Category: Emerging Issues

The recent discovery of the Libor Scandal has far reaching consequences including creating repercussions in the insurance and reinsurance industry.

The briefing note authored by Tanguy Le Gouellec de Schwarz examines in-depth the potential effect the Libor Scandal will have on the insurance and reinsurance markets.  A copy of the briefing note can be found here.…

Western World Ins. Co. v. Markel American Ins. Co. 10th Cir. (Okla.) May 8, 2012

In what may be the most fun the Tenth Circuit has had authoring an Opinion on a coverage matter, an insurer was stripped of its victory and held responsible for its share of the defense costs of the underlying action. In a must-read Opinion fraught with puns, the Court decided that an escape clause added to a commercial liability policy by an endorsement was unclear and therefore the reasonable expectations …

Momentive Spec. Chem., Inc. v. Chartis Spec. Ins. Co  (S.D. Ohio March 12, 2012)

This case arises out of an insurance coverage dispute following a methanol spill from a Chilean tanker ship in Paranagua Bay, Brazil.  The court was asked to rule on a motion to dismiss brought by defendant, Aon Risk Services Northeast, Inc. (AON).  Plaintiff, Momentive Specialty Chemicals, Inc. (Momentive), and its subsidiary Momentive Quimica de Brazil Ltda (Momentive Brazil), brought suit against AON, Chartis Specialty Insurance, Inc. (Chartis), and Willis North America, …

VICOR CORPORATION v. VIGILANT INSURANCE COMPANY (1^st Cir. (Mass.) March 16, 2012).

By a panel including retired U.S. Supreme Court Justice David Souter, the First Circuit rejected a broad application of the word “for” in the definition of damages, and concluded that emergency response costs did not constitute damages relating to “loss of use of property not physically injured.” 

The insured manufactured power converters for use in radio base stations.  Radio base stations are used to set up and operate cellular telephone towers and …

Secura Ins. v. Horizon Plumbing, Inc. (8^th Cir. (Mo.) Mar. 5, 2012)

The Eighth Circuit recently held that a general contractor was not entitled to insurance coverage in a case arising from its alleged breach of a construction contract. The Eighth Circuit held that damages arising from an insured’s breach of contract, including failure to correct defective work, are not accidental and, therefore, do not arise from an “occurrence.” 

MH Metropolitan LLC (“Metropolitan”) hired Weitz Company LLC (“Weitz”) as the general contractor on a …

Republic Franklin Ins. Co. v. Albemarle County School Board (4^th Cit. (Va.) Feb. 24, 2012)

The Fourth Circuit recently held that an insured’s violation of the Fair Labor Standards Act (“FLSA”) constituted a “wrongful act” within the meaning of a school board’s insurance policy, triggering the insurer’s duty to defend. Although the court found that the policy did not cover unpaid wages arising from the school board’s violations, it concluded that the school board was entitled to coverage for any liquidated damages or attorneys’ …

National Union Fire Insurance Company of Pittsburgh, PA v. Seagate Technology, Inc.,  (9^th Cir., January 20, 2012, No. 10-17194)

 In today’s insurance litigation environment, United States Courts of Appeals are rarely required to weigh in on such fundamental insurance coverage issues as the duty to defend.  In a rare exception, the Ninth Circuit clarified an excess insurer’s obligations in that regard.

In the underlying case, the insured was sued in connection with its “silent” hard drive.  The complaint alleged misappropriation of …

Woodhams v. Allstate Fire & Cas. Co, (United States Court of Appeals For the Second Circuit, January 3, 2012)

Plaintiffs commenced a putative class-action suit against defendants, Allstate Fire and Casualty, Insurance, Indemnity and Property and Casualty Insurance Companies (Allstate), because Allstate denied plaintiffs reimbursement for repairs from fire damage that were not completed within 180 days of Allstate’s initial payment to the plaintiffs for the actual cash value of their damaged property. The Second Circuit Court upheld the District Court’s decision to dismiss …

Continental Cas. Co. v. Duckson (N.D. Ill. Nov. 15, 2011)

In a matter of first impression, the district court for the Northern District of Illinois rejected an insured’s argument that his professional liability was obligated to reimburse him for “claim expenses” even though it was not obligated to defend him.

The insured, a partner at a law firm, tendered his defense and indemnity to his professional liability insurer after he was sued by the Securities and Exchange Commission (“SEC”). Specifically, the SEC complaint alleged that …

Dept. of Health and Human Services v. Florida; NFIB v. Sebelius; and Florida v. HHS, November 14, 2011

On Monday, November 14, 2011, the U.S. Supreme Court had decided to determine the constitutionality of the sweeping health care reform law, Patient Protection and Affordable Care Act (“PPACA”), proposed by President Barack Obama.  The announcement was made via a brief order issued on Monday.

Oral arguments are likely to be scheduled for late February or March, with a ruling possibly as early as June.  The court …