What’s Yours is Mine and What’s Mine Isn’t Covered: Illinois Federal Court Rejects Coverage for Suit Seeking Restitution

In Westport Insurance Corp. v. M.L. Sullivan Insurance Agency, Inc., No. 15 C 7294, 2017 U.S. Dist. LEXIS 1527 (N.D. Ill. Jan. 5, 2017), an Illinois federal district court underscored the importance of a policy’s damages requirement when it granted judgment on the pleadings in favor of Westport Insurance Corporation and against its insured M.L. Sullivan Insurance Agency.

In the underlying suit, American Inter-Fidelity Exchange (AIFE) alleged Sullivan and one of its employees provided false information about insurance premiums due and requested damages representing …

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Insurer’s Policy Exclusion Bars Its Own Claim for Damages

The Eastern District of Louisiana cited to an insurer’s own policy exclusion for “faulty workmanship, repair or construction” to prohibit the insurer from seeking damages.  The damages being sought amounted to more than $2.8 million, including for damage caused by roofing repair work.  The work was performed on a commercial building that was damaged by Hurricane Issac.

In making its decision, the court indicated that its policyholder was seeking coverage due to hurricane damage, not faulty repairs relative to the hurricane damage.  Since the “faulty …

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