Sarah J. Delaney, Author at The Insurance & Reinsurance Report

April 22, 2015 Professional Liability

No Coverage for Financial Firm that Invested Clients’ Money in Ponzi Scheme

A securities firm sought coverage under a professional liability policy for claims by customers that suffered losses on real estate investment vehicles. The Panel for the Second Appellate District in California found that the policyholder was not entitled to coverage because the “application exclusion” in the firm’s policy bars coverage for the claims asserted, as the policyholder did not disclose the facts of the claims against it to the insurer in its application.

The claimants brought suit, asserting that the policyholder failed to properly vet …

April 14, 2015 CaseWatch

The Latest Insurance Law Decisions – Goldberg Segalla’s CaseWatch: Insurance is Now Available

Please click here for the latest edition of CaseWatch Insurance.

CaseWatch: Insurance provides timely summaries of and access to insurance law decisions and legislation. For ease of reference, we have organized cases by topic.

If you would like to receive future editions of CaseWatch: Insurance directly by email, please contact Sarah Delaney at [email protected].

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April 14, 2015 Uncategorized

No Business Loss Coverage for Sandy Flooding

A Southern District Court judge ruled that an insurer was not required to pay lost business coverage after Superstorm Sandy due to a flood provision contained in the policy. In this case, a law firm sought coverage from its insurer when its lower Manhattan office was evacuated due to flooding from the Sandy Storm.

The insured law firm sought coverage under the policy’s civil authority provision and moved for summary judgment while the insurer cross moved for summary judgment because flood was not a covered …

March 31, 2015 Environmental

Where There is Fire, There is Smoke

In Hobson v. Indian Harbor Insurance Co., No. 316714, 2015 WL 1069242 (Mich. Ct. App. Mar. 10, 2015), the appellate court in Michigan rejected the insurers’ interpretation of the pollution exclusion in the landlord’s commercial general liability (“CGL”) insurance policy to deny the tenants’ bodily injury claim.

The dispute arose when the plaintiffs sustained bodily injuries from a fire that broke out in the apartment building where they resided. Subsequently, the plaintiffs sued the landlord and its insurers, alleging that the fire was caused …

March 13, 2015 Uncategorized

Structural Damage Doesn’t Mean Any Damage to Structure

In Hegel v. First Liberty Insurance Corp., No. 14-10549, 2015 WL 821146 (11th Cir. Feb. 27, 2015), the Eleventh Circuit reversed the district court’s grant of summary judgment for the policyholder, finding that “structural damage” does not mean any “damage to the structure.”

The coverage dispute arose when the insurer First Liberty Insurance Corp. (“First Liberty”) denied the policyholders’ claim for a “sinkhole loss” which their homeowner’s insurance policy defined as “structural damage to the building, including the foundation, caused by sinkhole …

February 24, 2015 Uncategorized

Law Firm’s Policy Rescinded For Misrepresentation in Application

The Supreme Court of Illinois held that the insurer was entitled to rescind a law firm’s malpractice policy based on material misrepresentations in the firm’s renewal application. The main issue in this case was whether the policy could be rescinded despite one of the firm’s attorneys being unaware of the misrepresentation.

The appellate court had ruled that, under the innocent insured doctrine, the insurer was required to maintain coverage for the innocent partner despite the misrepresentation on the application when renewing the policy. This court …

February 12, 2015 Uncategorized

Kmart Corporation v. Footstar, Inc.

U.S. App. LEXIS 1775 (7th Cir. February 4, 2015)

Insurer’s Duty to Indemnify Limited to Insured’s Agreed Upon “Work” and Did Not Apply to Liability Arising from Actions of the Insured Outside Scope of “Work” and In Breach of the Agreement

In Kmart Corporation v. Footstar, Inc., Nos. 14-1242, 14-1356, 14-1359, 2015 U.S. App. LEXIS 1775 (7th Cir. Feb. 4, 2015), the Seventh Circuit reversed the district court’s finding that Footstar, Inc. (“Footstar”) and its insurer Liberty Mutual Fire Insurance (“Liberty Mutual”) had a …

February 5, 2015 Life, Health, Disability & ERISA

Abuse of Discretion Where Insurer Failed to Consider “Similar Income” Requirement

George v. Reliance Std. Life Ins. Co.
5th Cir., Jan. 15, 2015

In the appeal of an ERISA disability benefits denial, the Fifth Circuit found an abuse of discretion where the insurer failed to consider the “similar income” provision. The insurer had found in its investigation that the claimant was not totally disabled under the policy as there were sedentary jobs for which the insured was able to perform. What the court found lacking, was any discussion of whether the sedentary jobs the insurer found …

December 8, 2014 Life, Health, Disability & ERISA

U.S. GAO Study Analyzes Market Share Among Health Care Enrollees

The Patient Protection and Affordable Care Act (PPACA) requires the GAO to study competition and market concentration in the health insurance market. This study examined the individual, small group, and large group health insurance markets prior to the implementation of key PPACA provisions that went into effect in 2014 and that could have an effect on competition and market concentration among health insurers.

The study found that while several insurers participated in each state’s individual, small group, and large group health insurance markets in 2013, …

December 3, 2014 Uncategorized

Judge Throws Out Yacht Club’s Hurricane Sandy Suit: Insurer Must Be Allowed to Inspect “Damaged” Property

A District of New Jersey Federal Judge dismissed a yacht club’s case with prejudice and ordered the yacht club to show cause for why its counsel should not be sanctioned for filing a baseless claim after the yacht club refused to let the insurer inspect its property after making a claim.

The Judge stated that the yacht club refused to let the insurer inspect its property, yet claimed $540,000 worth of wind damage to its buildings from Superstorm Sandy. After the initial claim was made, …