The appellate division of the New York Supreme Court held in Walker v. Erie Insurance Co., 210 A.D.3d 1375, 178 N.Y.S.3d 650 (NY App. Div. 11/10/22) that giving a pedicure fell within the scope of the policy’s professional services exclusion.  The professional services exclusion excluded coverage for “‘bodily injury’ . . . due to . . . [t]he rendering of or failure to render cosmetic . . . services or treatments.”  Under the case facts, the plaintiff contracted an infection from a pedicure.  It was alleged that the infection arose out of the insured’s failure to apply appropriat ..read more

In Central Crude, Inc. v. Liberty Mutual Insurance Co., 51 F.4th 648 (5th Cir. 2022), the Court found that an absolute pollution exclusion precluded coverage for a claim involving the cost of cleaning up an oil spill on the insured’s property when the evidence indicated that the insured might not have been responsible for the leak because a possible source of the leak was natural seepage of oil from the ground. The Court, interpreting Louisiana law, found that the imposition of a fault requirement for application of a total pollution exclusion for environmental pollution cases would run contra ..read more

The New Hampshire Supreme Court in Keene Auto Body, Inc. v. State Farm Mutual Auto Insurance Co., 293 A.3d 1146 (NH 11/15/22) held that an insurance policy’s anti-assignment clause which precluded assignment of any benefits under the policy without State Farm’s approval was ambiguous and, therefore, was to be construed against State Farm.  The Court noted that a reasonable insured would likely understand the reasoning behind the insurer’s prohibition of assignment of policy benefits and rights pre-loss inasmuch as an undesirable assignee could increase the loss by failing to pay premiums ..read more

In BonBeck Parker, LLC v. Travelers Indemnity Co. of America, 14 F.4th 1169 (10th Circ. 2021) the Court held that the Travelers’ policy permitted either party to request an appraisal on “the amount of loss,” which was a phrase with an ordinary meaning in the insurance context that unambiguously encompassed causation disputes. The Circuit Court predicted that the Colorado Supreme Court would recognize that in the insurance context, the phrase “amount of loss” would encompass causation. In doing so, the 10th Circuit rejected Travelers’ argument that the appraisal clause was limited to monetary d ..read more

Under California Civil Code §2860 (hereafter, “§2860”), insureds have a right to obtain independent counsel at the insurer’s expense whenever there are competing interests that create an ethical conflict for the insurer-appointed counsel. Since enactment, the California courts defined the boundaries of §2860. As an example, the California courts have held that not every reservation of rights that is asserted by an insurance company entitles an insured to select cumis counsel. Rather, independent counsel is required only when the outcome of any reserved coverage issue could be controlled by ins ..read more

Standard property policies typically contain an exclusion which provides that the insurer “will not pay for loss or damage caused directly or indirectly by . . . water that backs up or overflows from a sewer, drain, or sump.” A reasonable reading of that language would likely include within the application of the exclusion, damage caused by sewerage that backed up or overflowed from the sewer. Not so fast. Until recently in Ohio, the water-backup exclusion had been found to not include damage caused by sewerage as a result of the backup or overflow. However, in AKC, Inc. v. United Specialty In ..read more

An Oregon District Court in Thompson v. Dennis Widmer Construction, Inc., 2021 WL 5235974 (D. Or., November 10, 2021) limited the insurance company’s ability to access defense counsel’s complete defense file through the tri-partite relationship. The case involved the insurance company failing to settle a lawsuit brought against its insurer because of a lowball settlement offer. The claimants offered to settle the suit against the insured for $250,000, which was then reduced to $198,000. Defense counsel advised the insurance company that the insured faced liability in a range between $190,000 a ..read more

The Kentucky Supreme Court, on first impression, addressed a property exclusion involving damage intentionally caused by an insured whose mental capacity was in question.  See Foreman v. Auto Club Property-Casualty Insurance Co., 617 S.W.3d 345 (Ky. 2021). The Kentucky Supreme Court noted that courts generally hold that intentional-act exclusions do not apply in situations where the insured was suffering from a lack of mental capacity at the time of the act in question.  The insurance policy required the insured’s conduct to be objectively judged.  Nevertheless, the Court held t ..read more

In Savoie v. Enco Insulations, Inc., 322 S.3d 1264 (La. App. 1st Cir. 4/9/21), the Court found that a CGL policy issued to an engineering corporation excluded coverage for executive officers for claims arising from a former employee’s lung cancer that developed after his alleged exposure to asbestos.  The Court found that the CGL policy plainly excluded coverage for the executive officers pursuant to the co-employee exclusions in the policy.  In finding no coverage, the appellate court rejected plaintiff’s assertion that because employees and executive officers were listed separately ..read more

In response to a certified question from a federal district court, the South Carolina Supreme Court held in Butler v. Travelers Home & Marine Insurance Co., 858 S.E.2d 407 (S.C. 2021) that insurance companies were entitled to include depreciation of embedded labor costs in their calculations regarding actual cash value because, according to the Court, it made no sense to do otherwise.  In the abstract, the Court noted that RCV and ACV were simple concepts.  According to the Court, RCV was “simply the amount of money it would take to pay a contractor to repair or replace damaged s ..read more