Recent Posts
Follow Us
twittergoogle_pluslinkedinrssyoutube
The Legal Stuff
BT Policyholder Protection Blog
0 0

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…

READ MORE
0 0

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…

READ MORE
0 0

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….

READ MORE
0 0

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…

READ MORE
0 0

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…

READ MORE
0 1

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…

READ MORE
0 0

19 Dec 2017 Who Gets Coverage? Cyber Insurance and Credit Card Risks: Will Coverage Apply After the P.F. Chang’s Denial?

Authored by Scott Godes & Devin Stone   When a retailer or merchant purchases a broad cyber insurance policy to cover hacks or breaches of its point of sale systems, it could be forgiven for thinking that its insurance policy would cover the costs of fraudulent charges and card replacement costs – which can represent the majority of damages generally incurred in a payment card incident – demanded by the payment processor or the card brands. But one recent decision in the Federal District Court of Arizona has held that certain cyber insurance policies do not provide coverage for those damages. P.F. Chang’s China Bistro, Inc. v. Federal Ins. Co., 2016 WL 3055111 (D. Ariz. May 31, 2016), appeal dismissed pursuant to settlement, No. 16-16141, Dkt….

READ MORE
0 0

03 Nov 2017 Daubert Challenge Resolves Coverage Dispute on Summary Judgment

  Daubert challenges are common in commercial disputes and often have a powerful impact on litigation results. As established by Federal Rule of Evidence 702 and the U.S. Supreme Court case Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 589 (1993) certain requirements were set forth for expert testimony to be admissible, like the expert’s qualifications and whether the testimony is based on sufficient facts and reliable methods.   However, it is not often that you see a Daubert challenge resolve an entire insurance coverage dispute – let alone at the summary judgment phase. Yet, the recent case Varlen Corporation v. Liberty Mutual Insurance Company, No. 13-cv-05463 (N.D. Ill. Sept. 25, 2017), did just that.   This case involved a coverage dispute stemming from environmental contamination that hinged on whether the pollution…

READ MORE
0 0

13 Oct 2017 Clock Keeps Running on Insurers’ Good Faith and Fair Dealing Obligations in California

  Imagine this: Your insurer denied coverage, forcing you to file a lawsuit to secure policy benefits. The insurer retains litigation counsel and begins engaging in unreasonable litigation conduct to attempt to force you to abandon the case and to justify the insurer’s prior denial of coverage. What should you do?   Don’t ignore the ongoing bad faith conduct that may be occurring during litigation. In fact, under California law, the implied covenant of good faith and fair dealing in every insurance policy does not cease upon the filing of litigation and instead continues unabated. The standard dates back to 1985, when, in White v. Western Title Ins. Co., the California Supreme Court held “[i]t is clear that the contractual relationship between insurer and the…

READ MORE
0 0

08 Sep 2017 Anti-Concurrent Causation Clauses: Why the Value of Your Property Coverage May Depend on Your State

A powerful storm pummels your city with high winds and heavy rains. After more than two days of intense wind and rain, the saturated hill behind your factory finally gives way and crashes into it. The building is severely damaged and your business operations are put on hold pending repairs. You need insurance money fast and file a claim with your property carrier.   Even though the policy doesn’t exclude property damage caused by wind or rain, it does contain an exclusion for earth movement “regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” The carrier denies coverage because of the earth movement exclusion.  Is the carrier right? As it turns out, the answer may depend on…

READ MORE