Illinois Appellate Court Finds No Duty to Defend Copyright Infringement Suit

In Erie Insurance Exchange v. Compeve Corp., 2015 IL App (1st) 142508, the Illinois Appellate Court held that Erie Insurance Exchange had no duty to defend Compeve Corporation and Slava Packovskis in a copyright infringement lawsuit filed by Microsoft Corporation. Microsoft specifically alleged copyright infringement as a result of the defendants selling computers with unauthorized copies of Windows XP installed.

Erie filed a declaratory judgment action. The Erie Policy contained standard CGL Coverage B language. The coverage dispute centered on the Infringement Offense, and …

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Connecticut Supreme Court Makes Significant Ruling in Data Breach Case

The Connecticut Supreme Court made a very significant ruling yesterday in Recall Total Information Management, Inc. v. Federal Insurance Co., adopting wholesale the Appellate Court’s well-reasoned ruling that an insured’s loss of sensitive records, without more, does not constitute a “publication” of material that violates a person’s right of privacy. Notably, the Appellate Court held that absent proof of an unauthorized third party’s access to the personal identification information, the “publication” element of the Privacy Offense (under the definition of “personal and advertising injury” …

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Illinois Appellate Court Continues To Rollback Seventh Circuit Rulings on Trigger of Coverage for Wrongful Conviction Claims

In yet another decision eviscerating the line of cases from the Seventh Circuit holding that the trigger of coverage for a wrongful conviction claim is the date of favorable termination, and not the date of conviction, the Illinois Appellate Court, Second District in Indian Harbor Insurance Co. v. City of Waukegan, 2015 IL App (2d) 140293 (Mar. 6, 2015), sided with the majority of courts to have addressed this issue, holding that only the date of conviction triggers malicious prosecution coverage.

As background, Juan …

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Violation of Statutes Exclusions Bars Coverage Entirely for TCPA Claims

In Addison Automatics, Inc. v. Hartford Casualty Insurance Co., No. 13-cv-1922 (N.D. Ill. Mar. 31, 2015) the United States District Court for the Northern District of Illinois granted summary judgment in favor of the Hartford Casualty Insurance Co. and Twin City Fire Insurance Co. (collectively “Hartford”) and against Addison Automatics, Inc. (“Addison”). The district court held that Hartford had no duty to defend their insured, Domino Plastics, Inc. (“Domino”), because the Violation of Statutes Exclusions in the policies barred coverage entirely.

The underlying lawsuit …

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Hackers Continue to Target Health Insurers

Another health insurer has fallen victim to hackers. Premera Blue Cross suffered a breach that may have affected upwards of 11 million consumers. The National Association of Insurance Commissioners (“NAIC”) announced that Washington Insurance Commissioner Mike Kreidler was coordinating the response. NAIC President Monica J. Lindeen stated in the announcement, “Events like this underscore the need for consumers to take immediate and ongoing action to protect personal information like passwords to bank accounts, credit card companies, health insurance accounts and any electronic database that contains …

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“Manifest Intent”: First Department Finds Issue of Fact Regarding Whether Fidelity Bond Covers Keybank for Employee’s Diversion Scheme

In Keybank National Association v. National Union Fire Ins. Company of Pittsburgh, PA, an interesting decision was issued by the New York Appellate Division, First Department recently in which the court considered whether the lower court erred in denying summary judgment to a fidelity bond insurer on a coverage claim. The decision involved questions of what constitutes “manifest intent”,  within the meaning of the fidelity bond, to cause the insured to sustain a loss, or create a benefit for oneself so as to trigger …

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Texas Supreme Court Rejects Additional Insured Coverage for BP To the Tune of $750 Million

In a decision handed down by the Supreme Court of Texas on Friday, the court determined that BP was not entitled to additional insured coverage under several insurance policies issued to Transocean by a variety of insurers.  In re:  Deepwater Horizon, No. 13-0670 (Tex. Feb. 13, 2015).  The opinion also provides significant insights regarding the relationship between insurance and indemnity as risk transfer mechanisms, namely, that:  (1) a named insured can purchase a greater amount or scope of coverage for an additional insured than required …

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California Issues Emergency Regulation on Access to Healthcare Providers

During his second inauguration, California Insurance Commissioner Dave Jones, announced a new emergency regulation relating to access to healthcare providers.  According to an accompanying press release,

The emergency regulation . . .  addresses the problems identified with access to doctors, hospitals, and other medical providers in 2014, as many health insurers reduced their medical provider networks and/or shifted to offering Exclusive Provider Organization (EPO) health insurance products with no out-of-network benefits. Consumers complained of having trouble getting appointments with doctors, traveling long distances to …

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Meth Is Not “All Natural”: Failure To Conform Exclusion Bars Coverage for False Advertising Lawsuits

In General Star Indemnity Co. v. Driven Sports, Inc., 2015 U.S. Dist. LEXIS 7966 (E.D.N.Y. Jan. 23, 2015), General Star Indemnity Co. (“Gen Star”) issued a commercial lines policy to Driven Sports, Inc. (“Driven”), a producer and seller of an energy supplement called Craze.  Driven had been sued in three separate actions alleging that Craze improperly contained a methamphetamine analog.  Gen Star provided a defense under reservation of rights.  Gen Star then brought a declaratory judgment action, and the parties cross-moved for summary judgment.…

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Fifth Circuit Finds No “Personal Injury” or “Advertising Injury” in Trade Secret Misappropriation Suit

In Nationwide Mutual Insurance Co. v. Gum Tree Property Management, LLC, No. 14-60302, 2015 U.S. App. LEXIS 595 (5th Cir. Jan. 14, 2015), the Fifth Circuit affirmed the district court’s grant of summary judgment in favor of Nationwide and certain third-party defendants, finding that Nationwide did not have a duty to defend or indemnify the insureds in the underlying lawsuit.

Lexington Relocation Services, LLC (“Lexington”) brought the underlying lawsuit against three related insureds (“Gum Tree Defendants”) alleging that one of Lexington’s former employees had …

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