The Complex Insurance Coverage Reporter

MOLD EXCLUSION

American Guar. & Liab. Ins. Co. v. Victory Highlands Condo. Ass’n, 2024 N.J. Super. Unpub. LEXIS 3128 (N.J. Super. Ct., App. Div., Dec. 26, 2024)

New Jersey appeals court concludes that claims by a condominium resident alleging injury from indoor exposure to mold did not fall within a “consumption” exception to mold exclusions^* in CGL policies where the resident demonstrated only that mold was present on his food and not that he was injured by eating mold on the food. It reasoned that, if the resident needed to prove only that there was mold on his food, and not that he ... 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

CLAIMS-MADE COVERAGE

Zurich Am. Ins. Co. v. Syngenta Crop Prot. LLC, 2024 Del. LEXIS 68 (Del. Feb. 26, 2024)

Delaware Supreme Court concludes that a letter from a lawyer informing an insured of possible lawsuits without identifying potential plaintiffs or demanding payment is not a “claim for damages” within the meaning of claims-made CGL and umbrella liability policies. Citing case law from Delaware and other jurisdictions, it reasoned that, in the ordinary sense, a “claim for damages” (which the policies did not define) is “a demand or request for monetary relief by ... Continue Reading

DEFENSE COST REIMBURSEMENT

Cont’l Cas. Co. v. Winder Labs., LLC, 73 F.4th 934 (11th Cir. 2023)

Eleventh Circuit predicts that, under Georgia law, insurers found to have no duty to defend underlying suits could not recoup defense costs from their insureds pursuant to a reservation of rights (ROR) where the GL policies at issue did not provide for reimbursement. The court concluded that the reimbursement provision in the insurers’ ROR letters was not supported by new consideration (since the policies already required the insurers to defend certain suits) and thus did not create a ... Continue Reading

On August 14, 2023, in a “landmark” ruling, a Montana state court held that youth plaintiffs had standing to assert constitutional claims against the State of Montana, its governor and state agencies for “ignoring” the impact of greenhouse gas (GHG) emissions on climate change. Held v. State of Montana, Cause No. CDV-020-307 (1st Judicial Dist. Ct., Lewis & Clark Cty., Mt.). Agreeing with the plaintiffs, the court concluded that a limitation in the Montana Environmental Policy Act (MEPA), which prohibited the state from considering climate impacts when issuing permits ... 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

CONTRIBUTION

Chem. Solvents, Inc. v. Greenwich Ins. Co., 2023 U.S. App. LEXIS 868 (6th Cir. Jan. 13, 2023)

A divided Sixth Circuit panel holds that, under Ohio’s “all sums” allocation scheme, “targeted” insurers may seek indemnity contribution from a policy reinsured by a captive insurer. The court rejected the insured’s argument that allowing contribution from a captive it partly owned would undermine the purpose of “all sums,” and explained that “[a]ll sums shifts the burden of calculating relative liability, but it doesn’t absolve the insured of all ... Continue Reading

On March 21, 2023, the New Hampshire Supreme Court, answering a certified question from the U.S. District Court for the District of New Hampshire, concluded that New Hampshire does not recognize a cause of action for recovery of medical monitoring costs by plaintiffs who allege they were exposed to a toxic substance. See Brown v. Saint-Gobain Performance Plastics Corp., No. 2022-013, 2023 N.H. LEXIS 23 (Mar. 21, 2023). The issue arose in a lawsuit by residents who alleged the defendants’ use of PFAS in their plastic manufacturing processes had contaminated the air, ground and ... Continue Reading

ANTI-ASSIGNMENT CLAUSE

Pepsi-Cola Metro. Bottling Co. v. Emp’rs Ins. Co., 2022 Wisc. App. LEXIS 598 (Wisc. Ct. App. July 8, 2022)

Wisconsin Court of Appeals (in a divided decision) holds that a “post-loss” assignment of rights under a liability insurance policy is valid despite lack of insurer consent. The majority believed an insurer’s consent to an assignment after “loss” occurs is not required on the basis that the assignment does not increase the insurer’s risk. It referred to Wisconsin’s “longstanding rule” that an anti-assignment clause in an ... Continue Reading

Wave of Deceptive Marketing PFAs Claims Raises “Personal and Advertising Injury” Coverage Issues
By: Gregory S. Capps and Lynndon K. Groff

Companies in various consumer products industries are increasingly facing claims alleging that they have deceptively marketed their products as safe and sustainable when, in reality, those products allegedly contain unsafe and unsustainable levels of chemicals known as per- and poly-fluoroalkyl substances, or “PFAS.” Since the beginning of 2022, plaintiffs have filed class-action lawsuits against several cosmetics ... Continue Reading

ARBITRATION

Rossello v. Zurich American Insurance Company, 2020 Md. LEXIS 174 (Md. Apr. 3, 2020)

Maryland’s highest court adopts pro rata allocation for asbestos-related bodily injury claims under liability policies. The court began by explaining that injury spanning many years often implicates multiple policies and therefore implicates a continuous or injury-in-fact trigger under Maryland law. Adopting the reasoning of Mayor & City Council of Baltimore v. Utica Mutual Insurance Company, 802 A.2d 1070 (Md. Ct. Spec. App. 2002), app. dismissed, 821 A.2d 369 (Md ... Continue Reading