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

Mealey's Emerging Insurance Disputes

July 22, 2025
Doctor Insured: Hidden Cameras Constitute Physical Alteration, Loss Of Use

NEW YORK — A doctor argues to the Second Circuit U.S. Court of Appeals that a lower federal court erred in dismissing her breach of contract lawsuit seeking business interruption and umbrella coverage for her losses arising from discovery of hidden cameras at her dermatology office, asserting that the hidden cameras constituted a physical alteration and loss of use and satisfied her insurance policy’s direct physical loss or damage requirement.
July 22, 2025
No Coverage Owed For Damaged AC Units Because Hotel Was Vacant, Panel Affirms

CHICAGO — The Seventh Circuit U.S. Court of Appeals determined that a lower federal court’s discovery sanctions against a hotel owner insured were “an appropriate, proportionate response” to the insured’s failure to produce requested documents as to the hotel’s occupancy and not an abuse of discretion, affirming a lower court’s ruling that there was no coverage owed for the hotel’s damaged air conditioner units because the hotel was vacant at the time of the vandalism and the insurer did not act in bad faith.
July 21, 2025
2nd Circuit Reverses Ruling In Free Speech Suit Arising From Insurance Program

NEW YORK — On remand from the U.S. Supreme Court, the Second Circuit U.S. Court of Appeals held that a former superintendent of the New York department that regulates insurance is entitled to qualified immunity on the National Rifle Association of America’s (NRA) First Amendment coercion and retaliation claims against New York state officials and the department “because of the markedly attenuated link between facially valid law enforcement against a third-party associate and an infringement of a plaintiff's First Amendment rights” and reversed a lower federal court’s order denying the former superintendent and the department’s motion to dismiss the NRA’s suit alleging that she unconstitutionally threatened or coerced an insurer or other entities to stifle its speech.
July 21, 2025
Judge: Assault & Battery Exclusion Bars Coverage For Suit Over House Cleaner’s Death

GALVESTON, Texas — A Texas federal judge granted a commercial general liability insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend or indemnify its insured for an underlying negligence lawsuit brought against its contractor insured, finding that coverage is barred because the underlying claims arise from an assault and battery, which resulted in the death of a house cleaner.
July 18, 2025
Panel: Insurer Has No Duty To Indemnify $58.5M Judgment Over Mishandled Bodies

PASEDENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that a commercial insurer has no duty to indemnify a convicted felon for a $58.5 million underlying state court judgment for his mishandling of donated bodies, finding that the appellants are collaterally estopped from relitigating the issue of the felon’s relationship with the insured company.
July 17, 2025
Panel Affirms Dismissal Of Assignee’s Coverage Suit Arising From Infant’s Death

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of insurers’ motion to dismiss an insured’s assignee’s breach of contract lawsuit seeking $300,000 in coverage for an underlying wrongful death settlement arising from the drowning death of his infant son, finding that the assignee failed to sufficiently assert that he incurred a “bodily injury” that might otherwise entitle him to coverage under the homeowners insurance policy.
July 17, 2025
Judge Certifies Class In Suit Challenging Homeowners Insurer’s ACV Calculation

SAN FRANCISCO — A federal judge in California granted plaintiffs’ motion for class certification in their breach of contract, bad faith and unfair competition lawsuit alleging that their homeowners insurer has a common practice of depreciating sales tax when calculating actual cash value (ACV) benefits to insureds.
July 16, 2025
5th Circuit Vacates, Remands Ruling On IP Exclusion In Coverage Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals vacated a lower federal court’s ruling that an insurance policy’s intellectual property (IP) exclusion unambiguously barred coverage for an underlying lawsuit alleging that an insured bribed and induced a competitor’s employees to wrongfully misappropriate confidential information and remanded, holding that the insured set forth a reasonable construction of the exclusion.
July 15, 2025
Insured Appeals Denial Of Motion For Relief From Judgment In Coronavirus Suit

ELIZABETH CITY, N.C. —A hotel and restaurant owner insurer notified a North Carolina federal court that it is asking the Fourth Circuit U.S. Court of Appeal to review the court’s recent denial of its motion for relief from a 2021 judgment dismissing its breach of contract and bad faith lawsuit arising from the coronavirus pandemic.
July 14, 2025
9th Circuit Affirms Dismissal Of Driver’s Claim For Larger COVID-19 Refunds

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed the dismissal of a driver’s class action against her insurer, GEICO, for violating California’s unfair competition law (UCL) by providing drivers an insufficient rebate on premiums after the COVID-19 pandemic, finding that the insurer was protected by the “‘safe harbor’” doctrine as the state insurance commissioner approved its rebate amounts.
July 07, 2025
Judge Dismisses Bad Faith Suit Against Employment Practices Liability Insurer

BUTTE, Mont. — A federal judge in Montana granted an employment practices liability insurer’s motion to dismiss with prejudice a bad faith coverage lawsuit arising from claims that a hospital insured and its employees wrongfully harassed and retaliated against other employees for reporting patient abuse and neglect.
July 03, 2025
Delaware Judge: SEC’s Tolling Request Not Securities Claim Under D&O Policy

WILMINGTON, Del. — A Delaware judge denied an insured’s motion for partial summary judgment in its breach of contract lawsuit seeking directors and officers liability coverage for the more than $26 million in costs that it incurred in connection with an underling settlement with the U.S. Securities and Exchange Commission, finding that a tolling request by the SEC is not a securities claim under the policy and, even if it was, the tolling request does not seek redress in response to any corporate act to trigger coverage.
July 02, 2025
Alaska High Court Partly Reverses Ruling In Suit Arising From Lapsed Policy

ANCHORAGE, Alaska — The Alaska Supreme Court affirmed a lower court’s holding that an insurer failed to send a general contractor insured notice of the nonrenewal of its workers’ compensation and employers liability insurance policy pursuant to a statute and, therefore, breached its contract with the insured, but reversed the lower court’s determination of when prejudgment interest began to accrue and remanded for recalculation of the interest.
July 02, 2025
Judge: Potential For Umbrella Coverage For Negligence Suit Over Electrocution

BALTIMORE — A federal judge in Maryland granted a motion by the operator of a commercial grain and farm supply business to dismiss an insurer’s counterclaim seeking reimbursement of underlying defense costs for a negligence lawsuit arising from the electrocution death of one of the insured’s employees, finding that there is a potential for umbrella coverage under a comprehensive agribusiness policy.
July 01, 2025
Judgment Entered For Insurer In Driving Record ‘Misrepresentation’ Dispute

RALEIGH, N.C. — A North Carolina federal judge on June 30 granted a boat insurer’s motion for judgment on the pleadings, construing it as a summary judgment motion in a coverage dispute, finding that the insurer is entitled to summary judgment due to a policy exclusion and is not bound by the terms of the policy due to the insured’s “material misrepresentation” regarding his driving record.
July 01, 2025
CGL Insurer Disputes Coverage For Suits Arising From Music Festival Shooting

SEATTLE — A commercial general liability insurer filed suit in a Washington federal court seeking a declaration that it has no duty to defend or indemnify its insureds against underlying lawsuits alleging that the insureds’ negligence and failure to exercise due care proximately caused the deaths and injuries from a shooting at a music festival.
June 27, 2025
Judge Refuses To Toss Bad Faith Claim In Coverage Suit Over Antitrust Conspiracy MDL

DENVER — A federal judge in Colorado denied a data liability protection insurer’s motion to dismiss a common-law bad faith claim brought by a multifamily housing lessor insured in its lawsuit seeking coverage for an underlying multidistrict litigation alleging that it was involved in an antitrust conspiracy when it used revenue management software to artificially inflate multifamily housing rents above market across the country.
June 27, 2025
Parties Dismiss 1 Insurer In N.C. Coverage Suit Arising From Opioid Epidemic

WINSTON-SALEM, N.C. — Insureds and one insurer filed a joint stipulation asking a North Carolina court to dismiss the claims and counterclaims between them in a coverage dispute arising from the opioid epidemic.
June 27, 2025
California Judge Denies Insured’s Motion For Summary Adjudication As To UCL Claim

LOS ANGELES — A California judge granted an insured’s motion for summary adjudication as to his declaratory relief claim in a lawsuit alleging that the California Fair Plan Association (CFP) issued property insurance policies with fire coverage that is unlawfully restrictive as to smoke damage claims but denied the insured’s motion as to his unfair competition law (UCL) claim, finding that he failed to satisfy his burden to establish standing to bring the UCL claim.
June 27, 2025
Judge Partly Denies Insurer’s Summary Judgment Motion In Trade Secret Dispute

LAS VEGAS — A federal judge in Nevada granted in part and denied in part an insurer’s motion for summary judgment in a software provider’s lawsuit alleging that the insurer and another software provider misappropriated its trade secrets to develop a clone of its flood claims services system application.
June 27, 2025
Professional Liability Policy Exclusion Applies, Louisiana Majority Rules, Reverses

LAKE CHARLES, La. — A Louisiana appeals panel majority held that a professional liability insurance policy’s bodily injury exclusion unambiguously bars coverage for claims brought against a real estate company insured, reversing a lower court’s summary judgment rulings and remanding.
June 26, 2025
Sub-Broker Wins Dismissal From Insureds’ Negligence Suit Over Warehouse Losses

NEW YORK — In a one-paragraph June 25 order stating that the reasons were “set forth on the record today,” a New York federal judge dismissed a defendant said it “acted as a sub-broker” from a suit seeking $41 million in a dispute involving reinsurance and a warehouse in Afghanistan.
June 26, 2025
Missouri Judge Enters $43.8M Judgment Against Law Enforcement Liability Insurers

JEFFERSON CITY, Mo. — A Missouri judge entered a $43.8 million final judgment against law enforcement liability insurers after a jury determined that the insurers acted in bad faith and vexatiously refused/delayed a claim for coverage of a lawsuit brought against the city of Columbia, Mo., by a man who was convicted and incarcerated for robbery and homicide and later discharged from custody.
June 26, 2025
U.S. High Court Denies Cert In Pennsylvania Underwriting Association Dispute

WASHINGTON, D.C. — The U.S. Supreme Court denied a petition for a writ of certiorari filed by the state-created Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides insurance to health care providers, including those previously insured by insurers in liquidation, seeking review of a Third Circuit U.S. Court of Appeals holding that the JUA does 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.
June 24, 2025
Judge: D&O Coverage Restored By Dilution Claims Exception To Policy Exclusion

SAN DIEGO — A federal judge in California on June 23 held that a business and management indemnity insurer has a duty to defend and indemnify its insured against an underlying unfair dilution lawsuit because the “dilution claims exception” to the “insured vs. insured” exclusion restores directors and officers liability coverage, granting the insured’s motion for summary judgment and denying the insurer’s motion for judgment on the pleadings.