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Pennsylvania District Court Considers Bad Faith Set-up as Affirmative Defense

As a matter of first impression under Pennsylvania law, the court in Shannon v. New York Central Mutual Insurance Company, No. 13-cv-1432 (M.D. Pa. Nov. 20, 2013) denied a motion to strike an insurer’s defense of “bad faith...more

Pennsylvania Superior Court Maps a New Path for Insureds and Insurers for Potentially Covered Claims

On July 10, 2013, a majority of a three-judge panel of the Superior Court of Pennsylvania cut a new path for insureds and insurers with respect to defense under reservations of rights. See The Babcock & Wilcox Company, et al....more

Sexual Misconduct “During” Law Enforcement Activities Does Not “Arise Out of” Law Enforcement Activities

In a recent case before the U.S. District Court for the Central District of Illinois, the court held that jail employees were not entitled to coverage for sexual molestation of an inmate under the law enforcement coverage...more

Second Circuit Restricts Zeig to First-Party Context, Requiring Actual Payment of Underlying Limits

The U.S. Court of Appeals for the 2nd Circuit recently eliminated the foundation for policyholders’ arguments in favor of “functional exhaustion.” In Ali v. Federal Insurance Co., No. 11-5000-cv (2d Cir. June 4, 2013), the...more

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