Reed Smith LLP on the “Four Corners” Rule and the Duty to Pay Defense Costs – A Potent Tool for Policyholders Under D&O Insurance Policies

By John B. Berringer and Jill N. Averett, Reed Smith LLP Officers, directors and their corporations routinely are denied the full benefits of the D&O Insurance Policies they purchased at great cost when lawsuits naming them as defendants include allegations of intentional wrongdoing which arguably...

Federal Court Rejects Insurer’s Discretion in Terminating the Duty to Reimburse Defense Costs Under a Directors and Officers Liability Policy

By Brett Wheeler, Associate, Farella Braun + Martel LLP Last month, the Fifth Circuit reaffirmed what has been axiomatic in California since at least Gray v. Zurich, 65 Cal. 2d 263, 278 (1966) : People buy liability policies for peace of mind, expecting to be defended in case they are sued. Any potential...

Pennsylvania Federal Court Gives Policyholders An Enhanced TSA Pat-Down

Eastern District Recognizes Insurer’s Right of Reimbursement of Settlement Payments By Randy Maniloff, Partner, White and Williams LLP We’ve all been there. An insurer is defending its insured in an action under a reservation of rights on account of a potential coverage defense. An...

SNR Denton on Santa’s Best Craft, L.L.C. v Zurich American Insurance Co.: Insurer May Reasonably Dispute Independent Counsel’s Fees Without Risking Estoppel

By William T. Barker, Partner, SNR Denton An Illinois insurer that breaches its duty to defend may be estopped to assert coverage defenses to the duty to indemnify. In Santa’s Best Craft, L.L.C. v Zurich American Insurance Co. , the insured denied that the insurer was entitled to question the...

The June 2011 Release of New Appleman New York Insurance Law is Now Available on Lexis.com

The newest release of New Appleman New York Insurance Law is available on lexis.com as of June 23, 2011. The release contains updates to reflect recent case law and interpretations issued by the Department of Insurance and the Office of General Counsel, as well as recent statutory and regulatory amendments...

Jungleland: New Jersey and the Duty to Defend

Big Man ‐ ifesto From The Supreme Court Applying A Broad Duty to Defend Randy J. Maniloff, White and Williams, LLP "There's an old joke - um... two elderly women are at a Catskill mountain resort, and one of 'em says, 'Boy, the food at this place is really terrible.' The...

McCarter & English on Duty To Defend Obligation Arises For Portee Claim In New Jersey Even In Absence Of Allegation Of Physical Injury

By Jason M. Alexander and David A. Thomas, Associates, McCarter & English, LLP The Supreme Court of New Jersey in Abouzaid v. Mansard Gardens Associates, LLC , 2011 N.J. Lexis 684 (June 21, 2011) held that a claim filed under Portee v. Jaffee , 84 N.J. 88 (1980) (an allegation of severe emotional...

LexisNexis® Insurance Law Community Podcast: Tim Burns on D&O Insurance Disputes and Arbitration

On this edition, Timothy Burns of Perkins Coie LLP discusses D&O policies and arbitration, consolidation issues and multiple insurers, the rise in disputes over defense costs and special issues involving excess insurers and consent. Mr. Burns is the author of the Directors and Officers Insurance...

McCarter and English on New York Courts Continue to Broaden Bad Faith and Extra-Contractual Remedies Against Insurance Companies

By Nicholas M. Insua and Craig W. Davis, Attorneys, McCarter & English, LLP The decision of the New York Supreme Court in Estee Lauder Inc. v. OneBeacon Insurance Group , No. 602379/05, 2012 N.Y. Misc. LEXIS 902, 2012 NY Slip Op 30474U (N.Y. Sup. Ct. Feb. 29, 2012), is another significant victory...

Comfort Orders in Bankruptcy Court To Advance Defense Costs for Directors and Officers Insurance

After entity coverage began to be added to the D&O insurance policy a couple of decades ago, a recurring problem in the bankruptcy context was whether or not the D&O policy proceeds were property of the estate under Bankruptcy Code Section 541 (a) and subject to the automatic stay under Bankruptcy...

Washington Court of Appeals Clarifies an Insurer's Subrogation Rights

By Daniel R. Bentson , Jerret E. Sale The Washington Court of Appeals recently clarified that primary insurers cannot sue other primary insurers on equitable subrogation grounds to recover extra-contractual damages or reasonable attorney fees. Trinity Universal Ins. Co. of Kan. v. Ohio Cas. Ins...

Underwriting Is a Risk Taking Exercise – Car Crusher Not a Trailer

An insurance company is entitled to determine for itself what risks it will accept, and therefore to know all the facts relative to the condition of the applicant’s property. It has the unquestioned right to select those whom it will insure and to rely upon him who would be insured for such information...

California Court Holds Insurer Entitled to Reimbursement of Defense Costs

In its recent decision in Great Am. Ins. Co. v. Chang , 2013 U.S. Dist. LEXIS 159197 (N.D. Cal. Nov. 6, 2013) [ enhanced version available to lexis.com subscribers ], the United States District Court for the Northern District of California had occasion to consider an insurer’s right to reimbursement...

A-L-Hi To Coverage For Pre-Tender Defense Costs: ALI Principles Looking To Shift The Law

If you’ve been reading Coverage Opinions of late you’ve seen me take issue with certain aspects of the American Law Institute’s “Principles of the Law of Liability Insurance” Project. In general, my beef has been with certain proposed Principles that open the door to insureds...