The Complex Insurance Coverage Reporter

After almost two years' deliberation, the First Circuit last week issued its long-awaited decision in Admiral Ins. Co. v. Tocci Bldg. Corp.^[1]: affirming on other grounds, and leaving in place a district court decision that found subcontracted faulty work was not an "occurrence" and did not lead to covered “property damage” under Massachusetts law.

The decision leaves Massachusetts among a number of states where general contractors should not expect coverage from their commercial general liability (CGL) insurers for damage falling within the contractor’s scope of work.Continue Reading

ARBITRATION

S.K.A.V., L.L.C. v. Indep. Specialty Ins. Co., 103 F.4th 1121 (5th Cir. 2024)

Fifth Circuit predicts that, as amended, a Louisiana statute (Revised Statute § 22:868)* prohibiting certain insurance contracts from depriving courts there of “the jurisdiction or venue of action against the insurer” would void an arbitration provision in a surplus lines policy. According to the court, it was “settled” that arbitration agreements were unenforceable under statute until a 2020 amendment (Subsection (D)) authorized surplus lines insurers to include forum and ... Continue Reading

Weighing in on an issue that has divided courts nationwide, the U.S. Court of Appeals for the First Circuit has ruled that an insurer under Massachusetts law has no right to recoup defense costs, or amounts the insurer pays in settlement – even if the insurer reserves rights prior to payment and obtains a ruling, after the fact, that no defense or indemnity was owed. Berkley Natl. Ins. Co. v. Atlantic-Newport Realty LLC, No. 22-1959, 2024 U.S. App. LEXIS 4115 (1st Cir. Feb 22, 2024) (“Granite Telecomm"). However, the First Circuit rested its ruling on narrow procedural grounds ... Continue Reading

DUTY TO DEFEND – EXTRINSIC EVIDENCE

Republic Franklin Ins. Co. v. Ebensburg Ins. Agency, 2023 U.S. App. LEXIS 14528 (3d Cir. June 9, 2023)

Third Circuit questions, but declines to decide, whether Pennsylvania’s “four corners” rule permits an insurer under a claims-made professional liability insurance policy to terminate its defense of the insured based on extrinsic evidence unrelated to the merits of the underlying liability case. Quoting Erie Ins. Exch. v. Moore, 228 A.3d 258 (Pa. 2020), the court explained that, although Pennsylvania law provides that an ... Continue Reading

Welcome to CICR’s annual recap of insurance cases you should know about — and others in the pipeline to watch. You can read about our selections for “Cases to Know” and “Cases to Watch” below.

In the last year, we saw COVID-related business interruption disputes continue to dominate the insurance coverage landscape. According to the University of Pennsylvania’s COVID Coverage Litigation Tracker, trial courts have already issued 750+ merits rulings on motions in these cases. The results have overwhelmingly favored insurers. As one court put it, there is “[a]n ... Continue Reading

Insured gets sued. Insurer hires defense counsel to represent insured. Defense counsel takes over the case, and eventually, the case ends. Most of the time, the carrier and its insured will be satisfied with the result. There may be occasions, however, when the outcome is plainly undesirable.

Maybe there was an unusually large verdict that was unanticipated, or the case settled for what is seen as an inflated amount after a critical defense failed. In assessing the situation, the insurer may believe defense counsel mishandled the claim. This scenario raises a related thorny ... Continue Reading

The Connecticut Appellate Court recently issued a wide-ranging opinion, Continental Casualty Co. v. Rohr, Inc.,^[1] which significantly extended the current restrictive view on when a general liability policy can be considered exhausted so as to trigger overlying excess coverage. The case marks a further step away from Judge Augustus Hand’s almost-century-old ruling in Zeig v. Massachusetts Bonding & Ins. Co.,^[2] which held that an underlying policy could be “exhausted” by a below-limits settlement as long as the insured was willing to “fill the gap” between the ... Continue Reading

Commercial general liability (CGL) policies typically provide that an insurer will defend a “suit” that seeks covered “damages” that the insured may be “legally obligated to pay.” This seems simple enough.

But can an insurer have any obligation to its insured even before a “suit” is filed? Because of judicial interpretation of the policy language, the answer may be less straightforward than it would seem.

Conflicting Case Results

Consider two cases, decided less than a decade apart by federal courts in Massachusetts, which applied the same policy language to ... Continue Reading