HNRK Coverage Corner

On February 6, 2023, Justice Louis L. Nock of the New York County Supreme Court issued a decision in Wesco Ins. Co. v. Nunez Dental Servs., P.C., 2023 NY Slip Op 30373(U), holding that a criminal acts exclusion barred coverage for a lawsuit alleging violations of the rights of privacy and publicity under the N.Y. Civil Rights Law, despite the fact that the insured was never convicted, or even charged with, a crime.

The underlying lawsuit alleged that the insured, Nunez Dental, misappropriated the image of the plaintiff’s image to advertise Nunez’s dental services.  Among other ...

On January 9, 2023, Justice Lebovits of the New York County Supreme Court issued a decision in Peleus Ins. Co. v RCD Restorations Inc., 2023 NY Slip Op 50034(U), holding that an insurer could not recoup defense costs from its insured, without an express reservation of the right of recoupment.  The Court explained:

Although Peleus provided RCD with coverage in the underlying action/third-party action under a reservation of rights (see NYSCEF No. 17 [reservation of rights letter]), the letter notifying RCD of Peleus’s coverage position did not reserve the right "to recoup expenses ...

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 ...