Commercial General Liability

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On June 6, 2024, the Supreme Court issued its opinion in Truck Insurance Exchange v. Kaiser Gypsum Co., No. 22-1079, conferring broad standing to debtors’ pre-bankruptcy liability insurers to appear and be heard in Chapter 11 bankruptcy proceedings. The ruling eliminates the “insurance neutrality” doctrine that previously constrained the participation of insurers in Chapter 11, greatly expanding insurers’ capacity to influence the reorganization process.Continue Reading Shifting Gears on Insurer Participation in Chapter 11 Proceedings: U.S. Supreme Court Rejects Longstanding “Insurance Neutrality” Doctrine

On June 29, 2023, the U.S. Supreme Court struck down the race-conscious admissions programs at Harvard University and the University of North Carolina at Chapel Hill in a pair of cases brought by Students for Fair Admissions (SFFA).  The Court in SFFA found the universities in violation of the Equal Protection Clause and Title VI of the Civil Rights Act, holding that the diversity-focused admissions programs “lack sufficiently focused and measurable objectives warranting the use of race, unavoidably employ race in a negative manner, involve racial stereotyping, and lack meaningful end points.”Continue Reading What You May Not Know about The Supreme Court’s Ruling in SFFA—Insurance Coverage Implications for All Industries

On May 3, the 7th U.S. Circuit Court of Appeals sided with the policyholder, resolving an insurance coverage dispute over a $100 million settlement related to claims under the federal Anti-Kickback Statute and the federal False Claims Act. Read on for analysis of this decision, which tries to clarify the difference between compensatory damages, which…

With bank stability and the related stock market rout now dominating the headlines for the first time since the 2008 financial crisis, are financial institutions’ D&O and bankers’ professional liability / E&O (“BPL”) liability policies ready to help backstop coverage, or potentially full of holes?  Coming out of a hard market where insurers carefully and quietly pulled back some policy enhancements over the course of several years, now is the time for financial institutions to review their insurance policies to identify and fill any significant gaps and holes in their executive risk coverages.  The last two weeks demonstrate that financial institutions, as well as their directors and officers, face the risks of receivership, government investigations, securities lawsuits, and personal liability following a bank failure or stock rout in the face of financial stability concerns.  Continue Reading Financial Institutions and Bank Directors and Officers in the Crosshairs – Are Their Insurance Policies Really Primed and Ready?

When seeking insurance coverage for “long-tail” mass tort and environmental claims that involve alleged exposures and injuries spanning multiple years, businesses often look to their occurrence-based commercial general liability (“CGL”) policies.   These policies are designed to provide broad coverage for defense costs, settlements, and potentially adverse judgements.  However, CGL policies generally cover “occurrences” during one-year policy periods and renew on an annual basis, which can complicate efforts to seek coverage for claims involving alleged injuries or property damage spanning decades.  Moreover, for severe claims, businesses may need to obtain access to one or more of their excess CGL policies.  Therefore, determining which policies to pursue, whether policies in multiple policy periods will respond, and how to access valuable excess coverage are factors that should always be considered with coverage counsel when facing long-tail exposures.  Courts across the country are divided on how these questions should be answered.  A recent decision issued by the Supreme Court of North Carolina in Radiator Specialty Co. v. Arrowood Indemnity Co., provides guidance to North Carolina policyholders attempting to maximize coverage for long-tail claims.Continue Reading North Carolina Supreme Court Provides Guidance to Policyholders Attempting to Maximize Insurance Coverage for Long-Tail Claims

In May 2022, the Illinois Supreme Court heard oral arguments in Cothron v. White Castle System, Inc. — a case that will have a substantial impact on the liability for violating the Illinois Biometric Information Privacy Act (“BIPA”).  BIPA is considered to be among the most robust law in the U.S. governing biometric privacy, and Illinois is among the few jurisdictions permitting private suits for the unlawful collection, storage of such data.  Since its inception in 2008, BIPA has been the source of a flurry of lawsuits, many of which have resulted in substantial settlements.  The court is set to determine how to calculate the number of individual BIPA violations, whether damages accrue each time an employee scans her fingerprint, or whether the first recorded scan is the sole violation.  If the Illinois high court determines that damages accrue with each scan and BIPA violations are ongoing, then the potential damages for BIPA lawsuits would increase exponentially and open a flood of new claims.  Fortunately, insurance policyholders have had recent success arguing that coverage exists for BIPA violations under Commercial General Liability (“CGL”) policies.  A plaintiff-friendly ruling in the Cothron case would make the ability to recover under these policies even more important, and potentially open additional avenues for recovery.  In anticipation of this important ruling, this article provides a brief background on BIPA and summarizes the key decisions relating to insurance recovery of BIPA damages.
Continue Reading Update on Case Law Developments for BIPA Damages and Insurance Recovery for BIPA Claims

In several states, an insured that prevails in a coverage dispute against its insurer is entitled to statutory “penalty interest” added to the amount owed by the insurer.  A June 8, 2022 decision from the United States District Court for the Western District of Michigan illustrates the importance of meeting the “proof of loss” requirements of such statutes.

In Alticor Global Holdings, Inc. v. American International Specialty Lines Insurance Co., an insured filed an action against its insurer after the insurer refused to reimburse the costs of defending and ultimately settling copyright infringement claims asserted against the insured.  The District Court found that the insured was entitled to coverage under an Internet and Network Security Insurance Policy for $24 million in costs incurred in the underlying lawsuit and then considered the amount of interest that should be paid by the insurer on top of the breach of contract damages awarded to the insured.Continue Reading Recent Michigan Court Ruling Reinforces Importance of Providing Prompt “Proof of Loss”

In two recent decisions, the Texas Supreme Court defined the limited parameters in which Texas courts can look beyond the “four corners” of the complaint against the policyholder and the “four corners” of the insurance policy (i.e., the “eight-corners rule”) when determining whether an insurer’s “duty to defend” is triggered.

Permitting exceptions to the “eight-corners rule” and, in limited instances, allowing the use of extrinsic evidence to determine whether the duty to defend applies, requires policyholders to pay extra care to whether their insurers are properly accepting or denying defense of a suit. Application of fact-intensive tests like the Texas Supreme Court just announced varies from state to state.Continue Reading Beyond the Eight Corners: Determining Whether a Liability Insurer’s Duty to Defend Is Triggered