You would think that a following form excess liability policy simply follows the primary liability policy’s terms and conditions.  That may well be true, but excess policies may contain exclusions or provisions that limit the following requirements under certain conditions.  Recently, the Eleventh Circuit addressed this issue concerning an assault or battery claim. In Starstone National Insurance Co. v. Polynesian Inn, LLC, No. 19-13769 (11th Cir. Jun. 12, 2020) (unpublished), a hotel was sued by the victim of a terrible knife attack.  The hotel had a primary general liability ..read more

The faulty workmanship exclusion precludes coverage where the claimed damage is caused by or resulting from an act, error or omission (negligent or not) that relates to the design, specifications, construction, materials or workmanship.  Can coverage nevertheless be restored by the resulting-loss exception to the exclusion?  The Tenth Circuit recently addressed this question. In Rocky Mountain Prestress, LLC v. Liberty Mutual Fire Insurance Co., No. 19-1169 (10th Cir. Jun. 2, 2020), a subcontractor sought insurance coverage under the property owners’ builders risk policy for the cos ..read more

It is fundamental that a policyholder has to notify its insurance company about a claim if it expects the insurer to defend and indemnify the policyholder against that claim.  When and where that notice has to be given, however, varies.  Sometimes the notice requirement is expressed as a mandatory condition and sometimes the policy wording is more polite.  In a recent non-precedential case, the Fifth Circuit Court of Appeals addressed this issue in a legal malpractice case. In Landmark American Insurance Co. v. Lonergan Law Firm, P.L.L.C., No. 19-10385 (5th Cir. Jun. 4, 2020 ..read more

The question of whether hundreds or even thousands of COVID-19-related losses can be aggregated together as one “loss” or “occurrence” for reinsurance purposes is one that both ceding companies and reinsurers are pondering.  Expressly putting aside whether COVID-19-related business interruption losses are covered by underlying insurance policies (see our other blog posts), this post discusses how both cedents and reinsurers might prepare for the possibility. This question is relevant because many individual COVID-19-related claims may be too small on their own to reach the attachment poi ..read more

There are nearly 400 disputes in the courts about whether loss of business income because of the novel coronavirus is covered by the business income, extra expense and civil authority coverage grants found in many commercial property insurance policies.  Other disputes exist or will arise over different insurance coverage issues stemming from COVID-19.  Additionally, as losses are paid, reinsurance disputes likely will arise.  Considering all of this, I wrote a short article for the ARIAS•U.S. Quarterly suggesting that arbitration can and should play a key role in resolving COV ..read more

Court have always construed the duty to defend more broadly than the duty to indemnify.  That broad construction becomes amplified when coupled with an equally broad construction of the phrase “arising out of” in an insurance policy.  Recently, the Fourth Circuit Court of Appeals found such a broad construction under North Carolina law, leading to a finding of coverage for a false claims act claim as a medical incident. In Affinity Living Group, LLC v. Starstone Specialty Insurance Co., No. 18-2376 (4th Cir. May 26, 2020), a healthcare provider was sued under state and federal false ..read more

Commercial general liability (“CGL”) policies protect the policyholder against property damage caused by an occurrence.  Where the policyholder is sued for breach of contract and related claims because of shoddy design and construction issues, do those claims come within the scope of coverage as an occurrence?  The Eighth Circuit Court of Appeals recently addressed this issue under Missouri law. In American Family Mutual Insurance Co. v. Mid-American Grain Distributors, LLC., Nos. 19-2050, 19-2171 (8th Cir. May 12, 2020), the insured and another party entered into an oral contract f ..read more

In a recent coverage dispute, an Indiana federal court addressed a two-pronged issue.  First, in the case of a multi-tiered ADR clause, who decides whether the dispute should be conducted under the arbitration section of the clause?  Second, where there are several arbitration clauses, who decides which one prevails?  You’ll have to read more to find out. In Atlantic Specialty Insurance Co. v. Anthem, Inc., No. 1:19-cv-03589-JRS-MJD, 2020 U.S. Dist. LEXIS 86677 (S.D. Ind. May 18, 2020),  a coverage dispute arose under a tower of professional liability coverage.  The p ..read more

The Squire Patton Boggs June 2020 Reinsurance Newsletter is now available for your reading pleasure.  You can read the Newsletter on the Squire Patton Boggs website at this link.  In this issue we discuss the Second Circuit’s Utica v. Fireman’s Fund decision, which reversed a judgment for the cedent after a jury verdict.  We also cover many other cases, including various motions to compel arbitration, the enforceability of an arbitration summons under Section 7 of the Federal Arbitration Act and several cases of the discovery of reinsurance information.  We hope you find t ..read more

Directors and Officers (“D&O”) liability policies, like many other liability policies, often have an exclusion that precludes coverage when one insured sues another insured.  Coverage, however, can be restored under certain exceptions.  One of those exceptions is the bankruptcy exception, which allows a bankruptcy trustee or comparable authority to sue on behalf of the estate against another insured like a director or officer.  How that exception works when there is a creditor’s trust formed to pursue legal actions on behalf of unsecured creditors was the subject of a recen ..read more