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January 14, 2016 Policy Conditions, Considerations, Construction, and Formation

Alcohol, Caffeine and Stimulants: Unambiguous Liquor Liability Exclusion Bars Coverage for Bodily Injury Claims

Refusing to succumb to pressure by an insured to find an ambiguity in an exclusion to a commercial general liability (CGL) policy where none existed, the Illinois Appellate Court, First District in Phusion Projects, Inc. v. Selective Ins. Co., 2015 IL App (1st) 150172 (Ill. App. Ct. 1st Dist. 2015) confirmed that plainly written policy exclusions will be enforced.

In Phusion Projects, the manufacturer of an alcoholic beverage containing high levels of alcohol and other stimulants sought coverage from its CGL insurer for …

January 7, 2016 Automobile Coverage

Location, Location, Location: Michigan PIP Benefits Awarded to Illinios Claimant Where Location of Accident is Only Connection to Michigan

Michigan’s no-fault insurance benefits, especially Personal Injury Protection (PIP) benefits, are among the most favorable to claimants. Michigan law requires no-fault insurance for every vehicle owner. This insurance pays for medical expenses, wage loss benefits, replacement services, and damages to other people’s property, no matter who caused the accident. These provisions make Michigan’s no-fault coverage attractive to injured claimants when insurance coverage may not otherwise be available or fault may be difficult to establish, as shown by a recent case decided by Michigan Court of …

December 7, 2015 Duty to Defend

Beware of Boilerplate Claims for “Other Relief Deemed Appropriate” — They Could Trigger a Duty to Defend

Boilerplate demands for “all other relief deemed appropriate” are routine. However, they should not be overlooked when analyzing whether a complaint triggers an insurer’s duty to defend. In Country Mutual Insurance Company v. Bible Pork, Inc. (No. 08-MR-14), the Fifth District Court of Appeals in Illinois held that a nuisance suit against a livestock producer seeking injunctive relief triggered a duty to defend. The appellate court’s decision is significant because the court held that a complaint that appeared to seek only injunctive relief, also asserted …

September 9, 2015 Excess Insurance

Read the Fine Print: Contingent Coverage is Not Excess Coverage

In Bartowiak v. Underwriters at Lloyd’s, London, 2015 IL App (1st) 133549 (August 31, 2015), the Illinois Court of Appeals ruled that the defendant-insurer did not have a duty to defend or indemnify the plaintiff in underlying wrongful death action pursuant to a contingency liability policy.

On October 31, 2009, a truck delivering road-resurfacing material struck and killed a road-construction worker. The decedent’s wife sued the truck driver, the trucking company, and the truck broker. The truck driver had a $1 million automobile policy. …

August 31, 2015 Duty to Defend

A Line Drawn in the Soil: Jeep is Not a “Farm Implement” Under Farm Policy

The U.S. District Court for the Southern District of Illinois applied the “eight-corners” rule to determine that insurer had no duty to defend or indemnify insured in Elmore v. Grinnell Mutual Reinsurance Company et al. (S.D.Ill. July 27, 2015).

The plaintiff filed a declaratory judgment action against Grinnell Mutual Reinsurance, alleging that Grinnell had a duty to defend and indemnify the plaintiff under the terms of his Farm-Guard policy for damages arising out of a motor vehicle accident on a public highway in Illinois. …

July 9, 2015 Disclaimers and Reservations of Rights

Untimely Intervention Sinks Insurer Challenge To Allegedly Collusive $20MM Settlement

In CE Design Ltd. v. King Supply Co., LLC, No. 12-2930, 2015 U.S. App. LEXIS 11117 (7th Cir. June 29, 2015), the Seventh Circuit denied as untimely the attempted intervention of three insurers (all CNA companies) into the underlying lawsuit. The insurers were, in turn, unable to challenge the approval of a $20 million settlement between the policyholder, King Supply Co., LLC, and Plaintiff CE Design Ltd. (and its co-plaintiff).

The underlying case involved a junk fax lawsuit filed by CE Design against King …

June 23, 2015 Emerging Issues

Violation of Statutes Exclusion Bars Coverage for Ancillary TCPA Claims

In Emcasco Insurance Co. v. CE Design, Ltd., the U.S. Court of Appeals for the Tenth Circuit Court granted summary judgment to Emcasco, finding it had no duty to defend the insured against a junk fax suit. In doing so, the court joined a number of jurisdictions holding that an ISO exclusion in a commercial general liability policy applies to all claims that arise, even indirectly, from violations of the Telephone Consumer Protection Act (47 U.S.C. § 227).

As background, CE Design brought a …

May 11, 2015 Regulatory

Inquiry Signals Further Federal Regulation of Annuity Product Sales Likely

Late last week, Senator Elizabeth Warren, Ranking Member of the U.S. Senate Subcommittee on Economic Policy, sent a letter to 15 of the top writers of annuity products, including AIG Companies, Allianz Life Insurance Company of North America, AXA, Lincoln Financial Group, New York Life Insurance Company, and MetLife, seeking information about the manner in which these companies compensate their insurance agents for the sale of these products. Warren emphasized that sales made to those close to retirement were of paramount interest and expressed …

April 24, 2015 Reinsurance

Second Circuit Finds No Coverage Based on Late Notice Issue To a Reinsurer

The U.S. Court of Appeals for the Second Circuit affirmed a district court’s ruling that late notice, alone, was sufficient to defeat a cedent’s claim. In Granite State Insurance Co. v. Clearwater Insurance Co., No, 14-1494-cv, 2015 WL 1474605 (2d Cir. Apr. 2, 2015), the court was forced to determine whether Illinois law on late notice to a reinsurer was settled, or if it should instead apply New York’s prejudice requirement.

Granite State Insurance Company, the cedent, settled a large number of asbestos-related personal …

April 16, 2015 Emerging Issues

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 …