A federal court in Alaska has granted summary judgment in favor of an insurer, holding that coverage was precluded by the insured’s failure to report a claim made during the first of two consecutive policy periods until after the inception of the second policy period. Alaska Interstate Constr., LLC v. Crum & Forster Spec. Ins. Co., 2015 WL 7253673 (D. Alaska. Nov. 17, 2015). In so holding, the court rejected the “notice-prejudice” rule for…

A federal court in Florida has held that a prior or pending litigation exclusion in a claims-made policy applied where, prior to the inception of the policy, a member of the insured limited liability company sent a letter to another member demanding distributions and threatening to file a lawsuit. U.S. Liab. Ins. Co. v. Kelley Ventures, LLC, 2015 WL 5827903 (S.D. Fla. Sept. 30, 2015). The court granted the insurer’s motion for summary judgment…

A federal court in Idaho has held that “bargaining leverage” in violation of state and federal anti-trust laws is an insufficient gain for purposes of triggering an insurance policy’s improper personal profit or financial advantage exclusion. St. Luke’s Health Sys., Ltd., v. Allied World Nat’l Assurance Co., No. 1:14-CV-475-BLW (D. Idaho  Sept. 4, 2015).…

A federal court in Maryland has held that a “prior knowledge” provision in a claims-made-and-reported policy applied where, prior to the effective date of the policy, other members of the insured’s real estate firm had suggested that the insured was responsible for the firm’s defense costs in an underlying litigation. McDowell Building, LLC v. Zurich Am. Ins. Co., No. RDB-12-2876 (D. Md. May 7, 2015). The court also found that the insurer had properly…

A federal court in California has held that an insurer is obligated to defend claims against members of an insured homeowners’ association, even though the association was not a named defendant. Market Lofts Cmty. Ass’n v. Nat’l Union Fire Ins. Co. of Pittsburgh, 2015 WL 4594553 (C.D. Cal. July 30, 2015).…

A federal court in California has denied an insurer’s motion to dismiss an insured’s bad faith failure-to-settle claim, holding that a demand within limits or other settlement opportunity within limits is not a prerequisite to bad faith liability.  Aspen Spec. Ins. Co. v. Willis Allen Real Estate, 2015 WL 3765008 (S.D. Cal. June 15, 2015).  The court concluded that, to survive a motion to dismiss, California law only requires the insured to allege “some circumstance”…

The Supreme Court of Louisiana has ruled that an insurer can be found liable for a bad faith failure-to-settle claim even absent a firm settlement demand. Kelly v. State Farm Fire & Cas. Co., No. 2014-CQ-1921 (La. May 5, 2015). The court stated, however, that its holding did not impose a bright-line rule requiring insurers to affirmatively make settlement offers. Courts instead should determine whether an insurer has made a “reasonable effort to settle…