Archives for Insurance Law

New York Court Holds That Guilty Plea for Assault & Battery Does Not Preclude Liability Coverage for Incident

​The Supreme Court for New York County has held that a policyholder’s guilty plea for assault does not authorize the denial of liability coverage for a lawsuit arising from the same incident. In United Servs. Auto. Ass’n v. Iannuzzi, the insurer sought a declaratory judgment that it had no duty to defend and indemnify a policyholder for a lawsuit arising from an altercation. The insurer’s argument was based upon policy language limiting liability coverage to claims arising from “occurrences,” which is in turn defined as an “accident.” The insurer argued that as the policyholder had pled guilty for criminal assault
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Pennsylvania Superior Court Holds That Fraudulent Acts Exclusion Precludes Liability Coverage for ERISA Class Action

​The Pennsylvania Superior Court has held that pursuant to a fraudulent acts policy exclusion, a policyholder was not entitled to liability coverage for a class action verdict arising from the policyholder’s misleading description of an ERISA benefits plan. In Cigna Corp. v. Executive Risk Indem., Inc.,the policyholder sought coverage for a class action challenging the policyholder’s 1998 conversion of its defined benefit pension plan to a cash balance plan. This conversion had the effect of freezing or reducing the benefits of some participants. While a trial court determined that the conversion did not violate ERISA, the court also found that
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New Jersey Appellate Court Upholds Denial of Coverage and Enforces Anti-Concurrent Cause Language

​In Ashrit Realty LLC v. Tower National Ins. Co., the Appellate Division of the New Jersey Superior Court held that an insurer properly denied coverage for a building collapse resulting from soil erosion, following the collapse of a pipe. The Court’s decision reflects its willingness to enforce the plain language of a standard anti-concurrent/anti-sequential causation clause to exclude coverage arising from a non-covered cause, even if a covered cause contributed to the loss. ​A rain storm caused damage to a pipe running below the insured property that was followed by Hurricane Irene, which caused the pipe to collapse. As a
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New Jersey Appellate Court Examines Impact of Claimant’s Settlement With Tortfeasors Upon Insurer’s Subrogation Rights

​In Nucci v. American Ins. Co., the New Jersey Superior Court, Appellate Division, examined whether a policyholder’s settlement with alleged tortfeasors precludes an insurer from pursuing subrogation claims against the tortfeasors. While the Court did not issue any precedential decision at this time, the opinion indicates that it may ultimately determine whether tortfeasors who settle a claim with the primary insured while on notice of an insurer’s intent to seek subrogation remain exposed to subrogation claims by the insurer, even if the insurer is challenging coverage and has not paid the claim at the time of settlement. ​Nucci concerned a
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Third Circuit Says No Coverage for Damage Caused By Decomposed Body

In Certain Underwriters at Lloyd’s, London Subscribing to Policy No. SMP3791 v. Creagh, 563 Fed. Appx. 2009 (3d Cir. 2014), a case of first impression, John M. Clark and Georgia S. Foerstner, convinced the United States Court of Appeals for the Third Circuit that coverage for property damage caused by a decomposed body was excluded per the policy’s Microorganism and “Seepage” exclusions. In August 2011, Underwriters’ insured, Williams Creagh, made a claim for property damage in the amount of $180,000 for damage caused by the decomposed body of a tenant. Fluids seeped from the body causing damage to several rooms
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