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

Mealey's Emerging Insurance Disputes

June 23, 2025
Judge Denies D&O, Cyber Liability Insurer’s Motion To Dismiss $2.8M Coverage Suit

OMAHA, Neb. — A federal judge in Nebraska on June 20 denied a directors and officers and cyber liability insurer’s motion to dismiss two private equity firms’ amended complaint seeking coverage for the $2.83 million they lost when an imposter investor hacked a reserve account, finding that the policy’s definition of “loss” is ambiguous.
June 23, 2025
Judge Denies Insured’s Motion For Relief From Judgment In COVID-19 Coverage Suit

ELIZABETH CITY, N.C. —A federal judge in North Carolina denied a hotel and restaurant owner insured’s motion for relief from a March 4, 2021, judgment dismissing its breach of contract and bad faith lawsuit arising from the coronavirus pandemic, rejecting the insured’s argument that the North Carolina Supreme Court’s ruling in N. State Deli, LLC v. Cincinnati Ins. Co. constitutes extraordinary circumstances that warrant relief.
June 20, 2025
Florida Majority: No Coverage Owed For Negligence Suit Arising From Shooting Death

MIAMI — A Florida appellate panel majority affirmed a lower court’s grant of summary judgment in favor of a businessowners insurer in its lawsuit seeking a declaratory judgment that it has no duty to defend or indemnify its homeowners association insured against an underlying negligent maintenance and security lawsuit, agreeing with the lower court that the plain and unambiguous policy terms do not provide coverage for the underlying claims arising from a shooting death in the insured’s development.
June 19, 2025
Colorado Panel Partly Reverses Ruling In Insurer’s Favor In COVID-19 Coverage Suit

DENVER — Noting two matters of first impression, a Colorado appellate court on June 18 reversed in part a lower court’s ruling in favor of an insurer in a retirement communities owner’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic after finding that the insured stated a viable claim to recover some of its alleged losses pursuant to the policy’s health care endorsement.
June 18, 2025
N.M. Panel: Policy Term ‘For A Security Breach’ Is Ambiguous; Coverage Triggered

ALBUQUERQUE, N.M. — A New Mexico appeals court affirmed a lower court’s summary judgment ruling that a cyber insurance policy covered an underlying third-party claim seeking payment for invoices that a now insolvent health insurer mistakenly wired to a fraudulent bank account, finding that the policy term “for a security breach” is ambiguous and must be construed in favor of the insured and the “loss of money” policy exclusions do not apply.
June 18, 2025
English Justice Rules That Aircraft Losses Fall Under War Risk Coverage

LONDON — In a 230-page ruling pertaining to six cases filed over aircraft and engine leases affected by the legal and economic fallout of Russia’s February 2022 invasion of Ukraine, an English justice concluded in part that there were losses worth billions of dollars and that war risk (WR) rather than hull all risks (AR) coverage should apply.
June 18, 2025
Insurer Says No Defense Owed To Company For Underlying Hair Relaxer Lawsuits

ATLANTA — A company that purchased certain assets and liabilities of an insured is not entitled to coverage for underlying lawsuits alleging that hair relaxer products manufactured by the insured and others caused cancer diagnoses in individuals because the insurer did not consent to the transfer of any rights under its policies, the insurer says in a complaint filed in Georgia federal court.
June 17, 2025
Illinois Panel Affirms Ruling In Favor Of Professional Liability Insurer

CHICAGO — An Illinois appeals panel on June 16 affirmed a lower court’s summary judgment ruling in favor of a professional liability insurer in its declaratory judgment lawsuit disputing coverage for an underlying negligence action brought against its doctor insured, finding that the insurer owed no indemnity obligation for the underlying settlement because the doctor insured was not “legally obligated to pay” anything under the settlement terms.
June 17, 2025
3rd Circuit Refuses To Reconsider Refusal To Throw Out BSA Reorganization Plan

PHILADELPHIA — The Third Circuit U.S. Court of Appeals denied two sets of abuse claimants’ petitions to rehear the majority’s dismissal of their appeals seeking to reverse a lower federal court’s confirmation order that affirmed the Boy Scouts of America’s third modified fifth amended Chapter 11 reorganization plan, which contemplates the creation of a settlement trust to “assume liability for all Abuse Claims.”
June 17, 2025
CGL Insurer Removes City’s Coverage Suit Over $9.3M Wrongful Conviction Settlement

DURHAM, N.C. — A commercial general liability insurer filed a notice in a North Carolina federal court seeking removal of the city of Concord’s breach of contract and declaratory judgment lawsuit alleging that the insurer has duty to defend, indemnify and contribute to a $9.3 million settlement of an underlying wrongful conviction lawsuit.
June 16, 2025
Auto Insurer Dismissed From Class Action Complaint Alleging Barratry, Conspiracy

HOUSTON — Two days after insureds filed a notice to voluntary dismiss an automobile insurer from their second amended class action complaint alleging claims for barratry and conspiracy by illegally sharing the personal information of car accident victims for solicitation, a federal judge in Texas dismissed the insurer with prejudice.
June 16, 2025
Supreme Court Denies Auto Insurers’ Petition To Review Class Decertification Dispute

WASHINGTON, D.C. — The U.S. Supreme Court on June 16 denied automobile insurers’ petition for writ of certiorari seeking review of a Ninth Circuit U.S. Court of Appeals majority’s 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.”
June 16, 2025
Mold Exclusion Bars Coverage For Underlying Wrongful Death Suit, Panel Says

TRENTON, N.J. — A trial court erred in finding that a mold exclusion is ambiguous because the exclusion clearly precludes coverage for bodily injury or property damage claims caused directly or indirectly by mold, the New Jersey Superior Court Appellate Division said June 13 in partially reversing a trial court’s ruling.
June 16, 2025
Issue Preclusion Bars Claims Under Renters Insurance Policy, 9th Circuit Affirms

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurer in its insured’s lawsuit seeking renters insurance coverage for an underlying arbitration award, agreeing with the lower court that issue preclusion bars the insured’s claims for declaratory relief, breach of contract and negligence per se.
June 13, 2025
Split Louisiana Panel Reverses Judgment For Insurer In Asbestos Liability Dispute

NEW ORLEANS — A split Louisiana appellate court reversed and remanded a lower court’s ruling granting summary judgment to an insurer and to the Louisiana Insurance Guaranty Association (LIGA) but denying a motion for partial summary judgment filed by family members in a dispute over their deceased relative’s death purportedly from asbestos exposure, finding that issues of fact remain regarding the failure of the insurer and LIGA to show the applicability of a certain policy exclusion to bar coverage.
June 13, 2025
Magistrate Partly Grants Insured’s Motion To Compel In Coronavirus Coverage Suit

NEW YORK — A federal magistrate judge in New York granted in part and denied in part a holding company for the U.S. interests in the Mandarin Oriental Hotel Group’s motion to compel its “all risk” insurers to produce certain documents they have withheld as privileged in a coronavirus coverage dispute, directing the insurers to produce communications with their reinsurers and produce documents containing reserve information unless there is another viable ground for withholding.
June 12, 2025
Class Action Alleges Insurer Intentionally Disclosed Driver’s License Numbers

NEW YORK — A class action complaint for violation of the Driver’s Privacy Protection Act (DPPA) was brought against Lemonade Inc. in a New York federal court on June 9, alleging that the insurer knowingly and intentionally obtained, used and disclosed class members’ driver’s license numbers and other personal information on its online quoting platform that was ultimately accessed by cybercriminals.
June 11, 2025
Vermont High Court: Watercraft Exclusion Bars Coverage For Boating Accident Injury

MONTPELIER, Vt. — The Vermont Supreme Court affirmed a lower court’s grant of summary judgment in favor of a homeowners insurer in its lawsuit seeking a declaratory judgment that it has no duty to defend or indemnify its insureds in an underlying injury lawsuit arising from a boating accident, finding that coverage is barred by the “plain and unambiguous” language of the policy’s watercraft exclusion.
June 11, 2025
Insured Had Knowledge Of Existing Dispute; No Coverage, 6th Circuit Affirms

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on June 10 held that an insured had knowledge of an existing dispute when it signed its professional services liability insurance policy, affirming a lower federal court’s grant of summary judgment in favor of the insurer in a coverage dispute arising from defective design and poor performance claims against the insured.
June 10, 2025
Washington Panel Reverses, Remands UW’s COVID-19 Coverage Suit For Dismissal

SEATTLE — A Washington appeals court panel on June 9 reversed a decision and remanded for a lower court to dismiss the University of Washington’s lawsuit seeking coverage for losses incurred at its medical and athletic properties due to the COVID-19 pandemic, relying on the recent ruling in Tulalip Tribes of Washington v. Lexington Insurance Co. to reject the insured’s argument as to its entitlement to coverage.
June 10, 2025
3rd Circuit Affirms Ruling In Favor Of Insurer In Coronavirus Coverage Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on June 9 affirmed a lower federal court’s ruling in favor of an insurer in coronavirus coverage disputes that were consolidated on appeal, ruling that under New Jersey law, insurance policies that insure “physical loss or damage” do not cover financial losses that were imposed by mandates in response to the coronavirus pandemic.
June 09, 2025
5th Circuit Affirms Dismissal Of Claims, Vacates Sanction Order In Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of an insured’s breach of contract and bad faith claims in a homeowners insurance coverage dispute arising from a Texas city’s demolition of a building and vacated the lower court’s denial of the insurer’s second motion for sanctions.
June 06, 2025
Federal Judge: District Court Does Not Have Jurisdiction To Enforce Remand Order

BAY CITY, Mich. — A motion to enforce a remand order filed by a group of farmers was denied in a Michigan federal court in a crop insurance dispute involving a dry-bean revenue endorsement (DBRE), after the judge ruled that the court did not retain jurisdiction when the litigation was remanded and said that the farmers must file a new case under Administrative Procedures Act (APA) to continue proceedings.
June 06, 2025
Motion To Compel Partially Granted In Coverage Dispute With Debris Removal Company

NEW YORK — Agreeing with an insured debris removal company and its principal that an insurer’s discovery request covering a 10-year period is “overly broad,” a New York federal judge partially granted the motion to compel discovery in an insurer’s suit seeking to rescind two insurance policies for purported fraudulent misrepresentations in insurance applications, granting discovery limited to one year before the initial policy application and until the end of the last policy renewal period.
June 05, 2025
Delaware Judge Rules On Reserved Issues In Product Liability Coverage Dispute

WILMINGTON, Del. — A Delaware judge resolved issues that were reserved after determining that underlying product 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, finding that fact issues preclude summary judgment on most of the reserved issues.