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

Mealey's Emerging Insurance Disputes

March 18, 2025
N.J. Panel Affirms Ruling In Insurer’s Favor In Suit Over Breach Of Fiduciary Duty

TRENTON, N.J. —A New Jersey appeals panel held that a comprehensive general liability and directors and officers insurer had no duty to prosecute its insured’s appeal of an underlying breach of fiduciary lawsuit or to cover underlying attorney fees, holding that the insurer’s duty to defend was extinguished because the insured’s actions fell outside the scope of coverage.
March 17, 2025
6th Circuit Asked To Rehear No Coverage Ruling In Professional Liability Dispute

CINCINNATI — An appellant filed a petition for panel rehearing and rehearing en banc asking the Sixth Circuit U.S. Court of Appeals to reconsider its finding that her declaratory judgment and bad faith claims fail because she did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured, arguing that the panel opinion misapplied insurance law, failed to hold the insurer accountable “for its shifting justifications” and created “an insurmountable burden for third parties attempting to report claims.”
March 17, 2025
Judge: Breach Of Contract Exclusion Does Not Bar D&O Coverage For Qui Tam Suit

WILMINGTON, Del. — A Delaware judge ruled in favor of insureds in their lawsuit seeking directors and officers liability coverage for an underlying qui tam action, rejecting the insurers’ argument that the breach of contract exclusion barred coverage.
March 17, 2025
Insurer’s Complaint Is ‘Misuse’ Of Declaratory Judgment Act, Panel Says In Reversal

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 14 reversed a lower federal court’s grant of an insurer’s motion for summary judgment in its declaratory judgment lawsuit arising from an underlying personal injury verdict, concluding that the insurer’s complaint was a “misuse of the Declaratory Judgment Act” because the lower court should have declined to exercise its discretionary jurisdiction.
March 14, 2025
No Coverage Owed For Malpractice Suit Against Law Firm, N.Y. Appeals Court Affirms

NEW YORK — A New York appeals court on March 13 affirmed a lower court’s summary judgment ruling in favor of an insurer in its declaratory judgment lawsuit disputing coverage for an underlying legal malpractice lawsuit arising from a real estate transaction, holding that the law firm insured’s claim predates the policy and that the insured did not satisfy the policy's prior knowledge condition.
March 14, 2025
New York Alleges Insurers Violated State Data Breach Notification Laws

NEW YORK — The people of New York sued insurers in a New York court alleging that they violated state data breach notification laws by failing to alert impacted New Yorkers or state agencies of a data breach in which drivers’ license numbers of close to 200,000 consumers were exposed to attackers.
March 13, 2025
Parties Settle Coverage Dispute Arising From Washington’s Suit Against Puppyland

TACOMA, Wash. — A Washington federal court indicated on its docket that it has been notified that a commercial insurer and its insureds have settled the insureds’ lawsuit seeking a declaration that it has no duty to defend or indemnify against the state of Washington’s underlying lawsuit alleging that the insureds engaged in unfair trade practices by participating in a business scheme that hides pricing information of purebred and designer mixed-breed puppies that they sell at their Puppyland stores.
March 12, 2025
No Professional Liability Coverage Owed For Malpractice Suit, Panel Affirms

SAINT PAUL, Minn. — A Minnesota appeals court concluded that an insurer has no duty to defend or indemnify its law firm insured against an underlying malpractice lawsuit, finding that no claim was “deemed made” during the professional liability insurance policy period.
March 10, 2025
COMMENTARY: Sustainability Recalibration: What Insurers And Policyholders Should Know About ESG (Environmental, Social, and Governance Considerations) Under Trump 2.0, Part 2

By Scott M. Seaman
March 10, 2025
Insurer Disputes Coverage For Suit Alleging Insureds Mispresented Cannabis Product

ROCKFOD, Ill. — A commercial general liability insurer asks an Illinois federal court to declare that it has no duty to defend or indemnify for an underlying putative class lawsuit alleging its insureds knowingly and/or recklessly misrepresented and advertised their product as cannabis concentrates and knowingly and/or recklessly misclassified their products in order to avoid regulations.
March 07, 2025
No E&O Coverage Owed For Negligence Claim, 9th Circuit Affirms

PASADENA, Calif.— The Ninth Circuit U.S. Court of Appeals on March 6 affirmed a lower federal court’s ruling that an email exchange a year before an errors and omissions insurance policy’s inception put the insured on notice of circumstances reasonably expected to lead to a claim and, therefore, the insurer has no duty to defend an underlying negligence claim.
March 06, 2025
Illinois Panel Affirms Ruling In Insureds’ Favor In Coverage Suit Over Arbitration

CHICAGO — An Illinois appeals court on March 5 affirmed a lower court’s summary judgment ruling in favor of insureds in their breach of contract lawsuit seeking coverage for a 2019 arbitration demand brought by investors, rejecting the insurer’s assertion that the 2019 arbitration shares a “common nexus” or is “casually connected” to a 2018 lawsuit.
March 06, 2025
Baylor College Of Medicine Seeks Texas High Court Review Of COVID-19 Coverage Suit

AUSTIN, Texas — Baylor College of Medicine filed a petition in the Texas Supreme Court seeking review of an appeals court’s conclusion that the presence of the COVID-19 virus at its premises did not cause “direct physical loss of or damage to” to its property, challenging the appeals court’s reversal of a lower court’s judgment following a jury verdict in the school’s favor.
March 05, 2025
Delaware Judge Grants Viacom’s Motion For Summary Judgment In D&O Coverage Suit

WILMINGTON, Del. — A Delaware judge granted Viacom Inc. motion for partial summary judgment in its lawsuit seeking directors and officers liability coverage for underlying claims that its directors, officers and controlling shareholders breached their fiduciary duties in connection with a 2019 merger with CBS Corp.
March 04, 2025
Parties Seek Dismissal Of Data Breach Coverage Suit Following Settlement

SEATTLE — A media tech insurer and its financial services firm insured filed a joint stipulation asking a Washington federal court to dismiss with prejudice the insurer’s lawsuit seeking a declaration that it has no duty to defend or indemnify the insured for a bank’s indemnification demand for a data breach incident and a related subrogation lawsuit brought by the bank’s insurer.
March 04, 2025
Furniture Delivery Company Asks 9th Circuit To Rehear UCL Coverage Dispute

PASADENA, Calif. — A furniture delivery company insured has asked the Ninth Circuit U.S. Court of Appeals to reconsider its ruling that an insurer has no duty to defend it against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, challenging the appeal court’s affirmation of a lower federal court’s grant of the insurer’s motion for summary judgment in its breach of contract and bad faith lawsuit.
March 04, 2025
6th Circuit Affirms Ruling In Favor Of Dentist’s Professional Liability Insurer

CINCINNATI — The Sixth Circuit U.S. Court of Appeals held that because an appellant did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured, the insurer had no contractual duty to the insured and, as a result, the appellant’s bad faith claim fails.
March 04, 2025
Panel: Coverage Barred For $3M Judgment Over Unpaid Wages, Commissions Claims

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals held that a breach of contract exclusion barred employment practices liability and directors and officers liability coverage for a more than $3 million underlying state court judgment in favor of former employees who sued the insured for breach of contract for unpaid wages and commissions, affirming a lower court’s ruling in favor of the insurer in its declaratory judgment lawsuit.
March 04, 2025
Silica Exposure Lawsuits Involve More Than 1 Occurrence, Insured Says In Complaint

NEW YORK — A commercial general liability insurer breached its contract and acted in bad faith by determining that more than 100 underlying silica exposure lawsuits filed against the insured are subject to coverage under only one insurance policy and involve only a single occurrence under the policy, an insured alleges in a complaint filed in New York federal court.
March 04, 2025
COMMENTARY: Sustainability Recalibration: What Insurers And Policyholders Should Know About ESG (Environmental, Social, and Governance Considerations) Under Trump 2.0, Part 1

By Scott M. Seaman
February 25, 2025
COMMENTARY: AI Risk: New Tech, Same Coverage

By Michael S. Levine, Alex D. Pappas and Torrye N. Zullo
March 03, 2025
Pollution Exclusion Does Not Bar Coverage For Carbon Monoxide Death

ANCHORAGE, Alaska — Answering a certified question from the Ninth Circuit U.S. Court of Appeals, the Alaska Supreme Court determined that a pollution exclusion does not bar coverage for the carbon monoxide death of a 17-year-old because it was reasonable for the insureds to expect that coverage would be afforded based on a reading of the pollution exclusion.
March 03, 2025
Judge Partly Grants Insured’s Motion For Summary Judgment In D&O Coverage Suit

WILMINGTON, Del. — A Delaware judge granted in part and denied in part an insured’s motion for summary judgment in a directors and officers liability coverage dispute over an underlying shareholder lawsuit, concluding that the underlying settlement’s stock payment is a covered “loss” under the policies but there are genuine issues of fact as to the consent-to-settle policy provision.
March 03, 2025
Judgment Granted For Insurer In Row Over Sinking Vessel Coverage, Policy Voidance

MIAMI — A Florida federal judge adopted a magistrate judge’s report and recommendation to grant summary judgment to an insurer in its declaratory judgment suit seeking to void a marine policy for material misrepresentations and to deny coverage for the partial sinking of a vessel, finding that the magistrate judge correctly determined that the policy was voided due to an inaccurate answer to a policy application question that was material to the decision to issue the policy.
March 03, 2025
Insurers Settle Coverage Dispute With Taco Bell Owners Over BIPA Violation Claims

SPRINGFIELD, Ill. — The same day commercial general liability and umbrella insurers and the owners and operators of Taco Bell restaurants in Illinois indicated that they have agreed in principle to settle the insurers’ lawsuit seeking a declaratory judgment that they have no duty to defend and indemnify in an underlying class action alleging that the insureds violated the state’s Biometric Information Privacy Act (BIPA), a federal magistrate judge in Illinois issued an order on Feb. 28 noting that all scheduled hearings are vacated and any pending motions are rendered moot.