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BT Policyholder Protection Blog
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15 Jun 2018 Kentucky Supreme Court Doubles Down on Wrong Analysis of “Occurrence”

The Kentucky Supreme Court doubled down on its wrong analysis of the “occurrence” issue in Martin/Elias Properties LLC v. Acuity, 544 S.W.3d 639 (2018).  The new decision refuses to find the existence of an “occurrence” where defective basement work performed by a subcontractor caused property damage “throughout the entire property, making it structurally unsound.”  The decision applies an extreme “fortuity” analysis that is not based on the actual CGL policy terms to reach this conclusion.  The decision holds that “the legal analysis used to determine whether something constitutes an accident for issues of CGL coverage is the doctrine of fortuity, which encompasses both intent and control.”  The decision then holds that to determine whether an event constitutes an accident Kentucky courts must analyze (1) whether…

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11 Jun 2018 Is a Settlement of a Restitution Claim Covered If Your Policy’s Ill-Gotten Gains Exclusion Applies Only In the Event of a Final Adjudication?

Can liability insurance insure a policyholder’s legal obligation to return to a third party amounts that the policyholder was never permitted to obtain in the first place? Insurance carriers would cite comments from Judge Posner, of the Seventh Circuit Court of Appeals: “[a]n insured incurs no loss within the meaning of the insurance contract by being compelled to return property that it had stolen, even if a more polite word than ‘stolen’ is used to characterize the claim for the property’s return.” In this vein, insurance company personnel and their coverage counsel frequently take the position that if liability policies exclude from covered “Loss” “matters which are uninsurable” under applicable law, that encompasses a judgment of liability for restitution of amounts which the policyholder was…

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01 Jun 2018 Don’t Accept Policy Exclusions at Face Value, Especially in California

We’ve recently discussed the nuances of an insurer’s continuing duty to defend under California law in a “mixed” lawsuit alleging both covered and non-covered claims after the dismissal of the covered claims.   Insurers, however, sometimes try to evade their duty to defend at the outset, citing policy exclusions that appear – at first glance – to exclude coverage for what would otherwise be the one covered claim. Should you give up on coverage?   We don’t think so. As a preliminary matter, under California law exclusions are strictly construed against the insurer and liberally interpreted in favor of the insured. Accordingly, if there is any ambiguity as to whether the exclusion applies to negate the insurer’s duty to defend, California courts will construe the…

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29 May 2018 Eleventh Circuit Reaches Different Conclusions While Examining Pollution Exclusion

The Eleventh Circuit recently examined two insurance coverage cases involving the applicability of the pollution exclusion.  In one case it held that sewage was not a pollutant, but in the other case it held that storm water was a pollutant.  These cases provide guidance to policyholders who may face a pollution exclusion argument from their carrier in the Eleventh Circuit.    In the case Evanston Insurance Company v. J&J Cable Construction, LLC, the Eleventh Circuit held that damage caused by a sewage leak was not barred by the pollution exclusion. (Case No. 17-11188, April 20, 2018).  The court looked to a prior Alabama case that distinguished industrial waste from residential sewage.  However, the Eleventh Circuit reached the opposite conclusion in the case Centro Development Corp….

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25 May 2018 Minnesota Court of Appeals Confirms Agent Comments Can Bind Insurer

  In January 2017, a jury awarded Prospect Foundry $53,300 on a counterclaim for breach of the implied covenant of good faith and fair dealing. At the heart of the case was a representation by an insurance agent that certain workers’ compensation claims would be closed, or reserves reduced, allowing Prospect to receive a dividend on their workers’ compensation insurance premiums.   The insurer appealed, claiming in part that Prospect’s description of the representations of the agent should not have been permitted into evidence. In an April 16 decision, the Minnesota Court of Appeals affirmed in Western Nat’l Mut. Ins. Co. v. Prospect Foundry, A17-0992, 2018 WL 1787687 (Minn. Ct. App. April 16, 2018).  In relevant part, the court held:   In the past, Minnesota…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 2

This article is the second part in the series, The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues. It was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   Insurance Coverage Issues for the Cloud   In addition to the insurance best practices mentioned above, the cloud can raise multiple insurance issues that should be considered carefully.  For example, how would insurance provide coverage to the cloud provider or the user if there were a data breach or denial of service attack?  But, there are other events in the cyberspace that both cloud providers and users should consider, such as the situation where users cannot access the cloud…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 1

This article was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   The reality that business data of all kinds is now stored, managed, accessed and maintained in the cloud is inescapable.  The reasons for this migration of data from within an organization’s network computing system to a vended cloud provider are infinitely varied.   Whatever the reason fueling the migration of data, one thing is certain – coupled with the movement of data and the use of cloud services is the introduction of additional risk.  It’s true that many companies will actually improve the security of their data by shifting to the cloud.  In many cases, companies…

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17 May 2018 Upcoming Webinar: Insurance Coverage for Opioid Litigation and Lessons for Other Types of Claims

  The number of lawsuits involving opioid pharmaceuticals continues to skyrocket. Hundreds of cases have been filed nationwide, many of which have been consolidated into multidistrict litigation, and the trend shows no signs of stopping soon. Related litigation over the scope of insurance coverage available for these lawsuits also continues to increase, and courts have begun to issue decisions addressing insurers’ coverage obligations. Other coverage disputes are just beginning to wind their way through the courts. This webinar will focus on insurance coverage for opioid litigation, including:   What types of policies might provide coverage for opioid claims The most commonly disputed or litigated coverage issues The current landscape of judicial decisions regarding coverage for opioid litigation What the future may hold for opioid coverage…

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16 Mar 2018 It’s Not Over Until It’s Over: An Insurer’s Continuing Duty To Defend After The Dismissal Of Covered Claims

Imagine this scenario: you are a California policyholder and have been sued in a lawsuit alleging one covered claim and multiple non-covered claims. Your insurer, applying California insurance law, thereafter recognizes both (1) its duty to defend subject to a reservation of rights and (2) your right to independent counsel based on the nature of the reservation of rights.  In the middle of the lawsuit, your defense attorney files a motion for summary adjudication that, when granted, leads to the dismissal of the one covered claim. Your insurer then threatens to stop funding the defense of the case, claiming that the dismissal of the covered claim has terminated its duty to defend. Is your insurer right under California law?   Not in our view. Both…

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15 Mar 2018 Before You Break Ground: Risk, Reward and What You Need to Know About A&E, Legal and Insurance

Barnes & Thornburg and the Associated Builders and Contractors, Inc. hosted “Before You Break Ground: Risk, Reward and What You Need to Know About A&E, Legal and Insurance” on March 7.   Discussion included: Understanding the risks covered and not covered in a commercial general liability policy, such as professional liability, liability assumed in a contract, and additional insured endorsements Controlled insurance programs The surety bond and the role it plays in getting a job started and getting a job finished, from the perspective of the job owner, the general contractor/construction manager, and the subcontractor/supplier Builder’s risk, soft cost, and expense to reduce the amount of loss distinctions Practical tips for submitting claims and maximizing recovery   If you would like access to the materials,…

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