Archives: Commercial General Liability

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Pennsylvania Court Confirms Multiple Trigger for Environmental Claims

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 … Continue Reading

Schrödinger’s Coverage: When a Risk is Covered and Not Covered by Insurance

When is a person an “employee” under one insurance policy but not an employee under another?   Conflicting or inconsistent definitions across multiple policy lines issued to the same company can give rise to significant gaps in insurance coverage, as a recent opinion of the U.S. Court of Appeals for the Seventh Circuit instructs, Telamon Corp. … Continue Reading

Eighth Circuit pollution-exclusion opinion a cautionary tale for natural gas industry

The interpretation and application of a pollution exclusion in a commercial general liability (“CGL”) policy is often a fact-specific and jurisdiction-specific exercise. That said, the U.S. Court of Appeals for the Eighth Circuit’s recent decision, applying North Dakota law and interpreting such an exclusion in a CGL policy, should command the attention of the entire … Continue Reading

Reinsurance Deal Raises Red Flags

American International Group, Inc. (“AIG”) recently announced that it entered into a significant reinsurance agreement with a subsidiary of Berkshire Hathaway Inc. (“Berkshire”). Reportedly, that agreement “covers 80% of substantially all of AIG’s U.S. Commercial long-tail exposures for accident years 2015 and prior.”  While AIG states that it “will retain sole authority to handle and … Continue Reading

Recent California Ruling Enables Excess Carriers to Put Additional Pressure On a Primary Carrier to Accept a Reasonable Policy Limits Demand

A California appeals court recently sharpened the teeth of insurance companies’ duty to settle [Ace Am. Ins. Co. v. Fireman’s Fund Ins. Co. (2016) 2 Cal. App. 5th 159].  By broadening the situations in which an insurer can be held liable for failing to settle within limits to include cases that never go to verdict or … Continue Reading

A Recent California Federal Court Decision Restores Coverage For Some Patent-Related Lawsuits

A California district court pushed back on the restrictive interpretation of a standard intellectual property exclusion and found coverage for a policyholder’s patent related lawsuit. The United States District Court (Northern District of California) recently ruled that claims asserting (1) the breach of a patent license agreement and (2) patent misuse were covered under a … Continue Reading

‘Sorry, But You Have Nothing in Common’: The New York Court of Appeals’ Recent Rejection of the ‘Common Interest Doctrine’ Outside the Context of Litigation

The New York Court of Appeals, the state’s highest court, recently rejected an attempt to apply the “common interest doctrine,” an exception to the general rule that communicating privileged information to a third party waives the attorney-client privilege, to situations where separately represented parties communicate attorney-client privileged information in connection with transactions or other circumstances … Continue Reading

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., … Continue Reading

365 Days Later: Lessons Learned from the Pennsylvania Supreme Court

One year ago today, the Pennsylvania Supreme Court issued the first two of four important insurance-coverage law opinions that it would hand down in 2014 and 2015. Those four decisions – which address a number of topics including insurer bad faith, trigger of coverage, policy exclusions, and settlements and reservations of rights – significantly impacted … Continue Reading

Eastern District of New York ultimately arrives at right outcome when interpreting “Employer’s Liability” exclusion in CGL policy

In Hastings Development, LLC v. Evanston Insurance Company, No. 14-cv-6203 (ADS)(AKT) (Oct. 30, 2015), the U.S. District Court for the Eastern District of New York correctly determined that an “Employer’s Liability” exclusion in a commercial general liability (“CGL”) policy only applied and precluded coverage when an insured is sued by its own employee(s) and not … Continue Reading

PA Policyholders May Find Road Blocks In Obtaining Coverage For Misappropriation of Advertising Ideas under CGL Policies

Last week, the United States Court of Appeals for the Third Circuit issued a ruling that may make it more difficult for Pennsylvania policyholders to obtain coverage for the misappropriation of advertising ideas under standard commercial general liability policies. In The Hanover Insurance Company v. Urban Outfitters, Inc., No. 14-3705 (Oct. 23, 2015), the Third Circuit … Continue Reading

Insurers Beware: Respond Promptly or Lose the Right to Control the Defense

The tables may be turning. Insurers often seek to avoid their coverage obligations by invoking time limitations in their policies for providing claim notifications. On the other hand, these same insurers routinely take their sweet time in responding to claims, contending that they need time to “investigate” even before making a decision whether or not to … Continue Reading

If not “determinative,” then at least compelling: Other, specific exclusionary language available on market undermines application of pollution exclusion

Recently, in a non-precedential order, an Illinois appellate court correctly held that a “Pollution and Health Hazard Exclusion” in a commercial general liability policy did not preclude coverage for mold-related bodily injury claims. See In re Liquidation of Legion Indem. Co., 2014 IL App (1st) 140452-U (Sept. 30, 2015) (applying Texas law). That court held, … Continue Reading

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, … Continue Reading

The California Supreme Court Issues Its Landmark Decision in Fluor

On August 20, 2015, the California Supreme Court issued its landmark decision in Fluor v. Superior Court, overruling its prior holding in Henkel Corp. v Hartford, which precluded successor entities from tapping into their predecessors’ insurance assets for inherited long-tail liabilities.  In Henkel, the Court held that a contractual assignment of insurance assets in a corporate … Continue Reading

It Means What It Says: Federal Court of Appeals Rejects Insurer Attempt to Read Limitations Into Additional Insured Endorsement

In the world of insurance coverage litigation, insurance companies like to accuse policyholders of attempting to expand coverage terms, or limit the scope of exclusions, beyond the language’s plain meaning. “The policy means what it says,” is a common refrain insurers use to justify coverage denials. However, a recent decision by the federal Fourth Circuit … Continue Reading

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 of … Continue Reading

Texas Supreme Court Issues Long Awaited Opinion on Additional Insured Coverage

On February 13, 2015, the Texas Supreme Court, in response to certified questions from the Fifth Circuit, held that BP was only entitled to limited coverage for Macondo related claims as an Additional Insured under Transocean's insurance policies. Specifically, the court held the Transocean insurance contracts included the language required to necessitate "consulting the drilling contract" to determine BP's status as an additional insured.… Continue Reading

Pursuing Insurance Coverage for Alleged Mislabeling of Dietary and Herbal Supplement Products

Businesses in the dietary supplement supply chain are taking cover after the New York Attorney General (NYAG) ordered four major retailers to cease and desist the sale and alleged mislabeling of certain herbal supplements. After genetically testing store-brand product samples of Ginko Biloba, St. John's Wort, Ginseng, Garlic, Echinacea, and Saw Palmetto, the NYAG alleged that the supplements were unrecognizable or contained substances other than those disclosed on their packaging labels. Class action lawsuits already have been filed, and the NYAG directed the targeted retailers to provide it with detailed information regarding the manufacturing, testing, and procurement of the herbal supplements, and announced that it may bring charges for alleged deceptive practices in advertising.… Continue Reading

Harmonizing Risk Transfer: Avoiding Pitfalls With Additional Insured Provisions

Insurance requirements in commercial agreements and corresponding additional insured provisions in insurance policies are important tools to manage and transfer risks. However, far too often those efforts are thwarted by inattention and, in some cases, sloppiness. As exemplified by the disastrous outcome for the contracting parties in Cincinnati Insurance Company v. Vita Food Products, Inc., No. 13 C 05181 (E.D. Ill. January 30, 2015), there are many pitfalls to successfully transfer risk and secure additional insured coverage.… Continue Reading

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

Another Listeria Outbreak Reminds Food Industry to Revisit Insurance Program

On December 19, the U.S. Centers for Disease Control and Prevention (CDC) recommended that U.S. consumers not eat any commercially produced, prepackaged caramel apples and that retailers not sell or serve them as they continue to investigate an outbreak of listeria monocytogenes which has infected at least 28 people from 10 states. The CDC has yet to identify the producer of the contaminated apples. Accordingly, the number of market players in the supply chain who will be affected by this recommendation - from farms through supermarkets - remains unknown.… Continue Reading

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

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
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