Recently, the Commonwealth Court of Pennsylvania gave policyholders another victory in the continuing battle with insurers over application of the “multiple trigger” doctrine. In Pennsylvania Manufacturers’ Association Insurance Co. v. Johnson Matthey, Inc., the Commonwealth Court held that the multiple-trigger approach – which expands the number of policies potentially available to provide coverage for long-tail
Court Upholds Coverage Under General Liability Policy for Claim Alleging Failure to Protect Data
In an encouraging development for insureds, the United States Court of Appeals for the Fourth Circuit held that a health care company’s general liability insurer was required to defend the company against claims stemming from an alleged failure to secure electronic medical records. In The Travelers Indemnity Co. of America v. Portal Healthcare Solutions, L.L.C., No. 14-1944 (4th Cir. Apr. 11, 2016), the Fourth Circuit held that the breach resulted in a “publication” of medical records, thus falling within the scope of the general liability policy issued to Portal Healthcare Solutions, L.L.C. (“Portal”). The decision reaffirms that insureds that experience adverse cyber events are not limited to cyber-specific policies as the source of potential insurance coverage.
Portal’s insurer, The Travelers Indemnity Company of America (“Travelers”), commenced litigation in the United States District Court for the Eastern District of Virginia, seeking a determination that it was not required to defend Portal against a putative class action alleging that Portal negligently failed to secure a server hosting medical records, which resulted in those records becoming available on the Internet. Ruling on cross-motions for summary judgment, the District Court sided with Portal, reasoning that the allegations “at least potentially or arguably” alleged a “publication” of private medical information that either (a) gave “unreasonable publicity” to the patient’s private life, or (b) “disclose[d] information” about the patient’s private life. Either circumstance triggered a coverage obligation under the Travelers policies.Continue Reading Court Upholds Coverage Under General Liability Policy for Claim Alleging Failure to Protect Data
Host of insurance-coverage questions tied to Legionnaires’ disease
A recent outbreak of Legionnaires’ disease in New York has, according to published news reports, been responsible for the death of 12 people. According to those same reports, more than 100 other people have become ill as a result of the outbreak, which has been traced to a rooftop cooling tower(s).
For better or worse, when an outbreak of a disease occurs, lawsuits may soon follow. Indeed, recent news stories report that one individual who contracted Legionnaires’ disease in New York just sued the hotel where the outbreak allegedly began. According to published reports, that person is alleging that the hotel was “negligen[t], careless[], and reckless[].”
When such third-party lawsuits – relating to Legionnaires’ disease or some other disease – are filed against an insured, insurance coverage may be available under its commercial general liability (“CGL”) insurance policy(ies). CGL policies typically provide coverage for “damages” on account of “personal injuries” or “property damage.” Relying on various policy exclusions, insurers, however, may try to deny coverage for disease-related lawsuits. So, faced with such a suit, a policyholder should carefully review its policy(ies) and make sure its interests are adequately protected.
Legionnaires’ disease in particular has been at the center of a number of insurance-coverage disputes. According to the U.S. Centers for Disease Control and Prevention, “Legionnaires’ disease … is caused by a type of bacterium called Legionella …. The bacterium is named after a 1976 outbreak, when many people who went to a Philadelphia convention of the American Legion suffered from this disease, a type of pneumonia (lung infection).”
Continue Reading Host of insurance-coverage questions tied to Legionnaires’ disease
Pennsylvania Supreme Court’s decision in Politsopoulos represents victory for policyholders across Pennsylvania
The Pennsylvania Supreme Court recently issued a long-awaited decision in Mutual Benefit Insurance Company v. Politsopoulos, No. J-85-2014, delivering the insured in that case, and policyholders across Pennsylvania, a big victory.
As explained more fully in Reed Smith’s recent Client Alert – “’The” insured versus “any” insured: The Pennsylvania Supreme Court limits the application
Read Insurance Policy as Drafted, Not as Insurance Company “Wishes It Had Drafted It”
Confronted with an ambiguity in its own insurance policy, an insurance company will sometimes attempt to rewrite its policy long after it first issued that policy. Last week, the Pennsylvania Superior Court again rejected such gamesmanship, emphasizing that, when interpreting an insurance policy, a court “must examine and construe the policy as it exists, not the way [the insurer] wishes it had drafted it with the benefit of hindsight.” In Rourke v. Pennsylvania National Mutual Casualty Insurance Company, 2015 PA Super 100 (Pa. Super. Ct. 2015), the Superior Court reaffirmed the long-standing principle that a court cannot rewrite a policy to include terms an insurer omitted.
In Rourke, a 19-year-old (former) foster child was severely injured in an auto accident. Seeking coverage pursuant to their personal auto policy, the (former) foster parents argued that that policy afforded coverage because the 19-year-old was a “family member.” “Family member” was defined in their policy to mean “a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child.” The policy, however, failed to define the terms “foster child” or “ward.” In relevant part, the Court’s analysis focused only on whether the 19-year-old was a “ward.” The insurer claimed that the 19-year-old was not a “ward” because he was not a minor at the time of the accident. The Pennsylvania Superior Court soundly rejected this argument:Continue Reading Read Insurance Policy as Drafted, Not as Insurance Company “Wishes It Had Drafted It”
President Obama Acknowledges Growing Cybersecurity Threats to the Government and Economy, Proposes New Measures to Fight Cyber Risks
Just days after news broke that ISIS hackers forced the shutdown of the U.S. Central Command’s Twitter account, President Obama met with congressional leadership, members of the Federal Trade Commission and the Department of Homeland Security to unveil a proposal to facilitate increased cooperation between the private sector and government to combat growing cybersecurity threats. Citing concerns with preserving national security, public safety and public health, the President proposed new federal cybersecurity legislation, emphasizing that although our digital economy “creates enormous opportunities,” it also “creates enormous vulnerabilities for us as a nation” that are growing and costing us billions of dollars. In remarks on Tuesday at the National Cybersecurity Communications Integration Center, the President further acknowledged the serious legal and liability issues involved with private companies sharing information with the government, and argued that his proposed legislation “includes essential safeguards to ensure that [the] government protects privacy and civil liberties” and other liability protections for companies that share information on cyber threats.
Continue Reading President Obama Acknowledges Growing Cybersecurity Threats to the Government and Economy, Proposes New Measures to Fight Cyber Risks
Wisconsin Supreme Court’s misapplication of the pollution exclusion and disregard for policyholders’ business and purpose in purchasing insurance
Last week, the Wisconsin Supreme Court issued two opinions in which it held that pollution exclusions barred coverage for third-party claims resulting from alleged contamination of water due to the seepage of cow manure and septage, respectively. As addressed in Chief Justice Shirley S. Abrahamson’s dissents to the two decisions, the majority’s opinions in both cases – Wilson Mutual Insurance Co. v. Falk, Nos. 2013AP691, 2013AP776, 2014 WL 7375656 (Wis. Dec. 30, 2014), and Preisler v. General Casualty Insurance Co., No. 2012AP2521, 2014 WL 7373070 (Wis. Dec. 30, 2014) – were faulty for a number of reasons.
Continue Reading Wisconsin Supreme Court’s misapplication of the pollution exclusion and disregard for policyholders’ business and purpose in purchasing insurance
Deputy Secretary of Treasury Encourages Financial Institutions
Top-ranking U.S. officials continue to stress the importance of securing adequate protection in the event of cyberliability losses. Most recently, those efforts have been directed to financial institutions, an industry particularly susceptible to cyber attacks. On December 3, 2014, United States Deputy Secretary of the Treasury, Sarah Raskin, delivered a speech at the Texas Bankers’ Association Executive Leadership Cybersecurity Conference wherein she provided banks with a simple checklist to consider before a cyber attack occurs. Notably, one item on the Deputy Secretary’s checklist was cyberliability insurance – coverage at which the Deputy Secretary recommended all banks take a hard look.
Continue Reading Deputy Secretary of Treasury Encourages Financial Institutions
Court’s reasoning that “bacteria” is not a “pollutant” favorable for policyholders in other cases
Insurance companies often look to the pollution exclusions in their commercial general liability policies in attempts to exclude coverage for many types of claims. They will try to fit all sorts of things within the definition of “pollutants.” Just last Friday, though, the U.S. District Court for the Eastern District of Louisiana made that more difficult, offering a common-sense understanding of the term “pollutant.” That court found that “under Louisiana law, Legionella and Pseudomonas aeruginosa bacteria” – the bacteria which cause Legionnaire’s disease – “do not qualify as ‘pollutants’ within the meaning of [pollution] exclusions.”
Continue Reading Court’s reasoning that “bacteria” is not a “pollutant” favorable for policyholders in other cases
General Liability Insurance and Disease-Related Claims
The Ebola crisis has raised numerous issues worldwide. Many of the concerns sparked by the crisis – particularly in the insurance coverage context – are not unique to that disease, however. For example, coverage concerns relating to Ebola-related claims would be similar to those for many other disease-related claims. Many different types of insurance policies, including general liability policies, could be implicated by such claims.
Continue Reading General Liability Insurance and Disease-Related Claims