Proof’s in the Pudding: Sexual Misconduct Exclusions Do Not Preclude Coverage for Defamation Claims, Massachusetts Federal District Court Says

A federal district court in Massachusetts determined that Bill Cosby’s insurer has a duty to defend the former entertainment icon in three defamation suits despite potentially applicable policy exclusions because the defamation claims did not necessarily “aris[e] out of” sexual misconduct.

In AIG Property Casualty Co. v. Green, Civil Action No. 15-30111-MGM, 2016 U.S. Dist. LEXIS 154881 (D. Mass. Nov. 8, 2016), the court dismissed an insurer’s attempt to obtain a determination that it had no duty to defend Cosby, finding that the underlying …

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Don’t Skip Steps When Analyzing the Foundation for a Covered Claim: No Publication and No Use of Advertising Ideas Means No Duty to Defend Beauty School Dispute

Desabato v. Assurance Co. of America et al., No. 2:15-cv-484, 2016 U.S. Dist. LEXIS 135389 (W.D. Pa. Sept. 30, 2016) represents a continuation of Pennsylvania law in the context of an insurer’s duty to defend personal and advertising injury claims. As articulated in Desabato, Pennsylvania adheres to a strict four-corners analysis of an insurer’s duty to defend. Since the underlying complaint failed to allege the elements of defamation or misappropriation of advertising ideas, the court held Assurance Company of America, Northern Insurance Company …

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No, No, No: No Accident, No Property Damage, No Duty to Defend Under Illinois Law

Westfield Insurance Co. v. West Van Buren, LLC, et al., 2016 IL App (1st) 140862 represents a continuation of Illinois law in the context of an insurer’s duty to defend construction defect claims. As articulated in Westfield, accidental events are required to trigger a duty to defend and shoddy workmanship does not constitute property damage. In addition, since the underlying complaint did not seek damages for any personal property damage, the Illinois Appellate Court held Westfield Insurance Company had no duty to defend …

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Seventh Circuit Dispatches Insurer’s Coverage Defenses Against Ambulance Company

The Seventh Circuit affirmed a district court’s summary judgment in favor of an insured, finding that the insured may qualify as being in a “joint venture” with the named insured. In American Alternative Insurance Corp. v. Metro Paramedic Services, Inc. (Jul. 12, 2016), the issue confronting the court was whether allegations in the underlying complaint that the named insured and putative insured were engaged in a joint venture also satisfied the policy’s use of the term “joint venture,” at least for purposes of the insurer’s …

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The Irony of Not Fixing What Isn’t Broken: Wisconsin Supreme Court Refuses to Consider Extrinsic Evidence of Subcontractors’ Involvement in Replacement of Damaged Well Pump

Bootstrapping upon its decision in Marks v. Houston Casualty Co., 2016 WI 53, the Wisconsin Supreme Court in Water Well Solutions Service Group Inc. v. Consolidated Insurance Co., 2016 WI 54, affirmed summary judgment in favor of the insurer. The Supreme Court concluded, based upon a four-corners analysis, that the policy’s “your product” exclusion barred coverage entirely for the underlying lawsuit. The Supreme Court further rejected the insured’s invitation to recognize an exception to the four-corners rule to allow courts to examine extrinsic …

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Illinois Appellate Court Rejects Coverage for Junk Fax Class Action Settlement and Calls TCPA Class Action Attorneys to Task

The Illinois Appellate Court recently offered greater protection to insurance companies from liability emanating from the Telephone Consumer Protection Act of 1991 (TCPA) and fervently condemned the reality of class action settlements rewarding only class counsel. In First Mercury Insurance Co. v. Nationwide Security Services., 2016 IL App (1st) 143924 (May 18, 2016), the Appellate Court affirmed the trial court’s judgment that First Mercury had no duty to indemnify the class (as assignees) with respect to a settlement reached in the underlying junk fax …

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EPA Inquiries Under CERCLA Trigger the Duty to Defend . . . To The End

The Ninth Circuit Court of Appeals ruled that the unique liability regime of CERCLA qualifies a request for information under the statutory scheme as a “suit” within the meaning of general liability insurance policies, thereby triggering an insurer’s duty to defend its insured. The court also held that this duty to defend continues until the EPA issues its final Record of Decision.

The insured cement company ran two of its cement plants on an Oregon Superfund Site. In 2008, the EPA sent a letter to …

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Third-Party Complaints and the Duty to Defend – Another Decision Cementing Existing Precedent

In Pekin Insurance Company v. Illinois Cement Company, LLC, the Illinois Appellate Court again addressed the important issue of when third-party complaints can be used in evaluating an insurer’s duty to defend. Due to the circumstances surrounding the third-party complaint in question, the Appellate Court held that it was self-serving and could not be used to show that a putative additional insured was vicariously liable for the acts of the insured.

The facts underlying the coverage dispute involve an action brought by Michael Hanson …

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Up in Smoke: An Insurer Could Not Mount a Successful Coverage Defense Due to Vague Allegations in an E-Cigarette Lawsuit

An Illinois federal district court determined in Diamond State Insurance Company v. Duke that an insurer had a duty to defend its insured in a case involving alleged disparagement. This decision reminds insurers that courts have the ability to the allegations of the underlying complaint even more broadly than ever expected.

The underlying lawsuit was brought by, in pertinent part, DR Distributors, LLC against 21 Century Smoking, Inc. alleging, causes of action for counterfeiting and trademark infringement under the Lanham Act, unfair competition and unfair …

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Insurers May Need a Doctor’s Note: Data Breach of Medical Records Triggers Coverage, Says Fourth Circuit

On Monday, April 11, 2016, the Fourth Circuit handed down a notable, albeit unpublished, decision with regard to an issue that has vexed the insurance industry, namely, do data breaches trigger a CGL insurer’s duty to defend under Coverage B? In Travelers Indemnity Company of America v. Portal Healthcare Solutions, L.L.C., the Fourth Circuit determined, under Virginia law, the underlying class action lawsuit, indeed, triggered Travelers’ duty to defend.

The underlying lawsuit was a class action complaint filed against, in pertinent part, Portal Healthcare …

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