By Louis A. Chiafullo and David A. Thomas, Attorneys, McCarter & English, LLP
The United States Court for the Southern District of New York in a discovery ruling recently carved out some middle ground in a landscape that too often is heavily skewed in favor of insurers in coverage actions. In Pentair Water Treatment (OH) Co., et al. v. The Continental Ins. Co., et al., Dkt No. 08 Civ. 3604, 2009 U.S. Dist. LEXIS 106424 (Nov. 16, 2009), the court allowed discovery into the insurer’s inventory of pollution exclusion clauses used during the relevant time periods of coverage, and also allowed discovery into underwriting practices and the identification of manuals and training procedures.
With these holdings, the Pentair Court provides the policyholder a significant amount of latitude to gather and compare other policies and provisions utilized by its carrier at least during the same period in which the policies were issued. These comparisons are useful, as insurers tend to craft the policy language which can be cryptic and sometimes difficult to decipher. By focusing sunlight on this process, the insured may gain insight into terms and conditions which would otherwise appear murky.
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Louis A. Chiafullo, Esq. is a partner in the Insurance CoverageGroup at McCarter & English, LLP. Mr. Chiafullo's practice consists primarily of complex civil and commercial litigation, with an emphasis on insurance coverage disputes on behalf of policyholders.
David Thomas is an associate in the Insurance Coverage Group at McCarter & English, LLP. Mr. Thomas' practice involves general litigation, including general commercial matters and the prosecution of insurance coverage claims for losses arising from environmental contamination, asbestos bodily injury, recall of products, loss of business income and corporate mismanagement.