How Broad Is the Duty to Defend? This Broad

How many times have you seen a court decision or commentary stating that the duty to defend is broader than the duty to indemnify?  A lot I bet.  Essentially, a policy with a duty to defend provides “litigation” insurance to the policyholder, even though the claim may never result in any indemnity payment.  Most courts will liberally construe the allegations in the complaint and generously interpret the provisions of the insurance policy to find the duty to defend.  A recent First Circuit case construing Maine law provides another example of exactly how broad the duty to defend is as interpreted by many courts.

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A Brief Review of What’s Happening in TCPA Insurance Coverage Cases from TCPAWorld

Insurance policy on a desk

This is a repost from #TeamSPB’s TCPAWorld blog on a quick review on recent TCPA insurance coverage cases.  You can read the post here on TCPAWorld or read below the break.

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No Fraud In Structured Settlement Payments Because of Broker Commissions

Treasure chest on white.

When insurance companies settle cases they often enter into structured settlements where they take a certain amount of money to purchase an annuity to fund the settlement.  The annuity then provides the periodic settlement payments to the settling party over time.  The principle amount used to purchase an annuity is generally the amount necessary today to sustain periodic payments over an agreed amount of time based on the interest rate provided by the life insurance company issuing the annuity.  In other words, the annuity premium payment is the present value of the total number of payments that will be received by the beneficiary of the annuity over time.  In a recent case, settling parties sued settling insurers for fraud in a putative class action under RICO because brokers that placed the annuities received a commission from the proceeds used to purchase the annuities.

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New York Court of Appeals Holds Non-domiciliary RRG Not Covered Under New York Late Disclaimer Rules

Insurance policy on a desk

The federal Liability Risk Retention Act allows for the creation of industry groups–Risk Retention Groups (“RRG”) or Purchasing Groups–that are exempt from certain state insurance regulation requirements outside the RRG’s state of charter.  Most states, if not all, have unfair claims practices acts and those statutes are expressly applicable to RRGs.  Many states also have statutes requiring timely disclaimers by insurance companies for liability policies covering personal injuries.  Do the requirements for timely disclaimers (or the penalties for untimely disclaimers) apply to a non-domiciliary RRG?  The New York Court of Appeals, with one dissent, has answered that question.

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Untimely Notice Causes Loss of Directors and Officers Coverage

Claims-made and reported policies typically contain, as a condition precedent, fairly strict notice requirements.  The entire point of a claims-made policy is to restrict the policy to claims made during the policy period and reported during the policy period or any extended reporting period.  Giving notice early and often is a mantra that is often ignored when a policyholder is hit with lawsuits.  Ignoring these notice requirements, however, can cause coverage to be lost as policyholders found out in a recent Sixth Circuit case.

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When Seeking Coverage for Trademark Infringement Policy Exclusions Matter

Man reading paper document

In a recent case, the 4th Circuit Court of Appeals affirmed the dismissal of a coverage dispute based on unambiguous exclusions barring coverage.  Nothing dramatically unique here, but it serves as a good example of the need to read and understand the insurance policy and all of its exclusions.   Continue Reading

June 2019 Reinsurance Newsletter

Our June 2019 Reinsurance Newsletter is out and available here.  The Newsletter covers a wide variety of cases from the most recent US Supreme Court case on arbitration to decisions on consolidation, reinsurance information and confirmation.  Other cases discussed concern expenses in addition to the facultative limit and motions to dismiss breach of contract claims.  We also have a section updating recent regulatory developments.  We hope you enjoy the newsletter.

Invasion of Privacy Exclusion Bars Coverage for TCPA Action and Settlement

Where an insurance policy has an express exclusion for Telephone Consumer Protection Act (“TCPA”) claims it is pretty clear that coverage will not be available.  But where the insurance policy does not have an express TCPA exclusion, does an Invasion of Privacy Exclusion bar coverage for alleged TCPA violations?  A Florida federal court recently found that there is no coverage for a TCPA claim where the policy has an Invasion of Privacy Exclusion.

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Breach of Cooperation Clause Shields Carrier From Duty to Indemnify

Woman holding a shield

The cooperation clause in an insurance policy is an essential part of the insurance bargain.  If the policyholder does not cooperate in the reporting or investigation of a claim, the coverage the policyholder paid for may be lost.  In a recent case, a policyholder whose employees lied to investigators was found to have breached the cooperation clause and the insurer was relieved of its duty to indemnify the policyholder.

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English Court of Appeal Clarifies the Law on Notification of Circumstances

In Euro Pools Plc (in administration) v. Royal and Sun Alliance Plc [2019] EWCA Civ 808, the Court of Appeal considered the parameters and effect of a notification of a circumstance by an insured that could give rise to a subsequent claim under a professional indemnity insurance policy.  The court held that an insured could make a broad “can of worms” notification of circumstances to its insurers such that a subsequent claim with a causal connection to the circumstances previously notified could be covered by the policy in question. This was the case notwithstanding the fact that the insured may not have knowledge of the precise causes or consequences of the circumstance notified to insurers.

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