HNRK Coverage Corner

On December 22, 2022, Judge Failla of the SDNY issued a decision in 622 Third Ave. Co., L.L.C. v. National Fire Ins. Co. of Pittsburgh, Pa., 21 Civ. 6050, ruling that a liability insurer could not deny defense coverage to an additional insured based on extrinsic evidence that was “bound up with the merits of the underlying case” against the insured.

The Plaintiff in 622 Third Ave., a property owner, was sued by an employee of a subcontractor who was allegedly injured while working on a project at the Plaintiff’s building.  Plaintiff sought coverage as an additional insured under its ...

On September 22, 2022, the Second Circuit issued a decision in Fireman’s Fund Ins. Co. v. OneBeacon Ins. Co., Case No. 20-4282, ruling than an insured’s below limits settlement with an excess insurer satisfied the exhaustion requirement of a higher-tier excess policy.

The insured, ASARCO, was a mining, smelting and refining company facing liability in the hundreds of millions for personally injury claims arising from alleged asbestos exposure.  Its insurance program for the relevant period consisted of three excess policies issued by Fireman’s Fund: the first covered $20 ...

On May 11, 2022, Justice Lebovits of the New York County Supreme Court issued a decision in Century Indemnity Company v. Brooklyn Union Gas Company, 2022 N.Y. Slip Op. 50388(U), holding that the doctrine of contra proferentem (construing ambiguous contract language against the drafter) “does not govern interpretation of insurance policies when the policyholder is sophisticated.”

A leading insurance treatise explains contra proferentem and its application to insurance disputes as follows:

The most frequently employed principle of interpretation . . . is contra ...

On April 22, 2022, the New York Appellate Division, First Department issued a decision in Madison Square Boys & Girls Club, Inc. v. Atlantic Specialty Ins. Co., 2022 NY Slip Op 02625, holding that a sexual abuse exclusion applied to claims for negligent supervision.

This coverage action arose out of a lawsuit by former members of the Madison Square Boys and Girls Club, who alleged that they were sexually abused as children by a former volunteer and former coach for the organization.  Madison Square sought coverage under a claims-made liability policy for the lawsuit, which asserted ...

On March 22, 2022, the Delaware Supreme Court issued a decision in First Solar, Inc. v. National Union Fire Ins. Co. of Pittsburgh Pa., No. 217, 2021, clarifying the standard for applying the related claims provision of a directors and officers liability policy under Delaware law.

D&O policies are typically claims-made—meaning they cover claims made against the insured during the policy period, even though the underlying conduct may have occurred during an earlier period.  But sometimes a lawsuit filed during the policy period may, in fact, be covered by an earlier policy.  This is ...