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

Mealey's Insurance

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.
November 20, 2023
Dispute Over Billings For Asbestos Liabilities Must Be Arbitrated, Judge Says

WILMINGTON, Del. — A Delaware federal judge on Nov. 17 granted an insurer’s motion to stay an insured’s suit seeking coverage for more than $12 million in defense and indemnity costs for asbestos claims, agreeing with the insurer that the parties must submit the dispute to arbitration pursuant to the terms of a prior settlement agreement.
November 20, 2023
Judge Issues Opinion Reaffirming Order In Landlord’s Coronavirus Coverage Suit

NEW YORK — A federal judge in New York issued an opinion reaffirming its Sept. 29 order granting a commercial property insurer’s motion for summary judgment in a coronavirus coverage suit, finding that a commercial landlord insured failed to meet the contractual prerequisites to recover under the insurance policy’s two communicable disease provisions.
November 20, 2023
Insurer’s Environmental Coverage Suit Stayed Until Underlying Suit Is Resolved

SANTA ANA, Calif. — A California state judge denied a demurrer to an insurer’s complaint but granted a motion to stay the insurer’s declaratory judgment suit until after an underlying environmental contamination suit against the successor company to an insured is resolved because resolution of the underlying suit will aid the court in determining whether the insurer’s pollution exclusion applies as a bar to coverage for the underlying suit.
November 17, 2023
No Coverage Owed For Foundation Damage; Bad Faith, Breach Of Contract Claims Fail

LOS ANGELES — An insured’s claims for breach of contract, bad faith and unfair business practices alleged in a complaint seeking coverage for foundation damage arising out of a burst water pipe cannot proceed because the insurer properly denied coverage under the policy’s foundation damage exclusion, the Second District California Court of Appeal said in affirming a trial court’s decision.
November 16, 2023
Policy’s Virus Exclusion Bars Coverage For Coronavirus Losses, 9th Circuit Affirms

PHOENIX — The Ninth Circuit U.S. Court of Appeals on Nov. 15 held that an insured failed to plausibly allege that anything other than the COVID-19 pandemic is the efficient proximate cause of its losses, affirming a federal court’s dismissal of the insured’s commercial insurance coverage lawsuit.
November 14, 2023
No Coverage For Damages To Insured’s Dock Caused By Water, Structural Defects

SPOKANE, Wash. — A Washington federal judge on Nov. 13 granted summary judgment in favor of a homeowners insurer after determining that the insured’s claims for breach of contract and bad faith cannot proceed because the insurer’s denial of coverage for damage to a dock on the insured’s property was reasonable as the damage was caused by water and structural defects, excluded causes of losses, rather than wind.
November 14, 2023
New Trial Date Set In Groundwater Contamination Coverage Suit

RIVERSIDE, Calif. — A California federal judge set an April 2024 trial date in a groundwater contamination coverage suit following the parties’ request to move the trial date, originally scheduled to begin this month.
November 13, 2023
Insured Files Supplemental Authority On Applicability Of Pollution Exclusion

SAN FRANCISCO — A few days before oral arguments were held in the Ninth Circuit U.S. Court of Appeals in a dispute over the applicability of the pollution exclusion, the insured, seeking coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris, filed a notice of supplemental authority, urging the Ninth Circuit to consider a ruling by the Second District California Court of Appeal in support of its argument that the pollution exclusion does not bar coverage for the underlying suit.
November 13, 2023
West Virginia High Court Majority Says Continuous Trigger Of Coverage Applies

CHARLESTON, W.Va. — In answering a certified question from the Fourth Circuit U.S. Court of Appeals, the majority of the West Virginia Supreme Court of Appeals determined that a continuous trigger of coverage applies in a toxic chemical exposure suit and said that every occurrence-based insurance policy in effect from the initial exposure must provide coverage for the claim.
November 13, 2023
Insured Condo Association Says Coverage Owed For Hidden Water Damage

SEATTLE — A property insurer’s denial of coverage for hidden water damage discovered in the buildings of a condominium development constitutes a breach of contract and bad faith because coverage is afforded under the policies at issue, an insured condominium association says in a complaint filed in Washington federal court.
November 13, 2023
Reserve Information In COVID-19 Coverage Suit Not Relevant To Bad Faith Claim

SANTA ANA, Calif. — A California federal magistrate judge denied an insured’s motion to compel documents related to the reserve set by an insurer in response to the insured’s claim for business losses sustained in the wake of the COVID-19 pandemic after determining that the reserve information is not relevant to the insured’s bad faith claim because only a nominal reserve was set by the insurer and no changes were made to the reserve since the coverage claim was filed.