Duty to Defend

News & Analysis as of

Triple Threat to Coverage: Third Circuit Departs From Three Fundamental Rules in Applying “Prior Publication” Exclusion

Three well-established rules — (1) that policy exclusions are to be interpreted narrowly, (2) that an insurer has the burden to prove the applicability of an exclusion, and (3) that an insurer has a duty to defend as long as...more

No Escape from Duty to Defend By Escape Clause

Underwriters of Interest Subscribing to Policy Number A15274001 v. ProBuilders Specialty Insurance Company - Court of Appeal, Fourth Appellate District (October 23, 2015) - The California Fourth Appellate District...more

Drafting an indemnity agreement that works the way the indemnitee expects it to work

Countless indemnity agreements run along these lines: A hereby promises to defend, indemnify, and hold B harmless against all claims [etc.] caused by A’s negligence [etc.]...more

Maryland General Contractor Wins Coverage Under Subcontractor’s Additional Insured Endorsement; Coverage Not Limited to Vicarious...

An opinion favorable to additional insureds came down last week from the Maryland Court of Special Appeals. In John G. Davis Construction Corp. v. Erie Insurance Exchange, No. 802-2014 (Md. Ct. Spec. App. Oct. 28, 2015), the...more

Insurance Recovery Law - November 2015

Despite Prior Suits, Policyholder Entitled to Coverage for DOJ Investigation - Why it matters: A policyholder was entitled to coverage for a Department of Justice (DOJ) investigation despite already facing possibly...more

Third Circuit Announces Coverage-Defeating First Publication Rule

On October 23, 2015, the United States Court of Appeals for the Third Circuit issued a ruling that may make it more difficult for Pennsylvania policyholders to obtain coverage for the misappropriation of advertising ideas...more

Court Extends Insurer Rights to Equitable Contribution

In Underwriters of Interest v. ProBuilders Specialty Ins. Co. (No. D066615; filed 10/23/15), a California appeals court refused to enforce an “escape” other insurance clause in an insurer versus insurer contribution action,...more

New York Court Holds Dishonest Acts Exclusion Inapplicable

In its recent decision in Great American E&S Ins. Co. v. Norman-Spencer McKernan, Inc., 2015 U.S. Dist. LEXIS 140481 (W.D.N.Y. Oct. 15, 2015), the United States District Court for the Western District of New York had occasion...more

Beware of Good Intentions: Insurer Cannot Escape Duty to Defend by Interpleading Policy Limits That Were Not Subject to Competing...

On October 6, 2015, the United States District Court, Northern District of California held that an insurer breached its duty to defend by interpleading remaining policy limits and ceasing its defense of its insured. ...more

Illinois Court: Multi-year Policy Limits Applied To Entire Policy Period, Not Annually, And Payments For Potentially Covered...

An Illinois trial court recently addressed the issue of whether an insurer exhausted its limits of liability in paying nearly $90 million for an insured’s defense and indemnity associated with asbestos bodily injury claims. ...more

State Farm v. Hansen: Nevada Supreme Court Adopts California Independent Counsel Rules

The Nevada Supreme Court has adopted California’s independent counsel rules, holding that an insured is entitled to select its own counsel where an insurer’s coverage reservation creates an actual conflict of interest between...more

Insurers Beware: Respond Promptly or Lose the Right to Control the Defense

The tables may be turning. Insurers often seek to avoid their coverage obligations by invoking time limitations in their policies for providing claim notifications. On the other hand, these same insurers routinely take their...more

Third Circuit Decides that “Publication” Doesn’t Include the Collection of Customer Data

On September 15, 2015, the Third Circuit Court of Appeals declared that Lamorak Insurance Company (formerly OneBeacon America Insurance Company) and the Hanover Insurance Group don’t have to defend their insureds, Urban...more

Insurance Coverage – Bad Faith – Duty to Defend Multiple Policies

21st Century Insurance Co. v. The Superior Court of San Bernardino County - Court of Appeal, Fourth District (September 10, 2015) - Typically, where an insurer is defending an action, it is not bound by any...more

Insurance Recovery Law - October 2015

Unfair Trade Practices Exclusion Doesn't Cover Consumer Protection Suits - Why it matters: An unfair trade practices clause did not bar coverage for a policyholder's subsidiary, an Illinois federal court ruled, ordering...more

Insurance Company Not Required To Defend Its Insured Against Illegal Recording Of Telephone Communications Class Action Lawsuit

On September 29, 2015, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s order of dismissal and determined that First Mercury Insurance Company (“First Mercury”) did not have a duty to...more

Massachusetts Highest Court Issues Important Decision On Insurers’ Duty to Defend and Liability for Multiple Damages

In Boyle v. Zurich American Insurance Company, 472 Mass. 649 (2015), decided on September 14, 2015, the Massachusetts Supreme Judicial Court (the “SJC”) indicated, to the dismay of the insurance defense bar, that the right to...more

Mississippi Court Holds Defense Costs Outside of Limits

In its recent decision in Federal Ins. Co. v. Singing River Health System, 2015 U.S. Dist. LEXIS 134814 (S.D. Miss. October 2, 2015), the United States District Court for the Southern District of Mississippi issued a decision...more

Does Wisconsin’s Four-Corners Rule Govern an Insurer’s Duty to Defend?

Those who follow the work of the Wisconsin appellate courts might recognize this question as one that District II of the Court of Appeals certified to the Supreme Court nearly five years ago in Wilkinson v. Arbuckle, 2011 WI...more

Accidentally On Purpose: Washington Court Finds Coverage For Contempt Of Court Based On “Misunderstanding”

Professional liability policies cover claims based on the insured’s alleged negligent acts, errors or omissions, and not claims for “sanctions or penalties” for “willful” professional misconduct. But the insurer’s duty to...more

Appellate Court Notes

Supreme Court Advance Release Opinions: SC19359 - Persels & Associates, LLC v. Banking Commissioner - Noting that it has generally been the policy of the Courts to defer to the Legislature, especially as to the...more

Insurer Must Still Defend Even if Covered Claims Are Dismissed

We encounter the following scenario from time to time: The defense counsel just scored a big victory, knocking out a key cause of action. The only problem is—the carrier now says that claim was the only covered cause of...more

Georgia Court Holds Coverage Triggered for Product Disparagement Claim

In its recent decision in Foliar Nutrients v. Nationwide Agribusiness Ins. Co., 2015 U.S. Dist. LEXIS 125528 (M.D. Ga. Sept. 21, 2015), the United States District Court for the Middle District of Georgia had occasion to...more

Supreme Judicial Court Affirms Award 0f $2,250,000 plus Interest Against Insurer for Breach of Duty to Defend and Settle — on...

In Boyle v. Zurich American Insurance Company, SJC-11791 (Sept. 14, 2015), the Supreme Judicial Court (SJC) affirmed an award of $2,250,000 plus interest against an insurer for failing to defend its insured on a $50,000...more

Pennsylvania Supreme Court allows insured to settle without consent of insurer defending under reservation of rights

Bad faith claims can have major consequences for insurers. Stopping the Setup gets into the minds of plaintiffs' lawyers and addresses the ways they try to create bad-faith claims against insurance companies. This overview...more

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