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Mealey's Emerging Insurance Disputes

  • July 28, 2025

    4th Circuit Affirms Ruling In Dispute Over Lender’s Insurance Premiums

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals held that a mortgage lender did not violate the Credit Grantor Closed End Credit Provisions (CLEC) by retaining a portion of the appellant’s insurance premiums as a commission, affirming a lower federal court’s ruling that granted the lender’s motion for judgment on the pleadings.

  • July 28, 2025

    U.S. Tax Court Clarifies, Maintains Ruling In Favor Of IRS In Microcaptive Case

    WASHINGTON, D.C. — Stating that “the Court failed to fully clarify two important issues” in a March opinion, a U.S. Tax Court judge issued a supplemental memorandum opinion in a consolidated case maintaining that a purported captive insurance arrangement could not exclude premiums from income during the 2015 and 2016 tax years because it is not considered insurance and that it must recognize $781,977 in income for the 2015 tax year because the provisions allowing deferral of unearned premiums do not apply to entities that are not insurance companies.

  • July 28, 2025

    Duty To Indemnify Owed For Settlement, Insured Says In Newly Filed Complaint

    DALLAS — An insurer owes a duty to indemnify an insured for the settlement of an underlying suit filed against the insured because there is no evidence that the damages in the underlying suit were caused by pollutants, the insured contends in a July 25 complaint filed in Texas federal court.

  • July 25, 2025

    Delaware High Court Remands No-Action Issue In D&O Coverage Dispute

    WILMINGTON, Del. — The Delaware Supreme Court affirmed a lower court’s grant of insurers’ motions to dismiss a company and its CEOs’ lawsuit seeking directors and officers liability coverage under 2023 policies for an underlying lawsuit alleging that they undersold the value of investors’ shares in the company and its parent company but remanded for further consideration of issues related to the “No Action” clause under the 2021 insurance policies.

  • July 25, 2025

    5th Circuit Affirms Ruling For IRS In Tax Row Over Purported Microcaptives

    NEW ORLEANS — Upholding a ruling for the U.S. Internal Revenue Service in a federal tax dispute over purported microcaptive insurance arrangements, the Fifth Circuit U.S. Court of Appeals interpreted part of the Internal Revenue Code “to determine when supervisory approval was required, an issue of first impression in this circuit.”

  • July 25, 2025

    New York Justice Partly Grants Insured’s Request To Review Discovery Order

    NEW YORK — A New York justice granted in part a commodities investment manager insured’s request for review and clarification of a judicial hearing officer’s ruling regarding document discovery in an excess professional liability coverage dispute arising from underlying claims that the insured conspired to commit fraud.

  • July 24, 2025

    Vendor Dismisses Insurer From Breach Of Contract Claim; 1 Defendant Remains

    NEW YORK — The plaintiffs in dispute involving reinsurance and a warehouse in Afghanistan filed a notice of voluntary dismissal in a federal court in New York, dismissing its breach of contract claim against an insurer; the dismissal is without prejudice with each party to bear their own attorney fees and costs.

  • July 23, 2025

    Insurer, Engineer File Verbal Notice Of Settlement Of Professional Negligence Suit

    CHEYENNE, Wyo. — A homeowners insurer and a mechanical engineering firm indicated to a federal court in Wyoming that they have reached a settlement of the insurer’s negligence lawsuit arising from water damage that was allegedly caused by improperly installed plumbing.

  • July 22, 2025

    Insurer: No Coverage Owed For Injuries Caused By Intentional Shooting Rampage

    RALEIGH, N.C. — A homeowners insurer filed suit in a North Carolina federal court seeking a declaratory judgment that it has no duty to defend and indemnify against an underlying lawsuit alleging that an unemancipated minor went on a shooting rampage that killed several people in a Raleigh neighborhood, contending that the underlying injuries were caused by intentional acts and not by an “occurrence” pursuant to the policy.

  • July 22, 2025

    Insurer Appeals Ruling In D&O Coverage Dispute Over Unfair Dilution Claims

    SAN DIEGO — A business and management indemnity insurer on July 21 filed a notice of appeal of a California federal court’s holding that it has a duty to defend and indemnify its insured against an underlying unfair dilution lawsuit because the “dilution claims exception” to the “insured vs. insured” exclusion restores directors and officers liability coverage.

  • July 22, 2025

    Insurer: Exclusion Bars Coverage For Blake Lively’s Suit Against Justin Baldoni

    NEW YORK — A management liability insurer filed suit in a New York federal court on July 21 seeking a declaration that it has no duty to provide coverage for Blake Lively’s sexual harassment, hostile work environment and retaliation action against Justin Baldoni, Wayfarer Studios LLC, It Ends With Us Movie LLC and its movie studio officers, asserting that the policy’s prior knowledge exclusion bars coverage.

  • July 22, 2025

    Michigan High Court Refuses To Disturb No Coverage Ruling For Personal Injury Suit

    LANSING, Mich. — The Michigan Supreme Court denied an invitation to review an appeals court’s ruling that affirmed a lower court’s holding that a homeowners insurance policy’s intentional acts exclusion bars coverage for an underlying personal injury lawsuit, saying it is not persuaded that the questions presented should be reviewed by the state’s highest court.

  • July 22, 2025

    Doctor Insured: Hidden Cameras Constitute Physical Alteration, Loss Of Use

    NEW YORK — A doctor argues to the Second Circuit U.S. Court of Appeals that a lower federal court erred in dismissing her breach of contract lawsuit seeking business interruption and umbrella coverage for her losses arising from discovery of hidden cameras at her dermatology office, asserting that the hidden cameras constituted a physical alteration and loss of use and satisfied her insurance policy’s direct physical loss or damage requirement.

  • July 22, 2025

    No Coverage Owed For Damaged AC Units Because Hotel Was Vacant, Panel Affirms

    CHICAGO — The Seventh Circuit U.S. Court of Appeals determined that a lower federal court’s discovery sanctions against a hotel owner insured were “an appropriate, proportionate response” to the insured’s failure to produce requested documents as to the hotel’s occupancy and not an abuse of discretion, affirming a lower court’s ruling that there was no coverage owed for the hotel’s damaged air conditioner units because the hotel was vacant at the time of the vandalism and the insurer did not act in bad faith.

  • July 21, 2025

    2nd Circuit Reverses Ruling In Free Speech Suit Arising From Insurance Program

    NEW YORK — On remand from the U.S. Supreme Court, the Second Circuit U.S. Court of Appeals held that a former superintendent of the New York department that regulates insurance is entitled to qualified immunity on the National Rifle Association of America’s (NRA) First Amendment coercion and retaliation claims against New York state officials and the department “because of the markedly attenuated link between facially valid law enforcement against a third-party associate and an infringement of a plaintiff's First Amendment rights” and reversed a lower federal court’s order denying the former superintendent and the department’s motion to dismiss the NRA’s suit alleging that she unconstitutionally threatened or coerced an insurer or other entities to stifle its speech.

  • July 21, 2025

    Judge: Assault & Battery Exclusion Bars Coverage For Suit Over House Cleaner’s Death

    GALVESTON, Texas — A Texas federal judge granted a commercial general liability insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify its insured for an underlying negligence lawsuit brought against its contractor insured, finding that coverage is barred because the underlying claims arise from an assault and battery, which resulted in the death of a house cleaner.

  • July 18, 2025

    Panel: Insurer Has No Duty To Indemnify $58.5M Judgment Over Mishandled Bodies

    PASEDENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that a commercial insurer has no duty to indemnify a convicted felon for a $58.5 million underlying state court judgment for his mishandling of donated bodies, finding that the appellants are collaterally estopped from relitigating the issue of the felon’s relationship with the insured company.

  • July 17, 2025

    Panel Affirms Dismissal Of Assignee’s Coverage Suit Arising From Infant’s Death

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of insurers’ motion to dismiss an insured’s assignee’s breach of contract lawsuit seeking $300,000 in coverage for an underlying wrongful death settlement arising from the drowning death of his infant son, finding that the assignee failed to sufficiently assert that he incurred a “bodily injury” that might otherwise entitle him to coverage under the homeowners insurance policy.

  • July 17, 2025

    Judge Certifies Class In Suit Challenging Homeowners Insurer’s ACV Calculation

    SAN FRANCISCO — A federal judge in California granted plaintiffs’ motion for class certification in their breach of contract, bad faith and unfair competition lawsuit alleging that their homeowners insurer has a common practice of depreciating sales tax when calculating actual cash value (ACV) benefits to insureds.

  • July 16, 2025

    5th Circuit Vacates, Remands Ruling On IP Exclusion In Coverage Dispute

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals vacated a lower federal court’s ruling that an insurance policy’s intellectual property (IP) exclusion unambiguously barred coverage for an underlying lawsuit alleging that an insured  bribed and induced a competitor’s employees to wrongfully misappropriate confidential information and remanded, holding that the insured set forth a reasonable construction of the exclusion.

  • July 15, 2025

    Insured Appeals Denial Of Motion For Relief From Judgment In Coronavirus Suit

    ELIZABETH CITY, N.C. —A hotel and restaurant owner insurer notified a North Carolina federal court that it is asking the Fourth Circuit U.S. Court of Appeal to review the court’s recent denial of its motion for relief from a 2021 judgment dismissing its breach of contract and bad faith lawsuit arising from the coronavirus pandemic.

  • July 14, 2025

    9th Circuit Affirms Dismissal Of Driver’s Claim For Larger COVID-19 Refunds

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed the dismissal of a driver’s class action against her insurer, GEICO, for violating California’s unfair competition law (UCL) by providing drivers an insufficient rebate on premiums after the COVID-19 pandemic, finding that the insurer was protected by the “‘safe harbor’” doctrine as the state insurance commissioner approved its rebate amounts.

  • July 07, 2025

    Judge Dismisses Bad Faith Suit Against Employment Practices Liability Insurer

    BUTTE, Mont. — A federal judge in Montana granted an employment practices liability insurer’s motion to dismiss with prejudice a bad faith coverage lawsuit arising from claims that a hospital insured and its employees wrongfully harassed and retaliated against other employees for reporting patient abuse and neglect.

  • July 03, 2025

    Delaware Judge: SEC’s Tolling Request Not Securities Claim Under D&O Policy

    WILMINGTON, Del. — A Delaware judge denied an insured’s motion for partial summary judgment in its breach of contract lawsuit seeking directors and officers liability coverage for the more than $26 million in costs that it incurred in connection with an underling settlement with the U.S. Securities and Exchange Commission, finding that a tolling request by the SEC is not a securities claim under the policy and, even if it was, the tolling request does not seek redress in response to any corporate act to trigger coverage.

  • July 02, 2025

    Alaska High Court Partly Reverses Ruling In Suit Arising From Lapsed Policy

    ANCHORAGE, Alaska — The Alaska Supreme Court affirmed a lower court’s holding that an insurer failed to send a general contractor insured notice of the nonrenewal of its workers’ compensation and employers liability insurance policy pursuant to a statute and, therefore, breached its contract with the insured, but reversed the lower court’s determination of when prejudgment interest began to accrue and remanded for recalculation of the interest.