Reservation of Rights

News & Analysis as of

11th Circuit Finds a Covered “Occurrence” Under CGL Policy For Damages Resulting From Contractor’s Faulty Work and Rejects...

In Pennsylvania National Mutual Insurance Company v. St. Catherine of Siena Parish, 790 F.3d 1173 (11th Cir. 2015), a judgment was obtained by the Parish (a Catholic Church) against Kiker Corporation (“Kiker”), which was...more

Seventh Circuit Issues Stern Warning For Insurers That Reject Their Duty to Defend

The first line of the Seventh Circuit’s opinion says it all: “This case provides a warning for insurance companies who refuse to defend their insureds.” As the court’s admonishment suggests, insurers that improperly refuse to...more

Independent “Cumis” Counsel Now Face Direct Claims for Reimbursement From Insurers

On April 30, 2015, we blogged about Hartford Casualty Insurance Company v. J.R. Marketing, LLC, Case No. S211645, then set for oral argument in the California Supreme Court. [see the prior post: California’s “Independent”...more

California Supreme Court: Insurer Can Directly Sue Independent Counsel for Excess Fees in Limited Circumstances

On August 10, 2015, the California Supreme Court issued a unanimous decision that could have broad implications regarding an insurer’s right to seek reimbursement of unreasonable fees and costs directly from so-called Cumis...more

Insurance Recovery Law - August 2015

Insured's Notice to Broker Satisfied Policy Requirements, Illinois Court Rules - Why it matters: An insured's notice to its broker satisfied the policy's notice requirements, an Illinois appellate panel recently...more

Seventh Circuit warns insurance companies who refuse to defend their insureds

The Seventh Circuit Court of Appeals recently issued “a warning for insurance companies who refuse to defend their insureds.” In National American Insurance Company v. Artisan and Truckers Casualty Company, No. 14-2694, 2015...more

Without So Much as a Fig Leaf . . .

Legal commentators and court watchers rightly complain about activist judges who make laws rather than interpret them. Last month’s decision in the The Babcock & Wilcox Co. et al. v. American Nuclear Insurers, et al., is...more

Pennsylvania Permits Insureds Being Defended under a Reservation of Rights to Settle Without Their Insurer's Consent

A standard provision in the commercial general liability policy and many other liability policies precludes voluntary payments—settlements—by the insured without the insurer’s consent. The Supreme Court of Pennsylvania’s...more

Pennsylvania Supreme Court Holds That Insured May Settle Tort Claim Without Insurer Consent Under “Fair and Reasonable” Standard

In Babcock & Wilcox Co. v. American Nuclear Insurers, a divided Supreme Court of Pennsylvania, deciding an issue of first impression under Pennsylvania law, recently held that when an insurer defends its insured subject to a...more

Pennsylvania Supreme Court Holds Insured Entitled to Settle Underlying Claim Even Absent Insurer Consent

In its recent decision in Babcock & Wilcox Co. v. American Nuclear Insurers, 2015 Pa. LEXIS 1551 (Pa. July 21, 2015), the Supreme Court of Pennsylvania, deciding a matter of first impression within the Commonwealth, had...more

Duty to Cooperate Ruling Narrows Insurers’ Ability to Foreclose Coverage for Settled Class Action Claims

Insurance policies typically include a cooperation clause, which requires the insured to cooperate with the insurer in the defense of a covered claim. Insurers routinely use this clause as a sword against their insureds by...more

The Pennsylvania Supreme Court Issues Its Landmark Ruling in Babcock

On July 21, 2015, the Pennsylvania Supreme Court issued its much-anticipated decision in Babcock & Wilcox Company, et al. v. American Nuclear Insurers, et al., No. 2 WAP 2014 (Pa. July 21, 2015). The court resolved an issue...more

PA Supreme Court Gives Policy Holders Right to Settle Without Insurer Approval

Insurance coverage counsel have been anxiously awaiting the Pennsylvania Supreme Court's decision in Babcock & Wilcox Co. v. Am. Nuclear Insurers, 2015 Pa. Lexis 1551 (July 21, 2015), since the high court agreed to hear the...more

The Pennsylvania Supreme Court Issues Its Landmark Decision in Babcock

On July 21, 2015, the Pennsylvania Supreme Court issued its much-anticipated decision in Babcock & Wilcox Company et. al. v. American Nuclear Insurers et. al, No. 2 WAP 2014. Reed Smith filed an amicus brief in the case...more

Can an Insurer Intervene in a Class Action to Protect Against a Collusive Settlement?

Liability insurers are sometimes faced with a difficult scenario: Their insured has been sued in a class action with potentially large stakes. The insurer believes they have no duty to defend and a denial of coverage is...more

What does "will be insured" actually mean?

Balancing obligations to provide health and life insurance benefits to retirees with other legitimate business needs can be tricky. Although retirees depend on the benefits, employers may need to modify benefit plans for...more

A Primer on Insurance Underwriting in China

China is one of the largest and fastest-growing insurance markets in the world. It provides the global insurance and reinsurance industry with tremendous opportunities but also presents challenges with its unique legal and...more

Insurer Seeks Declaratory Judgment Against Policyholder for Data Breach

Late last month, Columbia Casualty Company instituted a declaratory judgment lawsuit in the United States District Court for the Central District of California against its insured, Cottage Health System. Columbia Casualty...more

Submitting Your Defense Bills to Insurers Could Mean Waiving Privilege

Recently, the California Court of Appeal decided County of Los Angeles Board of Supervisors v. Superior Court, 235 Cal. App. 4th 1154 (2015), a case considering whether the Los Angeles County Sheriff's Department could be...more

Conclusory Allegations Held Insufficient to Support Declaratory Relief on Right to Independent Counsel or Allocation of Defense...

In Centex Homes v. St. Paul Fire & Marine Ins. Co. (No. E060057, filed 5/22/15), a California Court of Appeal held that a developer’s declaratory relief lawsuit seeking a declaration of the right to independent counsel was...more

Insurer Declaratory Action: To Stay or Not to Stay?

This month’s edition of For the Defense magazine focuses on insurance law. That makes sense. It is difficult to do much defending without bumping against insurance issues. Our torts professor constantly emphasized the...more

Is That Covered? Reservation of Rights

If a policyholder is sued, she can tender the defense of that suit to her insurance company. If the insurance company believes that there may not be coverage, but cannot make a clear determination based upon the complaint...more

Insurers’ Right To Recover Fees Directly From Independent Counsel To Be Decided

Under California Civil Code 2860, an insured who is entitled to a defense from a liability insurer may also be entitled to select counsel of its choice, even though the insurance policy states that the insurer has the right...more

Reservation of Rights and the Insurer [Video]

From the recent PLUS webinar “Reservation of Rights and the Insurer,” Atea Martin (CNA Insurance Company) and Moiré Moron (QBE North America) discuss some of the issues once independent counsel is utilized....more

Sorry, But Your Reservation Has Been Cancelled: How an Insurance Company’s Failure To Give Proper Notice of Its Reservation of...

Most courts hold that an insurance company will not be estopped from denying coverage, even if the insurance company participates in the defense, provided it gives timely notice to the policyholder through a reservation of...more

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