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Whether a Partial or Complete Cessation of Business Is Required for BI Coverage – COVID-19

With the COVID-19 pandemic showing few signs of slowing down in the immediate future, reality is starting to settle in on businesses and governments. As Congress and various state legislatures continue to discuss legislation aimed at remedying the economic damage caused by the pandemic, many businesses are grappling with extensive interruptions to their operations. In … Continue Reading

Actual Cash Value: Is the Cost of Labor Part of Depreciation? The Courts Are Divided

Depreciation typically is deducted from the actual cash value (“ACV”) of property when the insured elects to have its property damage claim paid on an ACV basis.  No one doubts that depreciation includes the cost of materials.  The question is, however, whether the cost of labor can be depreciated as well.  In a few recent … Continue Reading

COVID-19 and Waiting Periods Under Business Interruption Coverage

As the COVID-19 pandemic continues, businesses and governments are acting to flatten the curve.  Recently, California, the largest state by population, implemented an extensive quarantine statewide, affecting over 40 million people.  New York and other states and municipalities also have issued similar closure orders.  In this blog post, we continue to examine the issues surrounding … Continue Reading

Civil Authority Orders and COVID-19 Coverage

The COVID-19 pandemic is ongoing and local and state governments are issuing directives closing restaurants, movie theaters, gyms and other businesses.  Some local governments have even issued shelter-in-place orders.  In other instances, some businesses have begun closing their doors as a preemptive measure, either to reduce the spread of the virus or in response to … Continue Reading

Can Coverage for COVID-19 Be Excluded?

Business insurance policies contain exclusions precluding coverage under specified circumstances. Two exclusions potentially relevant to COVID-19 claims are the virus, bacteria or communicable disease and pollution exclusions. In this blog post, we examine these exclusions in the context of coverage issues for COVID-19.… Continue Reading

Businesses Scramble to Assess Insurance Coverage for COVID-19

COVID-19 has sickened hundreds of thousands of people and resulted in the deaths of thousands. Millions will likely be affected. Up until very recently, there was widespread belief that some countries may be spared the level of disruption seen earlier this year. Recent events have shown this is no longer a reasonable assumption. The WHO … Continue Reading

And So It Begins: The COVID-19 Coverage Cases Start

The first insurance coverage case has been brought by a restaurant in New Orleans seeking a declaratory judgment against its insurer, as well as the governor and the state, that the restaurant’s insurance policy does not contain an exclusion for viral pandemic and that the policy will cover the restaurant for any future civil authority … Continue Reading

Duty to Defend Found on Claims Under California Credit Card Act

Among the various consumer data privacy laws are laws precluding companies from collecting and selling consumer credit card information.  When a company is accused of selling its customers’ credit card information to third-parties in a class action, does it have insurance coverage to defend it from that class action?  The Ninth Circuit recently addressed this … Continue Reading

The Facts Matter in Prospective Coverage Disputes Over COVID-19

There are two main questions in every insurance coverage dispute.  First, what are the actual facts that gave rise to the claim?  Second, what are the actual words contained in the specific insurance policy provisions relevant to the claim?  The facts and words matter because, more often than not, each claim and each policy has … Continue Reading

Failure to Allocate Between Covered and Non-covered Damages Bars Indemnity

Insureds often face lawsuits where the claimant is seeking a broad array damages some of which may be covered by insurance and some of which are not covered by insurance.  Because the duty to defend is very broad, insurance companies will typically defend under a reservation of rights concerning the allocation between covered and non-covered … Continue Reading

Federal Risk Retention Act Preempts State Anti-arbitration Law

During an earlier insurance availability crisis, the federal government enacted the Liability Risk Retention Act (“LRRA”).  Under the LRRA, a risk retention group (“RRG”) can be formed in one state and can do an insurance business in other states.  As discussed in a recent blog post, some states have passed anti-arbitration laws that preclude insurance … Continue Reading

Privacy Exclusion Precludes Coverage for Claims of Breach of Driver’s Privacy Protection Act

As data privacy statutes proliferate, insurance coverage disputes are rising concerning whether liability policies cover the defense and indemnification of violations of data privacy statutes.  Many of these consumer data privacy statutes predate the mass electronic collection and storage of personally identifiable information.  The analysis is similar about whether there is coverage against lawsuits arising … Continue Reading

Breach of Fiduciary Duty and Negligent Misrepresentation Is Not Property Damage

To obtain coverage under a property insurance policy there has to be property damage caused by an occurrence during the policy period.  Seems simple, but as we have seen, sometimes the round peg just does not fit in the square hole.  In a recent case, the Ninth Circuit addressed whether allegations of breach of fiduciary … Continue Reading

It Is Tough to Avoid the Duty to Defend

Most states view the duty to defend more broadly than the duty to indemnify.  Some people call the duty to defend “litigation insurance” because it often applies even where the allegations are slim, conclusory and ultimately untrue.  A recent Fifth Circuit case reemphasizes how many courts address the duty to defend.… Continue Reading

When You Agree to Buy Out Partner Upon Death and Fail to Do So Don’t Expect Your Insurer to Defend You

A Directors and Officers (“D&O”) insurance policy provides coverage for a multitude of actions by corporate officers.  D&O policies, however, come with many exclusions to void coverage for intentional acts and other actions founded on contracts and other instruments.  Many corporate officers, especially in smaller companies, look to D&O policies to defend and indemnify them … Continue Reading

Defamation Plaintiff Has Default Judgment But Not Standing To Sue Insolvent Policyholder’s Insurance Company

Bankruptcy and insurance have been engaged in a tangled web for decades.  Claimants against bankrupt insureds are often frustrated in seeking a recovery that they might otherwise obtain if the insured had not gone bankrupt.  In a recent case, the Third Circuit addressed the standing of a default judgment creditor claimant to sue the bankrupt … Continue Reading

Misrepresentation Results in Loss of Coverage

One of the best ways for a policyholder to lose its insurance coverage is to conceal or misrepresent material facts and circumstances about the claim.  In a recent case, the Sixth Circuit Court of Appeals affirmed summary judgment in favor of the insurance company dismissing a policyholder’s claims against its insurance carrier for not paying … Continue Reading

Extrinsic Evidence Leads to Summary Judgment on Aggregate Corridor Deductible

Some insurance programs are simple:  one primary policy, one excess policy.  Easy.  Some insurance programs are complex and contain many layers and coverages.  In the case discussed below, the court had to interpret how an Aggregate Corridor Deductible (ACD) in one policy worked and how it affected when the second policy came on risk.… Continue Reading

Does Physical Loss or Damage Include Loss of Use, Reliability or Impaired Functionality?

Cyber attacks on computer systems have spawned myriad coverage disputes over whether the data stored on the computer system tangible property that comes within property insurance coverage or whether the computer system has to be rendered unusable.  As cyber attacks have grown and morphed from hacking to ransomware to other types of intrusions, and as … Continue Reading

Court Finds No Insurance Coverage for TCPA Settlement

What happens when the Expected or Intended Exclusion and the Information Exclusion bump up against a policyholder’s suit for breach of contract, bad faith and improper denial of a claim based on an alleged TCPA violation?  You’ll have to visit our blog post on TCPAWorld.com to find out.  Suffice it to say that the insurance … Continue Reading

Binding Arbitration Award In Coverage Dispute Ends Later Coverage Litigation

Many insurance policies have binding arbitration clauses along with other provisions that address whether a lawsuit may be brought against the insurance company.  What happens when the arbitration goes against the policyholder?  Can the policyholder then sue the insurance company over the same coverage dispute even if the arbitrator ruled against the policyholder?… Continue Reading

Claims By Tort Claimants Against Municipal Insurer Over Coverage for Sexual Abuse Dismissed By Federal Court

Typically, a claimant has no direct right of action against an insurance company especially prior to a judgment against the insured.  Even more typically, a claimant has no right to “cut-through” to the reinsurers based on an alter ego or fronting claim when the claimant is not the insured and is not in contractual privity.  … Continue Reading

Fore! Golf Sponsor’s Claims Against Insurance Agency on Hole-in-One Insurance Dismissed

Prize sponsors often procure insurance policies to reimburse them for prize payouts.  Generally, those policies are pretty specific about the criteria that allows for the reimbursement.  Hole-in-one insurance is particularly popular.  In a recent case a policyholder sought relief against its insurance agent on various theories after it lost its coverage battle because of an … Continue Reading
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