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Mealey's Insurance

March 21, 2024
AFFF Maker Seeks Ruling That Pollution Exclusions Do Not Bar Liability Claims

CHARLESTON, S.C. — A company that makes the firefighting agent known as aqueous film-forming foam (AFFF) has moved in South Carolina federal court for partial summary judgment against a group of insurers asking the court to find that the product liability and common-law causes of action alleging bodily injury and/or property damage that have been asserted against the company in the multidistrict litigation are not excluded from coverage by pollution exclusions.
March 21, 2024
Insurer Failed To Show Faulty Work, Fungi Exclusions Bar Coverage For Assembly Work

AUGUSTA, Ga. — Summary judgment in favor of a commercial general liability insurer is not warranted because the insurer failed to show that its policy exclusions for faulty work and for fungi or bacteria apply to bar coverage for an underlying negligence suit stemming from the insureds’ assembly of a manufactured home that sustained water and mold damages following the delivery and assembly of the home, a Georgia federal judge ruled.
March 20, 2024
Standing To Object To Chapter 11 Plan Argued In Supreme Court

WASHINGTON, D.C. — The question of who has standing to object to a Chapter 11 plan of reorganization was debated March 19 in the U.S. Supreme Court, with some justices questioning why asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. are opposed to having their main liability insurer speak out against their bankruptcy plan.
March 19, 2024
Pollution Exclusion Clearly Bars Coverage For Wastewater Discharge, Panel Says

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 18 affirmed a district court’s ruling that a pollution exclusion in a directors and officers liability policy bars coverage for underlying lawsuits alleging that the insureds illegally discharged wastewater into city sewage treatment facilities because the exclusion is not ambiguous and clearly bars coverage for the wastewater.
March 19, 2024
3rd Circuit Affirms Ruling For Homeowners Insurer In Water Damage Coverage Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a district court’s ruling in favor of a homeowners insurer on breach of contract and bad faith claims in a water damage coverage dispute, agreeing with the insurer that the policy’s one-year suit limitation provision bars the breach of contract claim and that there is no evidence that the insurer’s denial of coverage was unreasonable.
March 19, 2024
Certification Of Pollution Exclusion Question Will Be Considered As Part Of Appeal

BISMARCK, N.D. — The Eighth Circuit U.S. Court of Appeals will consider certifying a question to the North Dakota Supreme Court on whether a pollution exclusion bars coverage for an underlying carbon monoxide exposure suit filed against insureds as part of its consideration of the insureds’ appeal on the merits of a district judge’s ruling in favor of the insurer on the pollution exclusion, according to an order issued by the court.
March 15, 2024
Washington High Court: Policy Exception Revives Coverage For Condo’s Roof Collapse

OLYMPIA, Wash. — The Washington Supreme Court on March 14 found that an appeals court correctly reversed a lower court’s grant of summary judgment in an all-risk insurer’s favor in a coverage dispute stemming from condensation damage to a condominium’s roof, finding that a resulting loss exception in the insurance policy revives coverage, even if it would otherwise be precluded by a faulty workmanship exclusion.
March 15, 2024
Arbitration Provision Does Not Apply To Parties’ Settlement Agreement, Texas Panel Says

DALLAS — A trial court did not err in denying an insurer’s motion to compel arbitration of a dispute over the terms of a 2015 settlement because the dispute over the satisfaction of a self-insured retention limit for benzene-related claims filed against the insured involves the interpretation of the settlement agreement and not the interpretation of the insurance policy at issue, the Fifth District Texas Court of Appeals said in affirming the trial court’s ruling that the arbitration provision applies only to disputes arising under the insurance policy and not under the settlement agreement.
March 14, 2024
Pollution Exclusions Bar Coverage For Judgment Against Insured, 9th Circuit Says

PASADENA, Calif. — A federal judge did not err in finding that the city of Los Angeles is not entitled to indemnity from two insurers for an underlying judgment obtained against a now-defunct insured because the judge properly found that the policies’ pollution exclusions bar coverage for the insured boatyard operator’s discharges of paint and other toxic materials into the city’s harbor, the Ninth Circuit U.S. Court of Appeals said March 13.
March 12, 2024
Infectious Disease Exclusion Bars Coverage For Underlying E. Coli Suit, Judge Says

ROME, Ga. — No coverage is owed to an insured for an underlying suit seeking damages for E. coli infections contracted at the insured’s fair because the commercial general liability insurer’s infectious disease exclusion clearly bars coverage, a Georgia federal judge said in granting the insurer’s motion for judgment on the pleadings.
March 12, 2024
Insured Asks 3rd Circuit To Reject Insurers’ Late-Notice Argument In Asbestos Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals should reject an attempt by insurers involved in an asbestos coverage suit to rewrite New Jersey’s late-notice law, an insured says in urging the Third Circuit to reverse a district court’s ruling entered in favor of the insurers.
March 11, 2024
S.C. Appeals Court Says Coverage Is Owed For Only Some Remediation Costs

COLUMBIA, S.C. — An insured is owed coverage only for cleaning structures at its wastewater facilities that were contaminated with polychlorinated biphenyls (PCBs) because the contamination of the affected structures constitutes direct physical loss or damage under the policy at issue, the South Carolina Court of Appeals said in partially affirming and partially reversing and remanding a master’s order.
March 08, 2024
Judge Rules For CGL Insurer In Coverage Dispute With Medical Product Manufacturer

CONCORD, N.H. — A federal judge in New Hampshire granted a commercial general liability insurer’s motion for summary judgment in its declaratory judgment lawsuit pertaining to 10 underlying class actions alleging that its insured manufactured and marketed medical devices used to clean positive airway pressure (CPAP) and bi-level positive airway pressure (biPAP) devices that were not safe or effective, finding that the damages alleged in the class actions fail to constitute “damages because of ‘bodily injury’ or ‘property damage’” to trigger coverage.
March 07, 2024
Contractor Seeks 6th Circuit’s Review Of Coverage Rulings In Wall Collapse Suit

CHATTANOOGA, Tenn. — Less than two weeks after a building owner filed a notice of appeal to the Sixth Circuit U.S. Court of Appeals, the contractor responsible for the building’s renovation work followed suit and filed its own notice of appeal, seeking review of a Tennessee federal judge’s ruling and judgment entered in favor of the insurer in the dispute between the building owner, contractor and insurer over coverage for the replacement of the building’s wall that fell during renovation work.
March 06, 2024
Washington Judge Partly Grants Insurer’s Motion For Clarification In COVID-19 Suit

SEATTLE —Partly granting an insurer’s motion for partial clarification or reconsideration of a Jan. 4 order denying the insurer’s motion to dismiss the University of Washington’s lawsuit seeking coverage for losses allegedly incurred by its medical and athletic properties in the wake of the coronavirus pandemic, a Washington judge held that the university has pleaded facts to trigger its medical centers’ policies’ communicable disease decontamination cost endorsements; its coverage claims under the athletic properties’ policies are not dismissed and its claims for coverage are not limited to the medical center policies’ time element losses due to contamination by communicable disease endorsements.
March 05, 2024
Panel: No Coverage Owed For Claims Arising From Warehouse Collapse Caused By Tornado

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on March 4 affirmed a lower federal court’s summary judgment ruling in favor of an insurer in its lawsuit seeking a declaratory judgment that it had no duty to defend or indemnify its insured against underlying wrongful death and personal injury claims arising from a warehouse collapse that was caused by a tornado, finding that there is no coverage because the insured did not own, rent or occupy the warehouse when it collapsed.
March 05, 2024
Reinsurer Seeks Reconsideration In Default Dispute In Settlement Reimbursement Case

OMAHA, Neb. — Arguing in part that “the prima facie standard only applies at the pre-trial stage,” a Brazil-based reinsurer has asked a Nebraska federal judge to reconsider denying its motion to set aside a default previously entered against it in the suit over reimbursement for a settlement reached with Montana regarding alleged asbestos exposure.
March 05, 2024
Insurer Owes Coverage For Suits Arising Out Of Contamination, Panel Affirms

CHICAGO — An environmental premises insurer has a duty to defend its insured against bodily injury lawsuits arising out of an explosion caused when liquid waste in an insured trailer came into contact with an open flame because the liquid waste qualifies as a contaminant under the policy at issue, the Seventh Circuit U.S. Court of Appeals said in affirming a district court’s ruling in favor of the insured.
March 05, 2024
All Sums Allocation Method Applies In Asbestos Coverage Row, Calif. Panel Affirms

LOS ANGELES — A California appellate panel affirmed a trial court’s ruling that an all sums method of allocation applies in an asbestos coverage dispute to an excess insurer’s policy based on the plain language of the insurer’s excess policy.
March 04, 2024
Sanctions Not Warranted Against Insurer In Contamination Suit, Special Master Says

DETROIT — An insurer’s failure to timely produce all documents during discovery in an environmental contamination coverage suit does not warrant an imposition of sanctions, but the insured is entitled to re-depose two of the insurer’s claims analysts regarding information in the documents that were not timely produced, a Michigan federal court special master said.
February 29, 2024
In High Court, Kaiser Insurer Says It Has Standing ‘Twice Over’ In Chapter 11 Case

WASHINGTON, D.C. — The primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. is obligated to pay most of the debtors’ debts and is a creditor, giving it standing to object to the debtors’ reorganization plan, the insurer tells the U.S. Supreme Court in a reply brief on the merits.
February 28, 2024
Reinsurers Turn To 2nd Circuit In Oil Seizure Row Involving Insurrection Clause

NEW YORK — Reinsurers who were ordered to pay CITGO Petroleum Corp. more than $72.5 million following a jury trial in a suit stemming from the February 2020 seizure of crude oil at a Venezuelan port and involving a marine cargo reinsurance policy have obtained a supersedeas bond and initiated an appeal.
February 27, 2024
Delaware High Court: Letter About Paraquat Exposure Does Not Constitute Claim

WILMINGTON, Del. — The Delaware Supreme Court on Feb. 26 affirmed a lower court’s finding that an insurer owes a duty to defend its insured against underlying bodily injury suits arising out of exposure to paraquat, a chemical compound manufactured by the insured for use in herbicides, because a letter from a law firm sent to the insured a year before the policies at issue incepted did not constitute a claim for damages.
February 23, 2024
1st Circuit Says Insurer Not Entitled To Reimbursement For Settlement, Defense Costs

BOSTON — A district court erred in finding that an insurer is entitled to reimbursement for defense and settlement costs paid on behalf of its insureds to settle an underlying bodily injury suit stemming from an employee’s contact with raw sewage because the insureds never agreed to reimburse the insurer for any settlement costs and the policy does not include a provision allowing for the reimbursement of costs paid on behalf of the insureds, the First Circuit U.S. Court of Appeals said Feb. 22 in reversing the district court’s rulings related to the insurer’s claim for reimbursement.
February 23, 2024
No Contribution Owed By 2 Other Insurers In Environmental Coverage Dispute

SALEM, Ore. — In two separate opinions issued Feb. 22, the Oregon Court of Appeals reversed two trial court rulings entered in favor of a primary insurer seeking contribution costs from other insurers for environmental cleanup costs incurred by insureds after determining that the insureds’ settlement with one insurer bars the primary insurer’s contribution claim and that the failure to prove that underlying policies were exhausted bars the primary insurer’s contribution claim against an excess insurer.