Part 3: Coverage Considerations Under CGL Policies for CCPA Violations

This blog post is our third in a multi-part series addressing what insurers need to know about the California Consumer Privacy Act (CCPA).

Imagine this: You own a successful string of sporting goods stores across California. Not only do you sell goods directly, but you also finance large purchases to well-qualified buyers and have a generous rewards program.

When customers log in to your website, you gather personal information (e.g., name, email address, cell number, etc.). In order to participate in the rewards …

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Excess Coverage Means Excess Coverage, Unless it Doesn’t: Texas Court Holds Umbrella Policy is Excess over a Primary Policy that is “Excess by Coincidence”

Not all excess coverage is created equal. Some excess coverage is true excess coverage of last resort. But other times, excess coverage is not. For example, a Texas Federal Court recently ruled that a true excess policy applied as excess over a CGL policy that was excess due to the circumstances of the underlying action.

By way of background, Pace was the real estate manager for the property owner, Dolce. Pace was an insured under Dolce’s CGL policy, with $1 million limits, and its Umbrella …

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Do Not Pass Go, Do Not Collect Hundreds of Thousands of Dollars: Seventh Circuit Parses Through Insured’s Gamesmanship to Find No CGL Coverage for Settlement of Faulty Workmanship Claim

In Allied Property & Casualty Insurance Co. v. Metro North Condominium Ass’n, No. 16-1868, 2017 U.S. App. LEXIS 4107 (March 8, 2017), the Seventh Circuit found coverage unavailable for a settlement of a lawsuit against a subcontractor alleged to have improperly installed windows at a condominium building. The court’s holding, in essence, was that the bases for the settlement were inconsistent with the claims against the subcontractor, and the only such viable claims could not possibly have been covered under the subject CGL policy.…

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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On Monday, April 11, 2016, the Fourth Circuit handed down a notable, albeit unpublished, decision with regard to an issue that has vexed the insurance industry, namely, do data breaches trigger a CGL insurer’s duty to defend under Coverage B? In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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Total Frat Move: Eastern District of Arkansas Holds CGL Policy’s Exclusions Preclude Coverage for Injuries Arising Out of Hazing

In Admiral Insurance Co. v. Bradley, 2015 U.S. Dist. LEXIS 70490 (E.D. Ark., June 1, 2015) a federal judge sitting in the U.S. District Court for the Eastern District Court addressed whether a fraternity and individual fraternity members were entitled to coverage under a standard CGL policy for injuries sustained by a pledge of the fraternity on the night of his initiation. The underlying claimant alleged that he was caned, paddled, and hit by the fraternity’s members, resulting in his being hospitalized due to …

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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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