Duty to Defend

News & Analysis as of

Insurance Recovery Law - July 2014

Second Circuit: Insurer Must Defend Where Factual Allegations Create a Possibility of Coverage - Why it matters: In a recent pro-policyholder decision, the Second Circuit, applying New York law, reminded...more

When Is a Construction Defect a Mere Business Risk and Not Insurable?

In an unpublished appellate decision from the state of Washington, on May 5, 2014, the Washington Court of Appeals affirmed a summary judgment in favor of a CGL insurer, Western National Assurance, relieving it of any...more

Summary of California Appellate Decisions - June 2014

Insurance Coverage; Professional Services Exclusion; Completed Operations; Duty To Defend: North Counties Engineering, Inc. v. State Farm General Insurance Company (2014) 224 Cal.App.4th 902, 169 Cal.Rptr.3d 726...more

Policyholder Observer

Encryption Flaw "Heartbleed" Creates Data Risk: How Insurance Can Stanch the Bleeding - In early April, news broke of an encryption flaw named “Heartbleed” that exposed companies to data breaches for over two and one...more

Illinois Court Holds Duty to Defend Telemarketing Sales Rule Lawsuit

In its recent decision in North River Ins. Co. v. Guar. Trust Life Ins. Co., 2014 Ill. App. Unpub. LEXIS 736 (Apr. 14, 2014), the Appellate Court of Illinois, First District, had occasion to consider whether an exclusion for...more

California Court of Appeals: Insurer Liable for Settlement Negotiated by Insured

California Court of Appeals affirms a jury verdict finding an insurer liable for settlement costs of its insured when the insurer refused to defend its insured in bad faith. San Diego Apartment Brokers (“Brokers”)...more

Washington Court of Appeals Holds No Duty to Defend: An Invitation to Initiate Cleanup Is Not A Suit

On June 2, 2014, the Washington State Court of Appeals issued a published opinion regarding what constitutes a “suit” in the context of environmental liability claims under the Model Toxics Control Act (MTCA). The court held...more

New York Court Rejects Insurer’s Motion to Dismiss Its Own Lawsuit

In its recent decision in Cincinnati Ins. Co. v. Roy’s Plumbing, Inc., 2014 U.S. Dist. LEXIS 73464 (W.D.N.Y. May 29, 2014), the United States District Court for the Western District of New York considered the implications of...more

Washington Court Rules Insurer’s Duty to Defend Environmental Liability is Triggered by Agency’s Explicit or Implicit Threat of...

A party faced with strict liability under the Washington Model Toxics Control Act (MTCA) for the costs of cleaning up environmental contamination often has insurance that might apply, but a lingering question has been at what...more

The Duty to Defend: Understanding the Obligation and Identifying Some Tools Under Mississippi Law

Liability insurance coverage should always be an initial consideration when any business faces a claim or lawsuit. Do we have coverage for that? Ideally, the answer is an unqualified “yes.” In reality, the answer from an...more

New York Supreme Court Finds that GL Insurers Have No Duty to Defend Sony for Class Actions Arising out of PlayStation Data Breach

In February of this year, in the matter of Zurich American Ins. Co. v. Sony Corp. of America, et al., case number 651982/2011, the New York Supreme Court ruled in favor of Zurich American Insurance Co. and Mitsui Sumitomo...more

Bad Caregivers Benefit From A Careless Defense

Where an insured defendant is sued under multiple theories and coverage is available for only some of them, an Ohio appellate court has ruled that the insurer’s duty to defend includes an obligation to recommend that the...more

The New York Court of Appeals Considers the Consequences of a Liability Insurer’s Breach of the Duty to Defend

What are the consequences of a liability insurer’s breach of the duty to defend its insured against a potentially covered claim? Recent decisions from the New York Court of Appeals highlight differing views nationwide on...more

California Court Holds Offensive Odors Are Not Property Damage

In its recent decision in Travelers Property Casualty Company of America v. Mixt Greens, Inc., 2014 U.S. Dist. LEXIS 39548 (N.D. Cal. March 25, 2014), the United States District Court for the Northern District of California...more

Policy Observer - March 2014

D&O Coverage for Subpoena Response Costs: An Emerging Consensus? Responding to a subpoena can be an expensive proposition. Fortunately, in many instances, a company can call upon its D&O insurer to help defray the...more

Insurance Recovery Law

Insurer Should Have Considered Extrinsic Facts When Determining Whether A Potential for Coverage Existed, Ninth Circuit Concludes - Why it matters: In a fascinating – albeit unpublished – decision from the Ninth...more

Debate Over the ALI’s “Principles of the Law of Liability Insurance” Continues – Advisers Slated to Discuss Contentious Portions

At its 2013 annual meeting, the American Law Institute (ALI) voted to adopt sections 1 through 15 of its “Principles of the Law of Liability Insurance.” However, extensive criticism during the floor debate prevented the ALI...more

Ongoing Or Completed Operations? Fifth Circuit Finds No Duty To Defend Contractor Under Additional Insured Endorsement

In Woodward, L.L.C. v. Acceptance Indemnity Insurance Company, WL 535726 (5th Cir. 2014), the Fifth Circuit Court of Appeals held the insurer had no duty to defend the contractor named as an additional insured under a...more

Ninth Circuit Holds Extrinsic Facts Triggered Duty to Defend

In its recent decision in Burlington Ins. Co. v. CHWC, Inc., 2014 U.S. App. LEXIS 3941 (9th Cir. Mar. 3, 2014), the United States Court of Appeals for the Ninth Circuit, applying California law, had occasion to consider an...more

New York Court of Appeals Sustains Delay in Disclaimer Based on Insured’s Lack of Cooperation

Will a New York court excuse an insurer’s delay in disclaiming coverage based on an insured’s failure to cooperate, when the facts confirm that it did so as soon as reasonably possible after it determined that the insured...more

In K2 Investment, NY high court reverses itself, confirms well-established case law

The New York Court of Appeals, in K2 Investment Group, LLC v. American Guarantee & Liability Insurance Company, 2014 WL 590662 (N.Y.), 2014 N.Y. Slip Op. 01102 (N.Y. Feb. 18, 2014), has vacated its own prior decision,...more

New York High Court Reverses Course; Allows Carriers to Rely on Policy Exclusions Where Duty to Defend was Breached

K2 Investment Group, LLC. v. American Guarantee & Liability Ins. Co., No. 6, 2014 N.Y. LEXIS 201 (N.Y. Ct. of App. Feb. 18, 2014). In 2013, the New York Court of Appeals affirmed an order granting summary judgment to a...more

New York Appeals Court Reverses Itself in K2 Investment Group Decision; Reaffirms Earlier Ruling in Servidone

In a decision notable for several reasons, the New York State Court of Appeals—the state's highest court—reversed itself in K2 Investment Group, LLC v. American Guarantee & Liability Insurance Co. [21 NY3d 384 (2014)] and...more

K2-II Update: Insurers’ Breach of Duty Does Not Result in Automatic Liability in New York

In a 4-2 split, the New York Court of Appeals unwound a 2013 ruling that raised significant concern for insurers in denying requests for defense in liability matters. As a result, it is once again the rule in New York that an...more

Insurance Recovery Law - Feb 18, 2014

Insurer Must Indemnify TCPA Settlement, Despite Lack of Involvement - Why it matters: In a closely watched case out of Illinois, an appellate court held that a $1.7 million settlement in a Telephone Consumer...more

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