HNRK Coverage Corner

In orders issued last week, a panel of the Ninth Circuit and a federal district judge in Hawaii certified questions to the Supreme Courts of Alaska and Hawaii regarding the scope of a liability policy’s “absolute” or “total” pollution exclusion.  The state high courts will address whether carbon monoxide and carbon dioxide constitute “pollutants” under such an exclusion. 

Ninth Circuit Order – Is Carbon Monoxide a Pollutant Under a Homeowners Policy?

The Ninth Circuit’s order in Estate of Wheeler v. Garrison Property & Casualty Ins. Co., No. 22-35484, issued on ...

On August 10, 2023, Judge Rennie of the Superior Court of Delaware issued a decision in a pair of cases, Viacom Inc. v. Paramount Global, C.A. N22C-06-016 SKR CCLD and Redstone v. ACE American Insurance Co., C.A. No. N22C-06-020 SKR CCLD, ruling that a D&O policy’s “bump-up” exclusion did not apply to losses arising from a merger transaction.

The coverage dispute arose from a 2019 transaction through which Viacom merged with CBS.  As a result of the all-stock transaction, “all assets of Viacom ‘vest[ed] in CBS, and CBS was the surviving corporation.”  Shareholders ...

On July 13, 2023, the Eleventh Circuit issued a decision in Continental Casualty Co. v. Winder Laboratories, LLC, Case No. 21-11758, resolving an issue of first impression under Georgia law—whether an insurer can recoup defense costs it paid under a duty to defend policy upon a finding that the insurer has no duty to indemnify the insured.  The Court ruled that such recoupment is not permitted unless the policy expressly provides for it, explaining:   

As an initial matter, we disagree with the insurers’ argument that there is a clear “majority” rule favoring recoupment across ...

On June 13, 2023, the Sixth Circuit issued a decision in Admiral Ins. Co. v. Fire-Dex, LLC, Case No. 22-3922, affirming a district court’s order declining to exercise jurisdiction over an insurer’s declaratory judgment action on the ground that the action turned on a “novel issue of Ohio insurance law” that should be resolved by the Ohio state courts.

At issue in Fire-Dex was whether illnesses arising from exposure to PFAS—so-called “forever chemicals”—in a manufacturer’s finished products constitute an “occupational disease” under Ohio law.  The Sixth ...

On May 23, 2023, SDNY Bankruptcy Judge Martin Glenn issued an order in In re: SVB Financial Group, Case No. 23-10367(MG), lifting an automatic stay to permit Silicon Valley Bank’s D&O insurers to advance to defense costs to the bank’s officers in connection with litigation arising from the bank’s collapse.

A typical D&O policy offers coverage both to the corporation and to its officers and directors.  SVB D&O insurance program consists of 16 so-called “ABC Policies”, which provides three categories of coverage: (1) “Side A” coverage goes directly to directors and ...