Wiley Executive Summary

Insights on Insurance

January 23, 2020

The United States District Court for the Southern District of New York, applying New Jersey law, has held that an insurer was estopped from denying coverage under a retroactivity provision in an engineering firm’s professional liability policy because the insurer’s reservation of rights, which was issued three years after accepting control of the insured’s defense, was untimely and defective. RLI Ins. Co. v. AST Eng’g Corp., 2019 WL 7114986 (S.D.N.Y. Dec. 20, 2019).…

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No Coverage for Lawsuit Seeking Recovery of Disputed Legal Fees

By Emily S. Hart

January 8, 2020

In a win for Wiley Rein’s client, the U.S. Court of Appeals for the Second Circuit, applying Connecticut law, has held that no coverage is available for a lawsuit seeking recovery of disputed legal fees because the relief sought does not constitute covered “damages” and because the insured was not performing “legal services.” Continental Cas. Co. v. Parnoff, 2019 WL 6999867 (2d Cir. Dec. 20, 2019).…

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Notice Prejudice Rule Not Applicable to Claims-Made-And-Reported Policies

By Emily S. Hart

January 6, 2020

The U.S. Court of Appeals for the Ninth Circuit, applying California law, has held that an insurer is not required to show prejudice to deny coverage under a claims-made-and-reported policy based on an insured’s late notice. Euraupair Int’l, Inc. v. Ironshore Spec. Ins. Co., 2019 WL 6817593 (9th Cir. Dec. 13, 2019).…

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Insurer Must Advance Defense Costs as Incurred and Cannot Enforce Policy’s Defense Arrangement Consent Provision

By Mallory Meaney

January 6, 2020

Applying California Law, the United States District Court for the Southern District of California has held that an insurer must pay defense costs contemporaneously, even where the policy’s advancement provision merely requires payment “prior to final disposition of a claim,” because the insured became legally liable for defense costs as they were incurred. Renovate Am., Inc. v. Lloyd’s Syndicate 1458, 2019 WL 6716735 (S.D. Cal. Dec. 10, 2019). The court further held that the…

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Lawsuit Arising Out of Three Design Errors is a Single “Claim,” and Prior Knowledge and Prior Notice Provisions Bar Coverage

By Margaret Thomas

January 3, 2020

In a win for Wiley Rein’s client, the United States District Court for the Southern District of Florida, applying Florida law, held that, as a matter of law, a lawsuit against an engineer arising out of three alleged errors in connection with a construction project constituted a single “claim” under the engineer’s claims-made-and-reported architects and engineers policies. Nova Southeastern Univ., Inc. v. Continental Cas. Co., No. 18-CIV-61842-RAR (S.D. Fla. Dec. 27, 2019). Furthermore, the…

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Concealment of Pending Lawsuits in Renewal Application Voids Policy

By Katelyn Cramp

January 2, 2020

Applying Ohio law, a federal district court has held that misrepresentations in an application warranty statement regarding three unreported lawsuits filed against the insured during the initial policy period rendered a renewed claims-made and reported policy void ab initio. Certain Underwriters at Lloyds London Subscribing to Policy No. HMPL 18-0164 & HMPL 17-0158 v. KG Admin. Servs., Inc., 2019 WL 6770061 (N.D. Ohio Dec. 12, 2019). The court also held that, because the claims…

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“May” and “Might” are Sufficiently Clear and Unambiguous to Support Rescission Claim

By Sara Dunton

December 16, 2019

Applying California law, a federal district court has rejected an insured law firm’s argument that the terms “may” and “might” as used in connection with an application question regarding knowledge of potential claims are ambiguous and unenforceable. Am. Alternative Ins. Corp. v. Warner, 2019 WL 6493945 (N.D. Cal. Dec. 3, 2019).…

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Obligation to Timely Report Claim Applies Even if Claim Appears to Have Been Abandoned

By Anna Schaffner

December 12, 2019

Applying Illinois Law, the United States District Court for the Northern District of Illinois has held that an insurer had no duty to defend a claim reported more than nine months after the end of the policy period. Wesco Ins. Co. v. Elements Architectural Grp., Inc., 2019 WL 5725440 (N.D. Ill. Nov. 5, 2019).…

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No Coverage for Claim Made During Initial Policy Period but Reported During Renewal Policy Period

By William Knauss

December 11, 2019

Applying Ohio law, an Ohio appellate court has held that renewal of a claims-made policy does not extend the time by which an insured may report a claim. ISCO Indus., Inc. v. Great Am. Ins. Co., 2019 WL 6353709 (Ohio Ct. App. Nov. 27, 2019). The court further held that the “notice prejudice” rule does not apply because coverage under a claims-made policy is generally restricted to claims made and reported during the…

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Ill. Ruling Clarifies Wrongful Incarceration Insurance Triggers

By Karen L. Toto & Benjamin C. Eggert

December 6, 2019

This article was originally published in Law360. In Sanders v. Illinois Union Insurance Company, the Supreme Court of the State of Illinois resolved a split in state and federal decisions applying Illinois law on trigger of coverage in the context of wrongful incarceration.[1] According to the Illinois Supreme Court, the City of Chicago Heights’ insurers had no coverage obligation under policies in effect when the claimant was retried for murder and exonerated, two decades after…

Wiley Executive Summary

Insights on Insurance

Blog Authors

Untimely Reservation of Rights Estops Insurer from Denying Coverage

No Coverage for Lawsuit Seeking Recovery of Disputed Legal Fees

Notice Prejudice Rule Not Applicable to Claims-Made-And-Reported Policies

Insurer Must Advance Defense Costs as Incurred and Cannot Enforce Policy’s Defense Arrangement Consent Provision

Lawsuit Arising Out of Three Design Errors is a Single “Claim,” and Prior Knowledge and Prior Notice Provisions Bar Coverage

Concealment of Pending Lawsuits in Renewal Application Voids Policy

“May” and “Might” are Sufficiently Clear and Unambiguous to Support Rescission Claim

Obligation to Timely Report Claim Applies Even if Claim Appears to Have Been Abandoned

No Coverage for Claim Made During Initial Policy Period but Reported During Renewal Policy Period

Ill. Ruling Clarifies Wrongful Incarceration Insurance Triggers

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