Court Finds That Insurer’s Duty to Defend is Not Cut Off by Judicial Admission by Insured

An insured’s admission in an answer to a declaratory judgment complaint dispositive of coverage was not considered by the Middle District of Pennsylvania. Instead, the court looked only to the allegations in the underlying complaint and held that an insurer had a duty to defend its insured.

The insured was sued in an underlying bodily injury lawsuit arising from a motor vehicle accident. In the complaint against the insured, the underlying plaintiff alleged that the vehicle driven by the insured’s employee was an auto covered …

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Insurance Coverage Considerations Stemming from the New California Child Victims Act

On October 13, 2019, when California’s governor signed AB 218—the California Child Victims Act (CCVA)—California became one of at least nine other states to enact some form of window legislation for childhood victims of sexual assault. The CCVA became effective on Jan. 1, 2020. This article explores the CCVA’s pertinent changes to existing law for pursuing childhood sexual assault claims, as well as some of the key insurance coverage issues arising from this new law.

The text of the CCVA is substantively similar to other …

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Application Sinks Insured’s Claims Against Agent Over Hole-In-One Coverage

Key Takeaways:

  • Extends the “duty to read” principle typically applied to insurance policies to applications submitted by insureds for such policies
  • Reasonable expectations doctrine only applies when the terms of the policy itself are ambiguous

After losing an extended coverage battle with its insurer that ultimately resulted in a finding of no coverage by the Fourth Circuit, the insured in Old White Charities, Inc. v. Bankers Ins., LLC, No. 18-1914, 2020 WL 290664 (4th Cir. Jan. 21, 2020) took aim at its insurance agent, asserting claims of …

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Ohio Supreme Court Holds Insurers Not Responsible for Charging Liens

The Ohio Supreme Court held that an insurer who settles a personal injury claim with an accident victim has no duty to issue payment directly to the victim’s former lawyer pursuant to a charging lien.[1]

In the underlying personal injury matter, an automobile accident victim hired a law firm to represent him. The victim and his law firm entered into a contract that granted the law firm a charging lien on the proceeds of any insurance payment, settlement, judgment, or verdict that might be …

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Texas Supreme Court Hears Argument on Whether to Adopt Exception to Eight-Corner Rule

At oral argument in the case of State Farm Lloyds v. Janet Richards,[1] the Texas Supreme Court heard from both sides on whether or not Texas courts should recognize a policy-language based exception to the eight-corners rule, applied when evaluating whether an insurer can introduce extrinsic evidence to contest its duty to defend the insured for a third-party liability claim. The so-called eight-corners rule allows a court to refer only to the relevant policy terms and factual allegations in the complaint against the …

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NY Appellate Court Confirms an Absence of Negligence is no Roadblock to AI Coverage

New York’s Appellate Division, First Department, handed insurers a lump of coal this holiday season, unanimously holding that a contractor’s insurance company (Insurer) owed a property owner and manager (Building Defendants) primary coverage as additional insureds, even though its named insured had nothing to do with the allegedly negligent acts giving rise to the subject injury, and despite the named insured previously prevailing against the Building Defendants’ claims for common law and contractual indemnification. As the First Department panel concluded, because the additional insured clause …

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Failure to Issue a Reservation of Rights, and to Address an Insured’s Affirmative Defenses in a Coverage Dispute, May Preclude Denial of an Otherwise Excluded Claim

A recent Florida state court opinion emphasizes the importance of an insurer’s obligations in the event of a liability claim against an insured and a subsequent coverage dispute with that insured.

In Hurchalla v. Homeowners Choice Property & Casualty Insurance Company, the insured was sued for tortious interference with business contracts. Although her liability policy did not insure against intentional acts, the insurer initially provided the insured with a defense. However, the insurer neglected to inform the insured that the defense was being provided …

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Depositing Policy Limits Does Not End the Duty to Defend

An Oregon federal court revisited a common coverage question that comes up from time to time: When indemnity for a loss is reasonably clear, can an insurer limit its defense expense exposure by simply depositing the policy limits with the court? The answer, according to this court, and most other courts around the country, is no.[1]

The liability policy in U.S. Fire Ins. V. Mother Earth School contained the commonly-found insuring agreement language which provides, in relevant part, that an insurer’s right and duty …

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Insurers Be Ready: New Jersey’s Two-Year Window Reviving Time-Barred Sex Abuse Suits is Open

On December 1, 2019, the two-year look-back period created by New Jersey Senate Measure S477 went into effect, reviving claims of sexual abuse that would otherwise be barred under the statute of limitations.

In March 2019, S477 passed in the New Jersey State Senate by a vote of 32 to 1, followed by passage in the New Jersey State Assembly by a vote of 71-0, with five abstentions. The bill was signed into law by New Jersey Gov. Phil Murphy on May 13, 2019.

One …

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Venue Matters: Evaluating the Applicable Standard for Bad Faith Claims in New York

The insurance market has a strong interest in minimizing extra-contractual claims against it. These issues are often decided summarily at the pre-answer motion to dismiss stage or after discovery on summary judgment. Notably, however, since 2018, New York courts have articulated varying standards in evaluating a policyholder’s claim for breach of the implied covenant of good faith seeking consequential damages against its insurer in the context of these motions.

Insurers have traditionally defended themselves against these extra-contractual claims by advancing two main arguments:

  1. They are
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