Mealey's Emerging Insurance Disputes : Mealey's : Legal News & Analysis

Mealey's Emerging Insurance Disputes

March 27, 2025
U.S. Tax Court Rules For IRS In Yet Another Purported Microcaptive Case

WASHINGTON, D.C. — In line with the court’s prior rulings in similar cases, a U.S. Tax Court judge ruled against petitioners who challenged adverse Internal Revenue Service determinations regarding a purported microcaptive insurance arrangement, concluding that the arrangement “did not constitute insurance for federal income tax purposes because [a captive insurer] did not distribute the risk of loss among its policyholders, and [the arrangement] was not insurance in the commonly accepted sense.”
March 27, 2025
Illinois High Court Refuses To Disturb Ruling That Exclusion Bars BIPA Suit

CHICAGO— The Illinois Supreme Court on March 26 denied an insured’s petition for leave to appeal an appeals court’s ruling that insurers have no duty to defend it against an underlying class action lawsuit alleging that it violated the Illinois Biometric Information Privacy Act (BIPA) because the policies’ “Recording and Distribution” exclusion barred coverage.
March 27, 2025
In Amended Opinion, Judge Stands By Ruling Insurer Does Not Owe Attorney Fees

CHICAGO —A federal judge in Illinois filed an amended memorandum in a senior care primary liability insurer’s lawsuit challenging coverage for an underlying $934,232 judgment in a wrongful death and negligence action alleging that an insured violated the Nursing Home Care Act by failing to meet the standard of care at its skilled nursing facility, noting that the amended ruling does not affect the court's prior determination that the insurer has no duty to indemnify its insured for the underlying attorney fee award.
March 26, 2025
U.S. Supreme Court Denies Assignee’s Petition Seeking Review Of Coverage Suit

BOSTON — The U.S. Supreme Court refused to disturb a First Circuit U.S. Court of Appeals majority’s ruling that affirmed a lower federal court’s judgment in favor of a professional liability insurer in a breach of contract lawsuit brought by an attorney insured’s assignee, denying the assignee’s petition for writ of certiorari in a coverage dispute arising from an underlying legal malpractice claim.
March 26, 2025
Policy’s ‘Changes In Exposure’ Provision Bars Coverage, 3rd Circuit Affirms

PHILADELPHIA — The Third Circuit U.S. Court of Appeals held that a management liability insurance policy’s “Changes in Exposure” provision unambiguously bars coverage for an underlying breach of fiduciary duty lawsuit, affirming a lower court’s judgment in favor of insurers in a bank’s lawsuit seeking coverage after it became liable for an underlying judgment for the wrongful acts of an acquired company.
March 25, 2025
U.S. High Court Refuses To Review Professional Liability Coverage Dispute

ATLANTA — The U.S. Supreme Court on March 24 denied a petition for writ of certiorari brought by assignees of an accounting services provider insured, refusing to review the 11th Circuit U.S. Court of Appeals’ ruling that affirmed a lower federal court’s grant of summary judgment in favor of a professional liability insurer in their breach of contract lawsuit.
March 25, 2025
No Coverage Owed For Tortious Interference Suit Against Doctor, N.J. Panel Affirms

TRENTON, N.J. — A New Jersey appeals panel affirmed a lower court’s summary judgment ruling in favor of a business liability insurer in its lawsuit seeking a declaration that it has no duty to defend or indemnify its doctor insured against an underlying lawsuit alleging tortious interference with business, finding that the alleged damages “logically arise” from the insured’s purported tortious interference.
March 24, 2025
Suit Alleged Wrongful Acts By Insured, No Coverage Owed, 9th Circuit Affirms

LAS VEGAS — The Ninth Circuit U.S. Court of Appeals concluded that there is no genuine dispute that an underlying lawsuit alleged willful acts by an insured and, therefore, the exclusionary clause in California Insurance Code Section 533 was triggered, affirming a lower federal court’s judgment in favor of the insurer in an coverage dispute arising from underlying claims that the insured illegally stole a competitor’s clients and agents.
March 21, 2025
Subrogee Insurer’s Expert Can Opine On Origin Of Fire, Judge Finds

CINCINNATI — A couple lost their effort to toss a complaint alleging that a fire that originated in their yard spread to a neighbor’s home after an Ohio federal judge ruled that an expert retained by the neighbor and her insurance company is admissible to opine on causation.
March 21, 2025
Florida Panel Affirms No Coverage Ruling In Insureds’ Coronavirus Suit

MIAMI — A Florida appeals court panel held that hotel insureds are not owed business interruption coverage in the absence of “direct physical loss” or “damage” to their properties, affirming a lower court’s ruling in favor of the insurer in a coverage dispute arising from the COVID-19 pandemic.
March 20, 2025
Hawaii High Court Opines On Answers As To Insurer’s Subrogation Rights

HONOLULU — The Hawaii Supreme Court issue an 80-page opinion expanding on its earlier order that answered three reserved questions on how the subrogation rights of property and casualty insurance carriers bear on a proposed global settlement of claims related to the August 2023 Maui wildfires.
March 19, 2025
Delaware Judge Rules For Insured In D&O Coverage Dispute Over Merger

WILMINGTON, Del. — A Delaware judge granted an insured’s motion for summary judgment in a directors and officers liability coverage dispute over claims that directors, officers and controlling shareholders breached their fiduciary duties in connection with the 2019 merger of Viacom and CBS Corp., finding that two underlying actions are not “interrelated” and that the policies’ “Prior Notice” and “Pending or Prior Litigation” exclusions do not bar coverage.
March 19, 2025
Insurer Says Pollution Exclusion Bars Coverage For Carbon Monoxide Injury Suits

DETROIT — No coverage is owed for underlying suits seeking damages for bodily injuries incurred as a result of carbon monoxide poisoning stemming from a malfunctioning pool heater at an insured’s hotel because the excess policy’s pollution exclusion bars coverage for the underlying suits, an excess insurer says in a complaint filed in Michigan federal court.
March 19, 2025
Judge Dismisses Suit Against GEICO After Parties File Joint Notice Of Dismissal

CHICAGO — The same day the parties filed a joint notice of dismissal, an Illinois federal judge dismissed with prejudice insureds’ lawsuit alleging that auto insurers violated the Illinois Consumer Fraud and Deceptive Business Practices Act by charging “excessive” premiums during the COVID-19 pandemic that failed to account for a dramatic reduction in driving.
March 19, 2025
Judgment Entered In Insurers’ Favor In Coverage Dispute Prompted By Opioid Epidemic

TAMPA, Fla. — A federal judge in Florida on March 18 entered judgment in favor of insurers in an insured’s lawsuit seeking coverage for underlying actions arising from the opioid epidemic, finding that the insurers have no duty to defend or indemnify because the opioid lawsuits fail to allege damages “for bodily injury” or “because of bodily injury.”
March 18, 2025
N.J. Panel Affirms Ruling In Insurer’s Favor In Suit Over Breach Of Fiduciary Duty

TRENTON, N.J. —A New Jersey appeals panel held that a comprehensive general liability and directors and officers insurer had no duty to prosecute its insured’s appeal of an underlying breach of fiduciary lawsuit or to cover underlying attorney fees, holding that the insurer’s duty to defend was extinguished because the insured’s actions fell outside the scope of coverage.
March 17, 2025
6th Circuit Asked To Rehear No Coverage Ruling In Professional Liability Dispute

CINCINNATI — An appellant filed a petition for panel rehearing and rehearing en banc asking the Sixth Circuit U.S. Court of Appeals to reconsider its finding that her declaratory judgment and bad faith claims fail because she did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured, arguing that the panel opinion misapplied insurance law, failed to hold the insurer accountable “for its shifting justifications” and created “an insurmountable burden for third parties attempting to report claims.”
March 17, 2025
Judge: Breach Of Contract Exclusion Does Not Bar D&O Coverage For Qui Tam Suit

WILMINGTON, Del. — A Delaware judge ruled in favor of insureds in their lawsuit seeking directors and officers liability coverage for an underlying qui tam action, rejecting the insurers’ argument that the breach of contract exclusion barred coverage.
March 17, 2025
Insurer’s Complaint Is ‘Misuse’ Of Declaratory Judgment Act, Panel Says In Reversal

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 14 reversed a lower federal court’s grant of an insurer’s motion for summary judgment in its declaratory judgment lawsuit arising from an underlying personal injury verdict, concluding that the insurer’s complaint was a “misuse of the Declaratory Judgment Act” because the lower court should have declined to exercise its discretionary jurisdiction.
March 14, 2025
No Coverage Owed For Malpractice Suit Against Law Firm, N.Y. Appeals Court Affirms

NEW YORK — A New York appeals court on March 13 affirmed a lower court’s summary judgment ruling in favor of an insurer in its declaratory judgment lawsuit disputing coverage for an underlying legal malpractice lawsuit arising from a real estate transaction, holding that the law firm insured’s claim predates the policy and that the insured did not satisfy the policy's prior knowledge condition.
March 14, 2025
New York Alleges Insurers Violated State Data Breach Notification Laws

NEW YORK — The people of New York sued insurers in a New York court alleging that they violated state data breach notification laws by failing to alert impacted New Yorkers or state agencies of a data breach in which drivers’ license numbers of close to 200,000 consumers were exposed to attackers.
March 13, 2025
Parties Settle Coverage Dispute Arising From Washington’s Suit Against Puppyland

TACOMA, Wash. — A Washington federal court indicated on its docket that it has been notified that a commercial insurer and its insureds have settled the insureds’ lawsuit seeking a declaration that it has no duty to defend or indemnify against the state of Washington’s underlying lawsuit alleging that the insureds engaged in unfair trade practices by participating in a business scheme that hides pricing information of purebred and designer mixed-breed puppies that they sell at their Puppyland stores.
March 12, 2025
No Professional Liability Coverage Owed For Malpractice Suit, Panel Affirms

SAINT PAUL, Minn. — A Minnesota appeals court concluded that an insurer has no duty to defend or indemnify its law firm insured against an underlying malpractice lawsuit, finding that no claim was “deemed made” during the professional liability insurance policy period.
March 10, 2025
COMMENTARY: Sustainability Recalibration: What Insurers And Policyholders Should Know About ESG (Environmental, Social, and Governance Considerations) Under Trump 2.0, Part 2

By Scott M. Seaman
March 10, 2025
Insurer Disputes Coverage For Suit Alleging Insureds Mispresented Cannabis Product

ROCKFOD, Ill. — A commercial general liability insurer asks an Illinois federal court to declare that it has no duty to defend or indemnify for an underlying putative class lawsuit alleging its insureds knowingly and/or recklessly misrepresented and advertised their product as cannabis concentrates and knowingly and/or recklessly misclassified their products in order to avoid regulations.