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Mealey's Insurance

June 25, 2024
Policy Exclusions Do Not Bar Coverage For Decomposing Body, Ohio Judge Says

CANTON, Ohio — An Ohio judge found that coverage is owed for damages to a rental property caused by a decomposing human body because the policies’ pollution exclusion, virus exclusion and infestation exclusion do not clearly bar coverage for the insureds’ property damage claim.
June 24, 2024
District Court’s Collapse Ruling Must Be Reversed, Contractor Tells 6th Circuit

CINCINNATI — A federal judge erred in finding that no coverage is owed for a structurally unsound wall that remained standing after a portion of the wall collapsed during a building renovation because the lower court failed to apply Tennessee law in construing the meaning of the term collapse in the insurer’s policy, a building contractor says in its June 21 appellant brief filed in the Sixth Circuit U.S. Court of Appeals.
June 24, 2024
Water Exclusion Bars Coverage For Water Damages In Insureds’ Basement, Panel Says

NEW ORLEANS — A federal district court properly entered summary judgment in favor of a homeowners insurer on breach of contract and bad faith claims because coverage for water damages to the insureds’ basement is excluded pursuant to a water exclusion in the homeowners’ policy, the Fifth Circuit U.S. Court of Appeals said.
June 20, 2024
6th Circuit Appeal Filed Over Reinsurer’s Collateral Estoppel Win In Defense Row

CINCINNATI — A defense costs dispute concerning asbestos lawsuits and prior arbitration is going to the Sixth Circuit U.S. Court of Appeals, with an insurer filing a notice of appeal regarding a Michigan federal judge’s ruling that collateral estoppel applies.
June 19, 2024
California High Court Reverses, Says Vertical Exhaustion Applies To Policies

SAN FRANCISCO — The California Supreme Court reversed an appeals court’s ruling in a long-running asbestos insurance coverage dispute after determining that a vertical exhaustion method, rather than a horizontal exhaustion method, must be applied to excess policies that sit over an insured’s primary policies because the language of the excess policies and the insured’s reasonable expectations support a vertical exhaustion method.
June 19, 2024
Illinois Panel Says No Coverage Owed For Carbon Monoxide Suits Filed Against Insured

SPRINGFIELD, Ill. — No coverage is owed for underlying personal injury lawsuits stemming from a carbon monoxide leak because the underlying allegations involve the insured’s rendering of professional services, the Fourth District Illinois Appellate Court said June 18 in finding that the policies’ professional services exclusion bars coverage.
June 18, 2024
Insurer Says No Coverage Owed For Suit Stemming From Insured’s Fertilizer Plant

TYLER, Texas — An insurer filed suit in Texas federal court against its insured, seeking a declaration that it has no duty to defend or indemnify its insured for an underlying suit arising out of the insured’s operation of a fertilizer plant because the insured failed to timely notify the insurer of the suit and because the policies’ pollution exclusion bars coverage.
June 18, 2024
Insured Building Owner Says Lower Court Misinterpreted Policy’s Collapse Language

CINCINNATI — The Sixth Circuit U.S. Court of Appeal must reverse a district court’s ruling entered in favor of an insurer because the lower court failed to properly interpret and apply the language of the policy regarding the coverage afforded for the collapse of a wall, an insured building owner says in its June 17 appellant brief.
June 18, 2024
Insurer Urges N.Y. Federal Judge To Allow Interlocutory Appeal To 2nd Circuit

NEW YORK — A commercial lines insurer reiterates in a reply brief filed in New York federal court that an interlocutory appeal of a New York federal judge’s ruling to the Second Circuit U.S. Court of Appeals is warranted because the issue of whether a communicable disease exclusion bars coverage for three underlying lawsuits alleging that residents of the insured properties contracted Legionnaires’ disease presents a controlling question of law and an immediate appeal could result in the dismissal of all the claims.
June 13, 2024
Magistrate: Defendant CGL Insurer Owes Defense For Negligence Suit Against Insured

FRESNO, Calif. — A federal magistrate judge in California held that underlying allegations that an insured negligently conducted cyclic steaming operations constitute an “occurrence” under a defendant commercial general liability insurer’s policy, granting the plaintiff CGL insurer’s joint motion for summary judgment as to the defendant insurer’s duty to defend against an underlying lawsuit brought against their mutual insured.
June 13, 2024
Dismissal Of Bad Faith Claim Denied In Estate Row With Insurer Over ‘Total Loss’

SCRANTON, Pa. — A Pennsylvania federal judge on June 12 denied a homeowners insurer’s motion to dismiss a bad faith claim in a suit filed against it by the estate of a woman alleging that the insurer’s failure to pay a claim for water damage resulted in the property being “a total loss,” finding dismissal inappropriate at this point in the litigation.
June 13, 2024
Failure To Timely Submit Proof-Of-Loss Forms Is Fatal To Insured’s Bad Faith Suit

WHITE PLAINS, N.Y. — A New York federal judge granted a homeowners insurer’s motion for summary judgment after determining that the insured’s breach of contract and bad faith suit cannot proceed because the insured failed to submit proof-of-loss statements regarding the water damage in his home within 60 days as required by the policy.
June 11, 2024
Insurer Ordered To Produce Documents Related To Occupational Disease Claims

PITTSBURGH — A Pennsylvania federal judge ordered an insurer to produce claims manuals, guidelines and policies related to the insurer’s evaluation of occupational disease and employer liability claims because the documents, requested by the insured, are relevant to the insurer’s handling of the insured’s claim for coverage for an underlying asbestos bodily injury claim.
June 11, 2024
Environmental Contamination Coverage Suit Transferred From Alabama To Georgia

BIRMINGHAM, Ala. — An environmental contamination coverage suit filed by a number of insurers against their insured must be transferred to Georgia federal court because almost all of the events giving rise to the contamination at issue occurred in Georgia and the plaintiff insurers will not be inconvenienced by the transfer, an Alabama federal judge said in granting the insured’s motion to transfer to the suit to Georgia federal court.
June 10, 2024
Insureds Urge 8th Circuit To Find Pollution Exclusion Does Not Bar Coverage

ST. LOUIS — A pollution exclusion does not bar coverage for an underlying bodily injury claim stemming from carbon monoxide exposure because the pollution exclusion applies only to traditional environmental pollution claims, the insureds claim in their appellant reply brief filed in the Eighth Circuit U.S. Court of Appeals.
June 10, 2024
Coverage Excluded For Child’s Injury Caused By Chemical In Mints, Insurer Says

ST. LOUIS — No coverage is owed to insureds for an underlying suit seeking damages caused by a child’s ingestion of liquid breath mints that contained a chemical that damaged the child’s esophagus because the policy’s pollution exclusion applies as a bar to coverage, an insurer says in a complaint filed in Missouri federal court.
June 10, 2024
Indiana Federal Court Lacks Personal Jurisdiction Over Insurers In CERCLA Case

SOUTH BEND, Ind. — Due to a lack of personal jurisdiction, an Indiana federal judge denied a motion to bar contribution claims under the Comprehensive Environmental Response, Compensation, and Liability Act against a group of insurance companies that allegedly sold policies to a company that polluted an industrial site with hazardous substances because there is no case or controversy involving the insurers.
June 10, 2024
Choice-Of-Law Ruling In Environmental Coverage Dispute Certified For Appeal

EAST ST. LOUIS, Ill. — An Illinois federal judge granted a motion to certify a choice-of-law ruling for interlocutory appeal to the Seventh Circuit U.S. Court of Appeals after determining that resolution of the issue could help to advance litigation of the environmental contamination coverage suit.
June 06, 2024
Supreme Court Reverses, Says Asbestos Debtor’s Insurer Can Challenge Reorganization

WASHINGTON, D.C. — Because the primary insurer of Chapter 11 asbestos debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. is on the hook for most of the debtors’ asbestos liabilities under their reorganization plan, it is a party in interest that has standing to object to the plan, the U.S. Supreme Court held June 6 in a unanimous decision.
June 05, 2024
Coblentz Settlement Cannot Be Enforced Against Excess Insurers, 11th Circuit Affirms

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of excess insurers in an insured’s lawsuit seeking to enforce a Coblentz v. Am.Sur. Co. of N.Y. settlement agreement arising from an underlying negligence action, finding that the excess insurers did not breach their duty to defend because they offered to defend under a reservation of rights.
June 04, 2024
Civil Conspiracy Claim In Mold Coverage Suit Cannot Proceed, Magistrate Judge Says

CHICAGO — An Illinois federal magistrate judge dismissed a civil conspiracy claim alleged by insureds against their homeowners insurer and the insurer’s preferred mold remediation company after determining that the insureds failed to show that there was any agreement between the insurer and the mold remediation company.
June 04, 2024
Wisconsin Federal Judge Agrees With Insurers On Occurrence Limits Issue

GREEN BAY, Wis. — A Wisconsin federal judge partially granted summary judgment in favor of two insurers in an environmental contamination dispute on the issue of the policies’ occurrence limits, determining that based on the applicable policies’ language, one insurer’s liability is limited to $5 million for each of its three policy periods and the other insurer’s liability is limited to $5 million over the entire three-year period during which its policy was in effect.
May 31, 2024
Professional Services Exclusion Bars Coverage For Carbon Monoxide Injury Suits

SPRINGFIELD, Ill. — A trial court did not err in finding that no coverage is owed for underlying personal injury lawsuits stemming from a carbon monoxide leak because the underlying allegations involve the insured’s rendering of professional services and are therefore barred from coverage by the policies’ professional services exclusion, the Fourth District Illinois Appellate Court said in affirming the trial court’s ruling.
May 30, 2024
Insurers Owe No Coverage For Underlying Judgments In Asbestos Exposure Suits

SAN FRANCISCO — A trial court properly found that two insurers owe no coverage for underlying judgments totaling $41 million entered against their insured in underlying lawsuits arising out of a claimant’s exposure to asbestos in the insured’s products because the policies’ auto exclusions apply as a bar to coverage based on the fact that the claimant was exposed to the asbestos while unloading the insured’s product from the insured’s delivery van, the First District California Court of Appeal said.
May 29, 2024
11th Circuit Says Pollution Exclusion Bars Coverage For Generator Emissions Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals on May 28 affirmed a district court’s ruling that an insurer owes no coverage for underlying suits filed by residents of a condominium building who claim that they were injured as a result of fumes exhausted from a backup power generator, agreeing with the lower court’s conclusion that the policies’ pollution exclusions bar coverage for the generator, which was stored in a utility closet that was occupied or owned by the insured.