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

Mealey's Emerging Insurance Disputes

April 11, 2025
Panel: No E&O Coverage Owed For $13.3M Insurer Paid To Settle Wrongful Death Action

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 10 affirmed a lower federal court’s grant of summary judgment in favor of errors and omissions insurers, concluding that the E&O insurers have no duty to provide coverage for the loss a general liability insurer incurred when it paid a $13.3 million judgment in a wrongful death action brought against its motel owner insured.
April 11, 2025
Illinois Genetic Privacy Act Does Not Apply To Life Insurance, Judge Rules

EAST ST. LOUIS, Ill. — The Illinois Genetic Privacy Act (GIPA) “does not apply to the underwriting practices concerning life insurance policies,” an Illinois federal judge found, granting an insurer’s motion to dismiss a putative class claim under GIPA brought against it by a woman who claimed that she was denied a life insurance policy based on information she provided about her family’s medical history.
April 10, 2025
4th Circuit: Insurer Does Not Have To Contribute To $9M Wrongful Death Settlement

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals reversed a lower federal court’s ruling that a defendant insurer has to contribute $1 million in primary coverage to an underlying $9 million wrongful death settlement and affirmed the lower court’s finding that the defendant insurer’s excess coverage was not triggered, concluding that both coverages were limited to employees of Surry County, N.C., Emergency Services and did not extend to employees of Surry County's 911 call center.
April 10, 2025
Delaware Judge Dismisses 1 Insurer In Coverage Dispute Over Medicaid Fraud Claims

WILMINGTON, Del. — Three days after an insured and one of its insurers filed a stipulation asking a Delaware court to dismiss with prejudice all claims against the insurer in a professional liability coverage dispute arising from a Medicaid fraud investigation, the judge ordered the case against the insurer dismissed.
April 09, 2025
Federal Judge Dismisses CGL Coverage Dispute Arising From Fatal Shooting

NEWNAN, Ga. — Three days after parties filed a stipulation of dismissal, a federal judge in Georgia dismissed a commercial general liability insurer’s declaratory judgment lawsuit challenging coverage for a wrongful death/premises liability lawsuit brought against a Quality Inn & Suites.
April 08, 2025
Judge: Insurers Fail To Allege Subrogation Claims In Suit Over Ransomware Attack

WILMINGTON, Del. — A Delaware judge granted an application service provider’s motion to dismiss with prejudice insurers’ amended complaints because the insurers failed to properly assert subrogation claims seeking recovery from the provider for the amount paid to nonprofit insureds for investigative and remediation steps arising from a ransomware attack.
April 08, 2025
Insurers: ‘Had SCE Acted Responsibly, The Eaton Fire Could Have Been Prevented’

LOS ANGELES — Insurers have filed a subrogation lawsuit alleging negligence and inverse condemnation against Southern California Edison Co. (SCE) in a California court, alleging that the Eaton fire could have been prevented had the defendant acted responsibly.
April 08, 2025
6th Circuit Refuses To Reconsider No Coverage Ruling In Professional Liability Suit

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied an appellant’s petition for panel rehearing and rehearing en banc, refusing 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.
April 07, 2025
Multiple Claims Alleged By Insured In Faulty Work Coverage Suit Dismissed

NEWARK, N.J. — A New Jersey federal judge granted a professional liability insurer’s motion to dismiss an insured’s claims alleging breach of contract, bad faith, unjust enrichment and declaratory judgment after determining that the insured failed to identify a policy provision that was breached and failed to show that the insurer’s denial of coverage for an underlying suit related to the insured’s architectural work was unreasonable.
April 07, 2025
Missouri Panel Partly Reverses Ruling In Insurer’s Favor In COVID-19 Coverage Suit

KANSAS CITY, Mo. — A Missouri panel affirmed in part and reversed in part an insured’s breach of contract lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the court cannot hold that one of the insurers was entitled to judgment as a matter of law under its primary “all-risk” property insurance policy’s Pollution Contamination exclusion and the master policy's Mold, Mildew & Fungus Clause and Microorganism exclusion on the insured’s claims for loss of attraction coverage.
April 03, 2025
Amici Support Auto Insurers In U.S. High Court Dispute Over Class Decertification

WASHINGTON, D.C. — The Chamber of Commerce of the United States of America, the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies, as well as the Washington Legal Foundation, filed amicus curiae briefs in the U.S. Supreme Court in support of automobile insurers, challenging a majority of the Ninth Circuit U.S. Court of Appeals’ conclusion that a lower court abused its discretion when it decertified a negotiation class because the insureds established that “injury could be calculated on a class-wide basis.”
April 03, 2025
Citing Settlement Negotiations, Judge Denies Motions In D&O Coverage Row

INDIANAPOLIS — Noting that the “parties report they are in the process of finalizing a formal settlement agreement,” an Indiana federal judge denied without prejudice a motion for oral argument and the parties’ cross-motions for summary judgment in a suit filed by an insurer now in rehabilitation seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
April 02, 2025
Petition Distributed In High Court In Row Over Status Of Underwriting Association

WASHINGTON, D.C. — The U.S. Supreme Court on April 1 distributed for conference a petition filed by the state-created Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides coverage to health care providers, including those previously insured by insurers in liquidation, seeking review of a Third Circuit U.S. Court of Appeals ruling holding that the JUA did not have constitutional rights to challenge the constitutionality of Pennsylvania laws due to JUA’s nature as a public entity instead of a private one.
April 02, 2025
BSA Claimant Not Bound By Insurance Equity Injunction, Federal Judge Affirms

WILMINGTON, Del. — A Delaware federal judge affirmed a bankruptcy court’s conclusion that a claimant can continue to seek recovery from insurers for an underlying judgment that he obtained against his abuser in his lawsuit against the Boys Scouts of America and a local council, agreeing with the bankruptcy court that a trustee failed to carry the burden of demonstrating that the claimant was given notice of the Insurance Entity Injunction in the Boy Scouts of America’s third modified, fifth amended Chapter 11 reorganization plan that contemplates the creation of a settlement trust to “assume liability for all Abuse Claims.”
April 02, 2025
Parties Seeks Dismissal Of 1 Insurer In Coverage Dispute Over Medicaid Fraud Claims

WILMINGTON, Del. — An insured and one of its insurers filed a stipulation asking a Delaware court to dismiss with prejudice all claims against the insurer in a professional liability coverage dispute arising from a Medicaid fraud investigation.
April 01, 2025
Fact Issues Preclude Summary Judgment, Wisconsin Panel Rules In Reversal

MADISON, Wis. — A Wisconsin appeals panel reversed a lower court’s ruling that an insurance policy’s “worker-injury” exclusion barred coverage for an underlying negligence lawsuit arising from a construction site injury, finding that fact issues preclude summary judgment in favor of the insurer.
April 01, 2025
Federal Judge Rules For Insurer In Coverage Dispute Arising From Ghost Gun Claims

NEW YORK — A federal judge in New York granted a commercial general liability insurer’s motion for partial summary judgment and denied a firearms retailer insured’s cross-motion in a coverage dispute arising from ghost gun lawsuits after finding that the underlying actions “clearly allege” that the insured “engaged in deliberate conduct,” further denying the insured’s motion for attorney fees.
April 01, 2025
Delaware Judge: Products Liability Claims Against Mattel Constitute 1 ‘Occurrence’

WILMINGTON, Del. — A Delaware judge determined that underlying products liability claims brought against Mattel Inc. and Fisher Price Inc. (collectively, Mattel) constituted a single “occurrence” under their tower of commercial general liability insurance policies and should be allocated by the year in which the bodily injury occurred for the policies above the primary tower level, further finding that Great American Assurance Co. has a duty to defend against claims that were allocated to 2013.
April 01, 2025
Washington Panel: Tribe Fails To Show COVID-19 Caused Direct Physical Loss, Damage

SEATTLE — A Washington appeals court panel on March 31 held that a federally recognized Indian tribe did not state a claim that the coronavirus caused “direct physical loss or damage” to its insured properties, affirming a lower court’s dismissal of the insured’s bad faith complaint arising from the pandemic.
March 31, 2025
Judge Refuses To Toss Property Owner’s Coverage Suit Over Hard Rock Hotel Collapse

NEW ORLEANS — A federal judge in Louisiana denied builders risk insurers’ motion to dismiss a property owner’s breach of contract lawsuit seeking additional insured coverage for its $89,877,694 in losses arising from the aftermath of the partial collapse of a Hard Rock Hotel project in New Orleans, concluding that the insureds’ claims cannot be dismissed as prescribed.
March 28, 2025
Collateral Estoppel Bars Insured From Relitigating Certain Issues, Panel Affirms

HARTFORD, Conn.— A Connecticut appeals court affirmed a lower court’s grant of a marine cargo insurer’s motion for summary judgment in an insured’s breach of contract and bad faith lawsuit seeking coverage for the alleged theft and/or misappropriation of 25,250 metric tons of its alumina, finding that the lower court properly determined that the doctrine of collateral estoppel barred the insured from relitigating the issues as to whether the material was stolen and/or misappropriated and whether the material was seized by agents of the Chinese government.
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.