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Mealey's Insurance

December 18, 2023
Panel Affirms More Than $25M Judgment Against Insurer In Construction Defects Suit

COLUMBIA, S.C. — The South Carolina Court of Appeals affirmed a trial court’s judgment of more than $25 million against a commercial general liability insurer, agreeing with the lower court’s finding that an insured breached its contract and acted in bad faith in refusing to defend its insured subcontractor and a general contractor, named as an additional insured, against underlying construction defects suits arising out of water damage to townhomes because the evidence shows that all of the parties believed that the policies provided coverage for completed operations.
December 13, 2023
Captive Cell Reinsurer Is Allowed To Intervene In Row Between Insurer And MGA

NEW ORLEANS — After a Louisiana federal magistrate judge found that a captive cell reinsurer “is entitled to intervene as of right” in an insurer’s case against a managing general agent (MGA), the reinsurer filed an intervenor complaint for breach of contract and declaratory judgment alleging that it is due most premium income purportedly held by the MGA.
December 12, 2023
Minnesota Panel: Insured Failed To Allege Coronavirus Was Present At Its Properties

ST. PAUL, Minn. — A Minnesota appeals panel on Dec. 11 affirmed a lower court’s ruling dismissing an insured’s breach of contract lawsuit against its insurers, finding that the insured failed to assert that the coronavirus was present at and contaminated its insured casino and golf course properties and, therefore, it did not cause direct physical loss or damage.
December 12, 2023
Insurer Seeks Reconsideration Of Denial Of Dismissal In AFFF Coverage Action

CHARLESTON, S.C. — An insurance company has filed a reply brief in South Carolina federal court seeking reconsideration of an opinion and order denying its motion to dismiss a coverage dispute related to injuries from the firefighting substance aqueous film forming foam (AFFF) in the multidistrict litigation for AFFF, arguing that the court does not have jurisdiction over it because the insurer has no duty to defend under the policy at issue.
December 12, 2023
Dental Practice Incurred No Direct Physical Loss, Insurers Argue To Pa. High Court

PITTSBURGH — Insurers filed a reply brief in the Pennsylvania Supreme Court defending their appeal of a Pennsylvania Superior Court majority’s ruling that at the very least, it is reasonable to interpret the phrase “direct physical loss of . . . property” to encompass the loss of use of a dental practice’s property due to the spread of the coronavirus “absent any actual damage to property.”
December 12, 2023
Insured Failed To Show Coronavirus Is A Pollution Condition, Panel Says

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeal on Dec. 11 affirmed a district court’s ruling that no coverage is owed to an insured for business interruption losses sustained as a result of the COVID-19 pandemic because the insured failed to show that the coronavirus qualifies as a pollution condition as required by the policy at issue.
December 12, 2023
Insurer Says It Owes No Duty To Defunct Company For Underlying Asbestos Suits

HOUSTON — An insurer claims in a complaint filed in Texas federal court that it has no duty to provide coverage for a now-defunct company named in underlying asbestos personal injury suits because the company was never insured under any policies issued by the insurer.
December 12, 2023
Insurer Was Not Prejudiced By Insured’s Notice In Pollution Suit, Insured Says

ATLANTA — A district court’s ruling that no coverage is owed to an insured for contamination cleanup costs caused by the release of petroleum and other contaminants from an underground storage tank at a gas station should be reversed because the insurer failed to show that the insured’s untimely notice was prejudicial to the insurer, the insured says in its appellant brief filed in the 11th Circuit Court of Appeal.
December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
December 11, 2023
Water Damage Covered Under Policy But Fact Issues Exist On Faulty Work

ST. JOSEPH, Mo. — An ensuing loss provision provides coverage for water damage losses even if the water damage was caused by faulty workmanship; however, questions of fact exist regarding what work within the home was faulty and contributed to the water damage, a Missouri federal judge said in denying an insurer’s motion for summary judgment.
December 08, 2023
Kaiser Gypsum Asbestos Insurer Seeks Supreme Court Reversal Of Ruling On Standing

WASHINGTON, D.C. — The Fourth Circuit U.S. Court of Appeals’ finding that the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. does not have standing to challenge the debtors’ reorganization plan because the plan is insurance neutral is wrong and should be reversed, the insurer tells the U.S. Supreme Court in a Dec. 7 brief on the merits.
December 05, 2023
Insurer Seeks Reimbursement From Government For Losses Caused By Contaminated Water

HONOLULU — In a complaint filed in Hawaii federal court, an insurer claims that the U.S. government must reimburse it for more than $500,000 paid to its insured for business losses after a fuel spill at a jet fuel storage facility operated by the U.S, Navy contaminated local drinking water and forced the insured to close its fast food restaurants for approximately four months.
December 04, 2023
Wisconsin Panel Says Counterclaims Against Insured Arose Out Of An Occurrence

MADISON, Wis. — The Fourth District Wisconsin Court of Appeals reversed a trial court’s finding that counterclaims alleged against an insured do not state an occurrence because the factual bases for the counterclaims arose out of an occurrence for which coverage is afforded under the insured’s commercial general liability insurance policy.
December 04, 2023
Auto Policy’s Pollution Exclusion Bars Coverage For Contaminated Wheat Delivery

PIERRE, S.D. — No coverage is owed to insureds under an auto policy for an underlying suit arising out of the delivery of contaminated wheat because the auto policy’s pollution exclusion bars coverage for contaminants, the South Dakota Supreme Court said in affirming a trial court’s ruling in favor of the auto insurer.
December 04, 2023
Questions Of Fact Regarding Cause Of Water Damage Exist, Calif. Federal Judge Says

LOS ANGELES — An insured’s claims for breach of contract and bad faith can proceed against a homeowners insurer because questions of fact exist as to whether water damage in the insured’s home was caused by wear and tear, an excluded cause of loss, and whether the insurer’s investigation of the claim was reasonable, a California federal judge said in denying the insurer’s motion for summary judgment.
November 30, 2023
Panel Says Request For Examination Under Oath Was Not Made In Bad Faith

SAN FRANCISCO — The First District California Court of Appeal affirmed a trial court’s ruling in favor of an insurer on an insured’s breach of contract and bad faith claims in a water damage coverage suit after determining that the insurer’s request for an examination under oath (EUO) from the insured is not evidence of bad faith conduct.
November 29, 2023
Appeal Ends Jurisdiction Over Construction Defect Case, Federal Judge Says

PHILADELPHIA — A notice of appeal immediately stripped a district court of jurisdiction to hear a subsequent motion for reconsideration of a ruling finding that a man’s construction defect case involved the very types of foreseeable damages that an insurer has no duty to defend, a federal judge in Pennsylvania said Nov. 28.
November 28, 2023
No Coverage Owed For Clothing Retailer’s COVID-19 Losses, N.C. Panel Affirms

RALEIGH, N.C. — The North Carolina Court of Appeals affirmed a lower court’s dismissal of an insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the insured failed to allege a tangible alteration to its more than 1,300 clothing stores to trigger coverage.
November 28, 2023
Insurer Argues That It Owes No Coverage For Judgment Against Contractor

WILMINGTON, Del. — An insurer that filed a complaint for declaratory judgment in a federal court in Delaware against a contractor and homeowners association filed an answer to counterclaims by the association on Nov. 27, arguing that it owes no coverage for more than $8 million in damages awarded to the association in its underlying case against the contractor for excessive water infiltration and other issues.
November 28, 2023
No Coverage Owed For COVID-19 Losses Under Pollution Policy, Court Says

NEW YORK — No coverage is owed for business interruption losses caused by the coronavirus because the virus is not a pollution condition and does not constitute an indoor environmental condition as defined in the pollution and remediation policy, a New York appellate panel said in affirming a trial court’s ruling.
November 28, 2023
Additional Work Not Barred By Policy’s Mold Sublimit Provision, Judge Says

PHILADELPHIA — A claim for additional coverage for mold remediation work required by a local building code is not subject to a policy’s mold sublimit provision because the policy’s ordinance or law provision provides coverage for the additional work that was required by the enforcement of a local building code, a Pennsylvania federal judge said in partially granting the insureds’ motion for summary judgment.
November 22, 2023
N.Y. Federal Judge Certifies 3 Questions To 2nd Circuit In Asbestos Coverage Suit

BUFFALO, N.Y. — A New York federal judge granted motions to amend a prior opinion in an asbestos coverage suit and certified three questions to the Second Circuit U.S. Court of Appeals pertaining to the issues of whether a named insured whose subsidiary companies are named as defendants in underlying lawsuits is entitled to coverage under its policies and whether an all-sums or pro rata method of allocation applies to defense and indemnity costs incurred by the insured.
November 22, 2023
Injuries, Death Caused By Carbon Monoxide Exposure Constitute 1 Occurrence

BUTTE, Mont. — A Montana federal judge determined that an underlying suit seeking damages as a result of carbon monoxide exposure that injured a woman and caused the death of her husband alleges only one occurrence under a commercial general liability policy because there was only one cause of the woman’s injuries and the husband’s death.
November 21, 2023
Insurers Say Contribution To Lead Abatement Fund Is Not Damages Under Policies

COLUMBUS, Ohio — An Ohio appellate court erred in determining that an insured’s obligation to contribute to a lead paint abatement fund constitutes damages under insurance policies because the language of the policies establishes that there were no damages for which coverage is afforded, the insurers reiterate in an appellant reply brief filed in the Ohio Supreme Court.
November 20, 2023
Reinsurers Fail To Stop New Arbitration By Citing Previous Arbitrations

CHICAGO — Ruling that “a dispute over the preclusive effect of a prior arbitration is arbitrable,” an Illinois federal judge granted an insurer’s motion to compel arbitration and dismissed the case filed by reinsurers without prejudice.