SDV Insights

The "Unavailability Exception" is Unavailable to Policyholders, According to New York Court of Appeals

The New York Court of Appeals recently upheld a prior appellate division decision finding that policyholders facing environmental claims, spanning multiple years, cannot force their insurers partially on the risk to provide coverage for years where the insurers did not issue policies, even though pollution insurance was unavailable in the marketplace.

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California's Highest Court Set to Rule on Insurer's Duty to Defend Lawsuits Relating to the Opioid Crisis

The extreme cost and harm of the opioid crisis in the United States is well-documented, and the California Supreme Court is set to decide if insurance coverage is in play for many related lawsuits. Courts across the country have seen an influx of lawsuits filed against pharmaceutical companies for their role in the ongoing epidemic. The allegations have come from all over and in many forms, from wrongful death and personal injury claims to products liability and derivative suits.

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Contractual Indemnity: Anti-Indemnity Statutes and Additional Insured Coverage

Indemnification provisions and agreements are commonplace in contracts across all industries. The pervasive use of contractual indemnification in business transactions has resulted in state regulation called anti-indemnity laws. While the exact prohibitions of anti-indemnity laws vary by state, they generally prohibit one party from absorbing the sole negligence of another.

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Second Circuit Holds That Employer's Liability Exclusion Does Not Bar Coverage Due to its Ambiguity

In Hastings Development, LLC v. Evanston Insurance Company,1 the United States Court of Appeals for the Second Circuit held that an Employer's Liability Exclusion in a commercial general liability policy does not bar coverage of an underlying personal injury lawsuit because of the ambiguity within the language of the exclusion.

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Washington Policyholders Can Sue Insurance Adjusters Personally for Bad Faith Claims Handling

In a new decision, a Washington State appellate court ruled recently that insureds may sue an insurance adjuster personally for bad faith claims handling. The decision is unusual and has interesting implications for policyholders and insurance companies nationwide.

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Interpreting "Prior Knowledge" Clauses in Claims-Made Policies: When Knowing Too Much Can Hurt You

Claims-made insurance policies are designed to protect policyholders from liability for claims brought during the relevant policy period. From the perspective of the insurer, these policies have the distinct advantage of providing certainty that when the policy period ends without a claim having been made, the insurer will not be exposed to any further liability.

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Insureds Failure to Timely Report Claim Eliminates Coverage

A recent federal court decision, applying California law to directors and officers liability policies, addressed two important issues: the importance of a policyholder's strict compliance with a claims-made-and-reported policy's notice provision, and the importance of accurate representations in an insurance application.

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The Outer Limits: Indiana Federal Court Refuses to Apply Interrelated Wrongful Acts Exclusion in D&O Coverage Dispute

In a recent pro-policyholder decision, an Indiana federal court held that a common, broadly-worded exclusion in Directors & Officers ("D&O") insurance for "Interrelated Wrongful Act[s]" did not preclude coverage, since a literal interpretation would produce "absurd" results. In the past, the all-encompassing language of the exclusion has been abused by insurers who have sought to construe the concept of "interrelation" so broadly as to exclude coverage for otherwise covered claims.

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New York Court of Appeals Addresses Choice of Law Challenges

In June, the New York Court of Appeals examined the application of a New York Choice of Law provision in a contract - a determinative issue for the case. In Ontario, Inc. v. Samsung C&T Corp., the issue was whether the plaintiff's claims were subject to Ontario, Canada's 2-year statute of limitations or New York's 6-year statute of limitations for breach of contract where the contract contained a broad New York Choice of Law provision.

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The Sixth Circuit Weighs in on "Direct Loss" Issue for Cyber Fraud Coverage

Earlier this month, SDV reported on a recent Second Circuit case where the court broadly interpreted the "direct loss" requirement to find coverage for a cyber fraud, email spoofing scam. Now, the Sixth Circuit Court of Appeals has issued a similar opinion in American Tooling Center, Inc. v. Travelers Casualty & Surety Company, finding coverage for a company that lost $834,000 to a similar scam. These recent decisions may indicate a trend in favor of policyholders on the "direct loss" issue.

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