Insurance Coverage Litigation

Practice Points

What you need to know in a quick-to-read format. Find all of the Insurance Coverage Litigation Committee’s Practice Points in this archive.

2020


The Mediators Speak: What Has Surprised You Most About the Advent of Virtual Mediation?
Jeff Kichaven and Paul J. Van Osselaer – June 4, 2020
Two mediators discuss the pros and cons of mediating virtually.

The Mediators Speak: Should You Book a Half-Day or Full-Day Mediation?
Jeff Kichaven and Paul J. Van Osselaer – February 26, 2020
Two mediators discuss the pros and cons of  a half-day mediation.

2019

The Mediators Speak: Party Participation by Telephone or Video Conference—Does it Work?
Jeff Kichaven and Paul J. Van Osselaer – November 26, 2019
Two mediators offer recommendations and rules for getting remote-participation to work as part of a mediation.

The Mediators Speak: Can There Be Oversharing with a Mediator?
By Jeff Kichaven and Paul J. Van Osselaer – August 16, 2019
Two mediators discuss what information to share during mediation and when to share it.

Trademark Infringement: How Close is Close Enough?
Stacy R.C. Berliner – February 19, 2019
The issue before the Central District Court of California was whether allegations that the policyholder’s displays for knock-off products, and their proximity to the trademarked products and signs, satisfied the policy requirement that the infringement be “in that particular part of your advertisement.”

Discretionary Dismissal of Insurer’s Declaratory Judgment Action on Coverage Upheld
Peter J. Georgiton | January 8, 2019
The Sixth Circuit decision is a reminder that both insureds and insurers need to carefully consider the efficacy of bringing declaratory judgment actions on coverage in federal court.

How to Avoid the “Big Oops” at Trial: Waiver of A Batson/Edmonson Challenge
Chauntis Jenkins Floyd – January 8, 2019
Properly addressing any signs of discrimination in the selection of jurors by timely asserting the Batson/Edmonson challenge in court will ensure that you are protecting your client’s right to a fair and impartial civil trial.

2018

Don’t Forget Insurance in Time of Crisis
By Mary E. McCutcheon – December 28, 2018
Counsel’s attention to insurance assets will not eliminate a crisis, but may minimize its financial impact.

Always Carefully Review Policy Language in Long Tail Claims
By Seth M. Friedman – December 28, 2018 |
A recent court decision highlights the importance of carefully analyzing policy language in older policies implicated in long-tail claims and the continued application of contra proferentem.

Perils to Named Insured of Ambiguous Additional Insured Provision
Gregory Wright – December 28, 2018
A recently decided case addresses many issues that a policyholder should consider when deciding whether and how to add an additional insured to an insurance policy.

Directors and Officers Insurance Tips for Venture-Backed Companies
By Erica Villanueva – November 29, 2018
D&O insurance requirements are typically quite vague, and down the road, the parties may be surprised to learn of key gaps in coverage.

Advance Waivers Don’t Apply to Existing Conflicts
By William T. Barker – September 25, 2018
A law firm’s engagement agreement was invalidated because of a conflict not disclosed at the time the matter was opened.

Appraisal Clauses: the Policyholder’s Friend or Foe?
By Brent W. Huber and Christine D. Astbury – August 30, 2018
The appraisal clause in your property policy may be a useful tool in proving both damages and causation.

Court Limits Scope of Duty Owed by Broker to Insured
By Annmarie D’Amour – August 30, 2018
In many states, an insurance broker will not be responsible for advising the insured as to the coverage needed, unless there is a special relationship between insured and broker.

Court Recognizes Broad Rule of Admissibility for Opinion Testimony
By Christopher C. Meeks – August 30, 2018
The Georgia Court of Appeals recognized a broad rule of admissibility for opinion testimony that is a potential boon to policyholders and significant risk to insurers in first party cases.

Related Claims as a “Pattern or Practice of Behavior”
By Parker Lavin and Emily S. Hart – August 29, 2018
A series of lawsuits filed against an insured constitute “related-claims” because the lawsuits involve a “continuing pattern of anticompetitive behavior.

Appeals Court Defines Scope of Computer Fraud Coverage
By Matthew Schlesinger, Mark Herman, and Tara Brennan – July 25, 2018
The Sixth Circuit decision provides useful guidance on the contours of computer fraud coverage and the meaning of “direct loss.”

Dealing with Claimant Requests for Information on Other Sources of Recovery
By William Barker – July 23, 2018
If an insurer fails to notify its insured about requests for information and that failure causes a settlement opportunity to be lost, the insurer may be liable for any resulting excess judgment.

No Coverage Where Notice of Potential Claim is Untimely and Conceals Key Facts
By Charles C. Lemley and Margaret D. Thomas – July 23, 2018
This opinion offers three key lessons for insureds and insurers when addressing notices of potential claims under typical claims-made policies.

Do Insurance Policies Cover the Cost of Responding to Subpoenas?
By Diana Shafter Gliedman – July 23, 2018
This dispute arises frequently in today’s business world.

No “Additional Insured” Coverage for Project Managers
By Eric Hermanson and Tony Miscioscia – June 25, 2018
Despite general contractor’s agreement with project owner to provide such coverage, a New York court found coverage was not conferred.

Court Rules on Insurance Coverage and Bad Faith Litigants
By Jennifer Arnett-Roehrich – June 19, 2018
The Colorado Supreme Court took on cases involving the statute of limitations and attorney-client privilege.

The Potentially Puzzling Question of Reporting Claims Likely with an SIR
By John Vishneski – May 31, 2018
Should you not report a claim to the company's insurer to protect your loss history?

ERISA Claimants Should Clarify Their Rights to Future Disability Their Rights to Future Disability Benefits
By Benjamin C. Hassebrock – May 31, 2018
Claimants’ counsel should consider requesting clarification of future benefits, especially in cases involving permanent disability and a plan administrator's egregious conduct.

Court Rejects the “Unavailability Exception” to Pro Rata Allocation
By Catherine Cockerham and Alexandra Galdos – April 23, 2018
A unanimous New York Court of Appeals recently held that under pro rata allocation, insurers are not liable for the portion of continuous environmental damage that occurs outside their policy periods, even during years when liability coverage for such damage was commercially unavailable.

Fifth Circuit Reverses Course on Deference Afforded to Plan Administrators in ERISA Benefit Disputes
By Laura J. Grabouski – March 30, 2018
The Ariana M. decision reflects the growing trend of states attempting to curtail discretion by plan administrators

The Illinois Biometric Information Privacy Act: Is There Insurance Coverage for the Potential Exposure?
By Nancy F. Rigby – March 30, 2018
The act has lead to a rise in class action suits against employers.

Liability to Customer for Stolen Artwork Not Covered Loss Under All-Risk Property Policy
By Aaron H. Gould– March 30, 2018
The court in this matter rightfully circumscribed the policy to the risks contemplated by an all risk property policy.

When and How an Insured—and Its Insurer—Become “Legally Obligated to Pay”
By Christopher Kuleba – February 27, 2018
This decision holds particular value for corporate policyholders and their counsel deciding how best to structure a settlement agreement and any associated funding mechanism.

Rescission of Insurance Policies Covering Insureds in Bankruptcy
By Robert K. Scheinbaum – February 27, 2018
In the event that a policyholder or other party-in-interest files for bankruptcy protection, either prior to a contemplated rescission action by an insurer or during a pending rescission action, what happens to the rescission action?

Inability to Prove Damages Precludes Insurance Coverage for Homeowner Who Prevailed on Defects Claims
By Rebecca Woods – February 20, 2018
The U.S. Court of Appeals for the Second Circuit affirmed a District Court’s ruling that homeowners could not recover from a contractor’s insurer because the verdict had not proven which damages were covered under the insurer’s policy.

Policyholder Loses Environmental Coverage Dispute after Expert Opinion Fails the Daubert Test
By John H. Kazanjian, Edward M. Grauman, and Shengzhi Wang – February 20, 2018
This case serves as a reminder that insurance coverage litigators must not take for granted the admissibility of their experts’ opinions.

Florida Supreme Court: Florida Statute § 558.004 Process May Trigger a Duty to Defend
By Nancy G. Cook and Steven J. Rapp – January 31, 2018
Carriers and policyholders alike will need to carefully consider the scope and application of the defense language of liability insurance policies in the 558 context.

Online Policy Applications Present New and Challenging Issues
By Lindsay L. Rollins – January 22, 2018
Counsel for both insurers and policyholders should consider the particularities of any online application, including both the wording and format.

2017

The “Mediator’s Proposal”
By Jeff Kichaven and Paul Van Osselaer – December 28, 2017
Two national mediators discuss how close parties need to be to consider this approach to settling a case.

Insurance Claims for Business Email Compromise Losses: Best Practices
By Scott Godes – December 21, 2017
Policyholders should remember that there currently are decisions favoring policyholders on this type of coverage, and should consider responding to denials or limitations on coverage accordingly.

Cyber Liability Policies Conditioning Coverage on the Insured’s Negligence
By Ken Kronstadt – December 20, 2017
Policyholders should consider seeking out a policy form that does not tie coverage to the policyholder’s negligence.

Key Tips for Policyholders in Cyber Insurance Claims
By Sherilyn Pastor – November 30, 2017
Policyholders should carefully consider their risks and the scope of coverage afforded to them under a cyber policy.

Court Finds that Pollution Exclusion Applies to Smelter Lead Particulate Emissions
By Nicole Weinstein – November 27, 2017
The Missouri Supreme Court left room for future argument.

Are Opening Presentations at Mediation Valuable, and If So, Under What Circumstances?
By Jeff Kichaven and Paul Van Osselaer– November 15, 2017
Thoughts from two national mediators.

Frightening Consequences of Handling Life Insurance Claim by Spouse Indicted for Policyholder’s Murder
By Stephen J. Rapp – October 31, 2017
The Bailey case demonstrates the need for careful compliance with the legal mandate to withhold funds to a policy beneficiary who allegedly kills the insured, while simultaneously engaging in careful and effective claims handling.

Insurer Duties and Continuous Triggers
By Jan Larson– September 15, 2017
Two new court decisions contain considerations for policyholders to note.

Massachusetts Holds That Insurers Need Not Fund Insured’s Counterclaims
By Brandon Arber – August 25, 2017
The state's highest court decided an insurer’s duty to defend does not include the obligation to fund counterclaims on behalf of its insured.

Broad Interpretation of Professional Services Exclusion Bars Coverage for Pipeline Explosion Liability
By Celia B. Waters and Richard Brown – August 21, 2017
Policyholders should be aware of professional services exclusions in their liability policies that may be broadly interpreted to exclude liability arising out of operations that may include professional elements or duties.

How Companies Can Make Sure Their Cyber Policies Provide Coverage for Data Breaches
By Lori L. Siwik – August 14, 2017
Besides knowing the federal, state, and local laws and regulations, companies should thoroughly access their own cybersecurity risks through a risk assessment.

Avoiding Coverage Gaps in Your Excess Policies
By Nicholas M. Insua – July 24, 2017
A few recent trends suggest more attention should be given to retentions and deductibles to ensure a seamless transition from primary to excess layers up through a coverage tower.

Artificial Intelligence May Force Legal Community to Reconsider Rules of Evidence
By John F. Barwell – July 21, 2017
In a few years, voice forgeries may be so good they can fool experts.

Proximate Causation Required for Additional Insured Coverage
By David E. Schoenfeld and Thomas J. Dammrich II – July 20, 2017
The Court of Appeals of New York recently overturned appellate division and federal district court precedent on the interpretation of additional insured language in the 2004 ISO Form 20 10 Endorsement and its equivalents.

Refinery Power Outage Illuminates Importance of Service Interruption Coverage
By Richard W. Brown and Celia Waters – July 7, 2017
The facts alleged in Valero illustrate why it is important for companies with operations that depend on utility services to incorporate service interruption coverage into their risk management programs.

Texas Court Denies Exxon a La Carte Coverage
By Richard W. Brown, Celia B. Waters, and Malcolm S. Ranger-Murdock – June 2, 2017
The Court of Appeals of Texas held that a party seeking additional insured coverage under an umbrella general liability policy cannot reap the benefits of being an additional insured, and simultaneously avoid the limitations of an arbitration clause contained in the policy.

Beware the Fifth Circuit: Deference Without Discretion in ERISA Claims
By Benjamin C. Hassebrock – May 1, 2017
Texas enacted a statute that prohibits insurers from including a discretionary clause in certain Employee Retirement Income Security Act plans.

Texas Supreme Court Clarifies Scope of Statutory Protections for Policyholders
By Richard Brown – April 26, 2017
The Texas Supreme Court reinforced the rights of insurance policyholders by clarifying and enhancing statutory provisions that penalize insurers engaging in deceptive trade practices.

Supreme Court of Florida Weighs in on Concurrent Causation Versus Efficient Proximate Cause
By Gregory D. Podolak – February 22, 2017
The Supreme Court of Florida concluded 2016 with an important first-party property decision, holding that where multiple independent perils combine to cause a loss, there is coverage so long as one of the perils is insured.

2016

Hail No: Insurer Prejudiced by Insured’s Delay in Reporting Storm Damage Claim
By Pierce T. Cox – May 5, 2016
The Fifth Circuit Court of Appeals, applying Texas law, recently affirmed summary judgment for an insurer in a case where the insured provided no explanation for its 19-month delay in reporting a hail damage claim, and the insurer disclaimed coverage for an inability to determine what damage occurred during its policy period .

ERISA Insurers Must Disclose the Policy’s Contractual Limitations Period
By Benjamin C. Hassebrock – April 4, 2016
Last month, the First Circuit Court of Appeals helped balance the playing field for plan participants, holding that an ERISA insurer must advise a claimant of the policy’s limitations period before it will be enforced.

Excess Insurer Not Required to Drop Down Following Insolvency of Primary Insurer
By Michael McCormack – January 19, 2016
The Montello case is an example of how courts will not rewrite excess liability insurance policies to provide coverage that the parties to the contract did not intend would be provided and for which a premium was not paid.

The Demise of Mediation?
By Bruce Edwards – January 9, 2016
An open letter arguing against the California Law Revision Commission’s attempt to make broad changes to the confidentiality protection currently afforded statements made in mediation.

2015

Almost No Coverage for Replacing Defective Component That Has Not Failed
By William T. Barker – December 7, 2015
The Texas Supreme Court rejected the argument that incorporation of defective flanges into diesel units should be considered property damage.

An Open Letter About California’s Absolute Mediation Confidentiality Statute
By Jeff Kichaven – November 30, 2015
The California Legislature has asked that state’s Law Revision Commission to consider whether California’s Absolute Mediation Confidentiality statute should be amended to make mediation evidence admissible in cases of legal malpractice.

DOJ Policy Shift Will Have Significant Effect on D&O Claims
By Joshua D. Davey – October 28, 2015
A recent shift by the Department of Justice in its policy toward holding individual corporate executives accountable for corporate misconduct will almost certainly have significant implications for coverage under directors and officers liability policies.

Nevada Supreme Court Adopts Cumis Rule
By Howard J. Russell – October 20, 2015
The court held that Nevada law requires the insurer to pay for independent counsel of the insured’s choosing when a conflict of interest arises in the defense of a case.

CT First Supreme Court to Address CGL Cyber Coverage Debate
By Gregory D. Podolak – June 18, 2015
The case received attention for its interpretation of “publication” in the personal and advertising injury coverage of a standard CGL insurance policy

Innocent Insured Doctrine Inapplicable Where Application Falsified
By Paul T. Curley – March 4, 2015
The Illinois Supreme Court held that the common law innocent insured doctrine did not preserve coverage for an innocent insured where the insurer rescinded a lawyer’s professional liability (LPL) policy based on misrepresentations by another insured in the renewal application.

Penn State Teaches a Lesson in Asserting Bad Faith Claims
By Erica J. Dominitz and Virginia R. Duke – March 11, 2015
The court held that the policyholder’s allegations of specific, albeit disputed, facts regarding insurer misconduct allowed its bad faith claim to survive the carrier’s summary judgment motion

Notice-Prejudice Rule Inapplicable If Date-Certain Notice Required
By Paul T. Curley – March 4, 2015
The Supreme Court of Colorado held that the rule does not apply to a date-certain notice requirement in a claims-made insurance policy.

Deepwater Horizon: Scope of Additional Insured Coverage Depends on Contract with Named Insured
By Sherilyn Pastor – March 4, 2015
The Texas Supreme Court recently ruled on the scope of additional insured coverage under an insurance policy may be driven by the additional insured’s separate contract with a named insured.

Pennsylvania Holds that Policyholders Can Assign Insurance Bad Faith Claims to Third Parties
By Andrew J. Kennedy – February 25, 2015
The Pennsylvania Supreme Court has decided that policyholders can assign their statutory bad faith claims to third parties.

Policyholders Should be Aware of the Effect of "Presumptive Intent"
By Charlie D. Price and Kyle A. Shelton – February 18, 2015
Injured employees increasingly rely upon R.C. 2745.01(C), sometimes called the “equipment safety guard” provision, which provides that an employer’s deliberate removal of an equipment safety guard creates a rebuttable presumption that the employer intended to cause injury

Almost No Coverage for Replacing Defective Component That Has Not Failed
By William T. Barker – December 7, 2015
The Texas Supreme Court rejected the argument that incorporation of defective flanges into diesel units should be considered property damage.

Manifestation Trigger for Property Damage to Dairy Cows
By John Buchanan and Suzan Charlton – February 18, 2015
Whether this 3-2 decision will be extended to overturn longstanding precedent in coverage cases involving asbestos and other similar long-tail liabilities, or whether it will be confined to its own idiosyncratic facts, remains to be seen.