Archives: Insurance Coverage

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Pleading Standards and Consequential Damages In Coverage Disputes

When a policyholder sues its carrier for breach of contract or bad faith, one question that arises is whether the policyholder should have to plead alleged damages with particularity, or whether the policyholder can sustain its claims with less specific allegations.  A New York appellate court recently declined to impose that higher, particularity standard.… Continue Reading

Delaware Superior Court Excludes Coverage for Directors Acting in Dual Capacity as Investors

Directors and officers (“D&O”) liability insurance generally protects directors and officers against legal expenses and personal liability for acts and omissions taken in their capacity as directors and officers of the insured company.  In a recent case, coverage was excluded where directors also acted as investors of the company.… Continue Reading

Can English Law Insurance Policies Cover Fines Imposed Under GDPR?

When the General Data Protection Regulation (“GDPR”) passed into English law on 25 May 2018, one of the headlines that heralded the new legislation was the Information Commissioner Office’s (“ICO”) new power to impose fines of up to €20million, or 4% of global turnover (whichever is the higher) on organisations that breach the GDPR.  Given … Continue Reading

Ninth Circuit Sends Conflict Between Representations of Authorized Insurer Agent and Certificate of Insurance to Washington Supreme Court

Certificates of insurance are ubiquitous in construction projects and in many other industries.  But, as most jurisdictions hold, a certificate of insurance is not the functional equivalent of the insurance policy and cannot be used to amend, extend or alter coverage.  It is merely a piece of paper informing the recipients that insurance has been obtained.  … Continue Reading

No Coverage for a Claim of Impairment of Goodwill and Reputation Under Defamation Endorsement

When a business gets sued it looks to its various insurance policies for coverage and a defense.  But sometimes the insurance policy purchased does not fit the coverage sought.  That was the case in the Seventh Circuit where a restaurant company sought coverage for a claim brought by a television provider for damages when the … Continue Reading

Advertising Injury and Offering For Sale

Whether an activity is advertising such that it comes within the advertising injury coverage grant of a commercial general liability (CGL) policy is a difficult and complicated question.  Maybe it shouldn’t be, but the coverage grant combined with exclusions to avoid coverage for intellectual property infringement claims and coverage write-backs within exclusions makes it complicated. … Continue Reading

Windstorm, Storm Surge, Flood Exclusion and Anti-Concurrent Causation Confusion

Back in October, the U.S. Court of Appeals for the Second Circuit issued a Summary Order (no precedential effect) in a Hurricane Sandy storm surge coverage dispute.  The court reversed summary judgment in favor of the insurer and remanded the case back to the district court to assess whether an endorsement’s anti-concurrent causation clause conflicts … Continue Reading

Coverage for Government Investigations and Warranty of No Known Claims

Obtaining insurance coverage for a government investigation is often complicated by the type of investigation and the available coverage.  Most policies that cover aspects of government investigations–directors and officers liability policies or errors and omissions policies–are written on a claims-made form and exclude claims that relate back to prior or pending claims.  Very often the … Continue Reading

What Happens When a Policyholder Settles Without Involving Its Insurer?

Nobody likes to get sued.  When a lawsuit or a demand letter comes in, the first thing that crosses the mind of the party being sued (or claimed against) is how can I resolve this quickly?  That may be a reasonable visceral reaction to the suit, but what happens when insurance is involved?… Continue Reading

Ramifications of Global Re v. Century Indemnity Evident in Second Circuit

In late 2017, the New York Court of Appeals, in Global Reinsurance Corp. of Am. v. Century Indemn. Co., 30 N.Y.3d 508 (2017), provided guidance to the Second Circuit Court of Appeals on how New York law interprets reinsurance contracts and, in particular, the stated limits in facultative certificates and whether those stated limits are … Continue Reading

Is a Failure to Disclaim Coverage an Unfair Claim Settlement Practice for a Risk Retention Group?

The application of New York Insurance Law § 3420(d)(2), which requires notice of disclaimer as soon as reasonably possible under a liability policy, has resulted in quite a few cases testing its outer limits and proper implementation.  In a recent case, a New York intermediate appellate court was asked to address § 3420(d)(2)’s application in the … Continue Reading

New York Court of Appeals Looks to Policy Language Again to Allocate Risk Proportionately to Insurers

On March 27, 2018, New York’s highest court finally brought closure to an appeal of a 2014 decision denying an insurer’s motion for partial summary judgment in its coverage litigation with its policyholder.  The Court of Appeals’ decision in Keyspan Gas East Corp. v. Munich Reinsurance America, Inc. is available here.  In affirming the Appellate … Continue Reading

Direct Claims Against Reinsurer Fail to Succeed

Direct actions against reinsurers have been on the rise for some time.  To bring a direct action, a policyholder must get over the contractual privity hurdle and find some basis to show a direct relationship or third-party beneficiary relationship.  Many policyholders try to bring these actions, but they more often than not fail at the … Continue Reading

Errors and Omissions and Directors and Officers Clash Gets Some Clarity From the Second Circuit

Most companies that provide specialized or professional services, like stock exchanges, carry both directors and officers liability insurance (“D&O”) and errors and omissions insurance (“E&O”). These coverages are meant to be complimentary and not overlapping.  D&O covers “wrongful acts” by directors and officers.  E&O covers negligent acts in performing professional services.  D&O policies typically exclude … Continue Reading

Lack of Inclusion Means Timely Notice of Disclaimer Is Not Required

Typically, courts are strict when it comes to insurance companies disclaiming coverage.  Generally, a disclaimer must be specific and timely for it to have any chance of being effective.  In many cases, an insurance policy has an exclusion that the insurance company contends precludes coverage.  In other cases, the coverage alleged is just not provided … Continue Reading

Why Suing Every Insurance Company in Sight Does Not Always Work

There is a common misconception that suing everyone in sight is a good idea.  Yes, if you don’t know exactly what related companies (or individuals) ultimately may be responsible for the loss it may make sense to cast a wider net (especially if the limitations period is approaching).  But if it is obvious who the … Continue Reading

Failure to Comply With Protective Safeguards Endorsement Results in Loss of Coverage

A Protective Safeguards Endorsement (“PSE”), as defined by my friends at IRMI, is “[a] property insurance endorsement that makes it a condition of coverage that the protective safeguards cited in the endorsement (such as an automatic sprinkler system or night watch guard) be in operation at all times except when the insurer has been notified of … Continue Reading

The Peril of Settling Without Insurer Consent

In an earlier blog post we discussed a Georgia case where settlement occurred without consent from the insured.  In that case, the court held that when a policyholder settles without consent in the face of a consent to settle clause, the policyholder will not succeed in seeking a recovery for that settlement from the insurance … Continue Reading

Counterfactual Thought Experiments Do Not Establish Bad Faith in New York

The title above is taken from a quote found in a recent Second Circuit non-precedential summary order in an insurance bad faith case.  Bad faith is not easy to establish in New York.  Strategic differences between an insurance company and its insured over whether, how and when to settle an underlying case generally do not … Continue Reading

When Notice of Claim Is a Condition Precedent a Default Judgment May Not Help

Notice of claim or suit requirements in insurance policies are often viewed as a condition precedent to coverage.  If the insured’s carrier is not given notice of the claim in a timely manner, the insurer may have no obligation to defend or indemnify the insured.  But what happens if a claimant sues an insured defendant … Continue Reading

Insured v. Insured Exclusion in Directors and Officers Policies

A typical directors and officers liability insurance policy provides coverage for officers and directors of a corporation for all loss that is not indemnified by the corporation resulting from a covered claim for a wrongful act as defined by the policy.  Virtually all D&O policies also include an “Insured v. Insured Exclusion,” which precludes coverage for … Continue Reading

Property Damage Found Despite Growing Crack Originating Prior to Policy Period

A recent case from a New York intermediate appeals court sheds some light on how the courts interpret property and business interruption coverage for power-generating equipment.  The case raised two interesting issues.  First, whether a pre-existing crack in a power-generating turbine precludes coverage.  The second, whether time-element coverage was available for a loss of future … Continue Reading

New York’s 3420(d)(2) Cannot Be Used Between Insurers

We have written a number of blog posts involving New York Insurance Law Section 3420(d)(2), which requires insurance companies to disclaim quickly or waive the right to disclaim.  Parties have tried to rely on 3420(d)(2) in a variety of ways.  In a recent case, the Second Circuit Court of Appeals was asked to address the … Continue Reading
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