Likelihood of success a prerequisite to insurer's duty to appeal, Mass. court rules

The Massachusetts Superior Court for Suffolk County - Business Litigation Session, issued a decision holding that an insured, before obligating an insurer to pursue an appeal, must at least identify a discrete appellate issue as to which there is a reasonable possibility of success.

Eleventh Circuit affirms ruling of no coverage based on insured’s failure to cooperate

As a condition to coverage under standard liability policies, the insured is required to cooperate with its insurer. The provision, termed the “cooperation clause,” typically requires the insured to assist with and participate in the investigation, defense and settlement of a claim or suit. However, even if an insured does not honor the cooperation clause, it does not necessarily lose coverage.

New Jersey high court follows nationwide majority on CGL coverage for general contractor

Intro: New Jersey's high court affirmed an intermediate court's ruling that where a subcontractor's defective work causes physical damage to other, nondefective parts of a general contractor’s project, the harm constitutes "property damage" caused by an "occurrence" under the general contractor's standard CGL policy. It was not the ruling the insurance sector had hoped for, but at least it provided clarity going forward.

California's First District holding closes loophole for evading removal jurisdiction in insurance coverage declaratory relief actions

California law has long held that the parent and controlling shareholder of an insured corporation has no standing to sue for breach of contract or bad faith under an insurance policy issued to the corporation. In a published decision that recently became final on June 27, 2016, Division Two of the California Court of Appeal for the First District held that the parent and controlling shareholder of an insured corporation also lacks standing to seek purely declaratory relief as to the insured corporation’s coverage. See D. Cummins Corp. v. Untied States Fid. and Guar. Co., 246 Cal. App. 4th 1484 (Cal. App. 1st Dist. 2016).

Industry and trade groups challenge the Department of Labor’s Fiduciary Rule

Earlier this month, eight industry and trade groups launched a broad challenge to the US Department of Labor’s (DOL) Fiduciary Rule (Rule) and related prohibited transaction exemptions that were released on April 6, 2016.  The challenge was brought in in Texas federal court.  Plaintiffs seek an injunction halting the regulations, which impose a fiduciary duty on financial professionals who advise retirement account savers, asserting that the new regulations will harm retirement savers, small US businesses, financial professionals, and financial services firms and insurance institutions.  The suit challenges the new rules on First Amendment, statutory jurisdiction, and procedural grounds.

Arizona court applies traditional exclusion in modern “cyber” coverage form

In one of the first published rulings on coverage under a stand-alone “cyber” insurance policy, a federal court in Arizona recently applied old-school coverage analysis to a new-school cybersecurity policy in P.F. Chang’s China Bistro v. Federal Insurance Co., No. CV-15-01322-PHX-SMM (D. Ari. May 31, 2016).

SC Appeals Court holds insurance does not cover damages arising from sewage odors

In South Carolina Ins. Reserve Fund v. East Richland County Public Service District, the South Carolina Court of Appeals held that offensive odors emitting from a sewage air relief valve were “pollutants” within the meaning of the pollution exclusion in the liability policy issued to the county public service district, and that the exception to the pollution exclusion did not apply,  joining a growing number of states that have classified foul odors as pollutants and, therefore, excludable from insurance coverage.

Insurance Insight – Protection against insider cyber threats

Cyber insurance is an important way to ensure protection against increasing cyber threats. However, a New York court decision addressed a common oversight that is found in most cyber insurance policies, that of insider threats. We look at the Universal American Corp. v. Nat. Union Fire Ins. Co. of Pittsburgh, PA decision to help you find ways on getting the most cyber insurance coverage for your clients.

Insurance Insight - Texas Supreme Court clarifies extent of coverage for construction defects under CGL policies

In a matter of first impression, the United States Court of Appeals for the Fifth Circuit certified four questions to the Texas Supreme Court arising from an insured’s claims that its liability for a refinery owner’s replacement costs and downtime damages is covered by its commercial general liability (CGL) policy.

The Texas Supreme Court received motions for rehearing from both sides on January 20, 2016, and is currently receiving amicus briefs. Several associations of contractors and insurer groups have argued opposite one another as amici curiae. Some contractor associations argue that the construction industry needs insurance to manage the risk that one contractor’s work will damage the entire project resulting in significant disruption. On the other hand, two insurer groups argue that it would be bad policy and encourage moral hazard to allow contractors to insure against the quality of their own work.

Insurance Insight - Broad duty to defend applied despite late notice

Even when an insurer receives very belated notice of a suit against its insured, it can face harsh consequences if it does not take action to provide a defense. The Massachusetts Supreme Judicial Court (SJC) recently upheld a large judgment against an insurer for breaching its duty to defend despite notice of the suit very late in the litigation process. This decision places an extraordinary burden on the insurer.