Judge: Bump-Up Exclusion Does Not Bar D&O Coverage For Securities Class Action

WILMINGTON, Del. — A Delaware judge on Jan. 3 ruled in favor of an insured in its breach of contract and declaratory judgment lawsuit seeking directors and officers coverage for an underlying securities class action, rejecting the insurers’ argument that the policy’s bump-up exclusion barred coverage.
January 06, 2025
Some Defendants Reach Undisclosed Settlement In Jet Coverage Lawsuit

SAN FRANCISCO — A few defendants have been dismissed with prejudice from an international aviation insurance coverage dispute involving Russia’s invasion of Ukraine pursuant to a confidential settlement approved by a California state court judge.
January 03, 2025
Intentional Loss, Abuse Exclusions Bar Coverage, Maine High Court Affirms

PORTLAND, Maine — The Maine Supreme Judicial Court affirmed a lower court’s finding that a homeowners insurer has no duty to indemnify its insured’s assignee for the balance of a $300,000 consent judgment arising from underlying claims that the insured’s minor nephew physically, sexually and emotionally abused another minor in the insured’s care, determining that the policy’s “intentional loss” and “abuse” exclusions bar coverage.
January 03, 2025
7th Circuit Dismisses Insurer’s Appeal As Moot In Wrongful Death Coverage Suit

CHICAGO — The Seventh Circuit U.S. Court of Appeals on Jan. 2 dismissed as moot an insurer’s appeal in a dispute over coverage for an underlying wrongful death and negligence lawsuit arising from the death of an elderly assisted-living facility resident, finding that the dispute over the lower court’s stay order evaporated with the dismissal of the underlying action.
January 03, 2025
Lawsuit Filed By 3 Professional Models Against Insurer To Proceed, Judge Says

BRUNSWICK, Ga. — A lawsuit filed by three professional models against the insurer of a club that used the models’ images without consent will proceed against the insurer because the models’ underlying lawsuit against the insured alleged sufficient facts in support of a claim that the misappropriation of the images was negligent, a Georgia federal judge said in finding that the insurer’s knowing violation exclusion does not clearly bar coverage.
December 31, 2024
IRS Asks 5th Circuit To Affirm Tax Court Ruling In Row Over Purported Microcaptives

NEW ORLEANS — Urging the Fifth Circuit U.S. Circuit Court of Appeals to affirm a ruling that certain purported microcaptive insurance arrangements were not entitled to federal tax benefits, the U.S. commissioner of Internal Revenue argues in part that the “Taxpayer can hardly claim reversible error or fault the Tax Court for applying a legal framework that Taxpayer himself advocated.”
December 24, 2024
Tax Court Briefing On Economic Substance Doctrine Continues In Microcaptive Case

WASHINGTON, D.C. — In their latest filings in a U.S. Tax Court dispute over the “economic substance doctrine” in consolidated cases involving purported microcaptive insurance companies, the commissioner of Internal Revenue argues that a “threshold” determination of relevance is not required and the petitioners contend that the bulk of the amicus curiae briefs support their contrary position, among other things.
December 20, 2024
3rd Circuit Reverses, Deems Joint Underwriting Association A Public Entity

PHILADELPHIA — The Third Circuit U.S. Court of Appeals reversed in part and affirmed in part a district court’s ruling that issued an injunction preventing enforcement of certain legislative changes to the state-created Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides coverage to health care providers, including those previously insured by insurers in liquidation, finding that the JUA is a public entity rather than a private one due to the state’s “legally protectable interest in the JUA.”
December 18, 2024
Tax Court Ruling In Row Over Purported Microcaptive Is Appealed To 10th Circuit

DENVER — For at least the second time this year, plaintiffs who unsuccessfully sued the commissioner of Internal Revenue in U.S. Tax Court over purported microcaptive insurance have filed an appeal; this one is in the 10th Circuit U.S. Court of Appeals.
December 16, 2024
N.C. Supreme Court: Retailer’s COVID-19 Loss Excluded By Policy As Contamination

RALEIGH, N.C. — Ruling that a contamination exclusion in a clothing retailer insured’s “all-risk” commercial insurance policy excluded the insured’s claimed losses arising from the COVID-19 pandemic, the North Carolina Supreme Court on Dec. 13 — while disagreeing with its reasoning — affirmed the judgment of a state appellate court, which in turn affirmed a trial court’s dismissal of the insured’s lawsuit seeking coverage under the policy for its losses.
December 16, 2024
N.C. High Court Rules COVID-19 Lockdowns Caused Restaurants’ Direct Physical Loss

RALEIGH, N.C. — The North Carolina Supreme Court on Dec. 13 reversed the judgment of a state appellate court that had reversed a trial court’s grant of partial summary judgment in favor of restaurant insureds in a COVID-19 coverage dispute, concluding that the restaurants’ insurance policies did not “unambiguously bar coverage when government orders and threatened viral contamination deprived the policyholder restaurants of their ability to physically use and physically operate property at their insured business premises.”
December 13, 2024
Hawaii Supreme Court Considers Subrogation Issues For Wildfire Settlement

HONOLULU — How the subrogation rights of property and casualty insurance carriers bear on a proposed global settlement of claims related to the August 2023 Maui wildfires is the focus of three reserved questions the Hawaii Supreme Court is considering, with some recent filings involving how reinsurance could be affected.
December 13, 2024
3rd Circuit Affirms Dismissal Of Coverage Dispute Arising From Construction Accident

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of a commercial general liability insurer’s motion to dismiss a coverage lawsuit arising from a construction accident, agreeing with the lower court that the insurer had no duty to defend a building owner because it was not an “additional insured” under the CGL policy’s additional insured endorsement.
December 11, 2024
COMMENTARY: Insurance In The Limelight: Unique Insurance Coverage Considerations For Media Platforms Airing Documentaries And Related Original Content

By Meredith Elkins, Shafkat Rakib and Justin Javier
December 13, 2024
Justice: Subcontractor’s Insurer Has No Duty To Defend Against Personal Injury Suit

NEW YORK — A New York justice held that a subcontractor’s insurer has no duty to defend a general contractor against an underlying personal injury lawsuit that occurred at a construction site, finding that the underlying lawsuit does not allege facts implicating the subcontractor at all.
December 12, 2024
Real Estate Law Firm, Cyber Security Insurer Settle Coverage Dispute

ASHEVILLE, N.C. — A real estate law firm, its insurer and a third-party administrator filed a joint stipulation asking a North Carolina federal court to dismiss with prejudice the firm’s lawsuit seeking coverage under a cybersecurity policy for gross negligence and obstruction of justice cross-claims arising from a “cyber incident” in 2021 that resulted in the misdirection of funds.
December 12, 2024
Judge: Assignee Lacks Standing To Recover Emotional Distress Damages From Insurer

CHICAGO — A California federal judge held that an assignee cannot establish standing under California Insurance Code Section 11580(b)(2) to recover her emotional distress damages from an insurer as judgment creditor of her former employer, granting the insurer’s motion to dismiss her lawsuit arising from an underlying discrimination judgment in her favor but allowing the assignee leave to amend one of her claims.