Massachusetts Appeals Court Reverses Insurer’s Win on “Your Work” Exclusion
Latest from Commercial General Liability Dispatch
Middle District of Pennsylvania Holds General Allegations of Infringement Constitute “Real” Advertisement
In Hershey Creamery Co. v. Liberty Mutual Fire Ins. Co., No. 1:18-CV-694, 2019 WL 1988397 (M.D. Pa. May 6, 2019), the United States District Court for the Middle District of Pennsylvania held a patent and trademark infringement lawsuit against an insured triggered a duty to defend under “personal and advertising injury” coverage. The dispositive issue was whether the complaint, which was premised on alleged infringement on the plaintiff’s marks in the insured’s in-store signage and milkshake containers, potentially alleged an “advertisement,” which was defined to mean, in relevant part, “a paid announcement that is broadcast or published in the print,…
Duty to Defend Under Additional Insured Coverage Where Plaintiff’s Employer or Named Insured Not Named in Underlying Complaint
Numerous Illinois cases have considered the question of when an insurer must defend or indemnify an additional insured. E.g., Pekin Ins. Co. v. Centex Homes, 2017 IL App (1st) 153601; National Union Fire Ins. Co. of Pittsburgh, PA. v. R. Olson Constr. Conts., Inc., 329 Ill.App.3d 228 (2d Dist. 2002); Commonwealth Edison Co. v. National Union Fire Ins. Co. of Pittsburgh, PA., 323 Ill.App.3d 970 (1st Dist. 2001). In most additional insured coverage cases, two factors are critical to the outcome. The first is the wording of the additional insured endorsement, and the second is the extent to which facts outside the…
Under Illinois Law, Insurer Cannot Control Defense If It Reserves Its Rights Under Punitive Damage Exclusion and Punitive Damages Form Substantial Portion of Liability
The Illinois Appellate Court for the First District ruled that an insured was entitled to independent counsel where its insurer was reserving rights based on a punitive damages exclusion and the claim for punitive damages was the greatest part of the insured’s exposure. In Xtreme Protection Services LLC v. Steadfast Ins. Co., 2019 IL App (1st) 181501 (Ill. App. Ct. May 3, 2019), the underlying case involved a suit against Xtreme Protection Services LLC for illegal wiretapping and sending threatening or harassing text messages. Plaintiff’s claim against Xtreme in the underlying case sought $800,000 in compensatory damages (within Steadfast’s $1…
Court Finds Exclusion for Injuries to Insured’s Subcontractor Employees Is Unambiguous
In Evanston Ins. Co. v. A&R Homes Development, LLC, 2019 WL 661587 (N.J. Super. App. Div. Feb. 19, 2019), the Appellate Division of the Superior Court of New Jersey affirmed a trial court ruling that an exclusion for an insured’s liability to employees of its contractors or subcontractors was unambiguous and barred coverage. The case is significant on several fronts. First, it reaffirms New Jersey law that where an injured party has been made a party to a coverage action against an insured/defendant and elects not to intervene in a carrier’s efforts to disclaim coverage, the injured party will be…
Wisconsin Supreme Court Apportions Defense Costs Pro Rata Based On Policy Limits
In Steadfast Ins. Co. v. Greenwich Ins. Co, 2019 WI 6 (2019), the Wisconsin Supreme Court ruled that an insurer that breached its duty to defend did not have to repay the full $1,550,000 that another insurer expended in defending the insured. Instead, the court apportioned the defense costs among the two insurers on a pro rata basis according to each insurer’s policy limits.The court declined to hold that the insurer who breached its duty to defend was responsible for the entire amount as a penalty, but did hold that the defending insurer was entitled to recover its attorney fees…
Idaho Court Expands on the Prior Publication Exclusion to Coverage
With social media use on the rise, insurers and insureds alike should be mindful of posts that can implicate the prior publication exclusion to coverage. In Scout, LLC v. Truck Ins. Exchange, 2019 WL 347471 — P.3d —- (Idaho Jan. 29, 2019), the Idaho Supreme Court addressed this issue in a trademark infringement case that began with what seemed like a simple Facebook post.
Scout involved an Idaho LLC that purchased and renovated a downtown restaurant in Boise, turned it into a pub and began using the brand name Gone Rogue Pub. On October 10, 2012 Scout shared a public…
Federal Jurisdiction for Coverage Claims Involving Class Actions and Required Notice of Policy Changes in Missouri
In American Family Mutual Ins. Co. v. Vein Centers for Excellence, Inc., 912 F.3d 1076 (8th Cir. 2018), the Eighth Circuit considered two questions. The first was whether the claims against an insured in an underlying class action suit could be aggregated to satisfy the $75,000 jurisdictional minimum for federal diversity jurisdiction of the coverage suit. The second was whether the endorsement American Family added to the policy restricting coverage for TCPA claims and other statutory violation claims was valid, and whether American Family complied with Missouri notice requirements for making substantive changes to policies.
St. Louis Heart Center,…
Nevada Supreme Court Allows Consequential Damages for Breach of Duty to Defend Even in the Absence of Bad Faith
In Century Sur. Co. v. Andrew, 134 Nev.Adv.Op 100, No. 73756 (December 12, 2018), the Nevada Supreme Court, answering a certified question submitted by the United States District Court for the District of Nevada, held an insurer who breaches the duty to defend can be held liable for the entirety of a judgment in excess of policy limits, even if the insurer acted in good faith when it denied the defense. It also concluded, following the new Restatement of Liability Insurance, that an insurer may not rely upon extrinsic evidence to refuse to defend an insured, but if an…
Advertising Injury and New York’s Broad Duty to Defend
In High Point Design, LLC v. LM Ins. Corp., No. 16-1446-CV, 2018 WL 6625763 (2d Cir. Dec. 19, 2018) (New York law), the Second Circuit held that an advertising injury was alleged even if the underlying complaint, standing alone, did not trigger the duty to defend where the underlying discovery demands sought information related to paid advertisements placed High Point’s advertising directly at issue. The case is significant as it reaffirms New York law, in the context of claim for insurance coverage for advertising injuries, that an insurer’s duty to defend does not turn solely on the language of the…
Court Holds Aircraft Exclusion to Bodily Injury Also Extends to Drones
While you’re looking at airplanes fly by, you may also want to look for drones too. In a recent decision by the United States District Court in the Central District of California, the court found drones are equivalent to aircrafts, at least as it applies to the aircraft exclusion to bodily injury. Philadelphia Indemnity Insurance Company v. Hollycall Productions, Inc. et al, 2018 WL 6520412 (C.D. Cal. Dec. 7, 2018) (“Hollycall”). This decision serves as a reminder that even when technological advances come into play, the courts will always consider the plain meaning of the words in the policy to…
CGL Dispatch Year In Review 2018
The holidays are a great time for reflection, and in that spirit, we here at the CGL Dispatch Blog would like to take a brief look back at some 2018 cases in which high courts addressed commercial general liability insurance coverage issues.
Kentucky and Ohio Supreme Courts Hold Faulty Workmanship Is Not An “Occurrence”
Early this year, Tressler published a 50-State Survey addressing whether claims for faulty workmanship qualify as an “occurrence” under commercial general liability insurance policies. Does Faulty Workmanship Constitute An “Occurrence”? In 2018, two high courts weighed in on the issue. In Martin/Elias Properties, LLC v. Acuity, …