HNRK Coverage Corner

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 April 9, 2021, the Second Circuit issued a decision in Fabrique Innovations, Inc. v. Federal Insurance Company, 20-1396-cv, holding that a policy’s “willful acts” exclusions were not triggered by a “simple breach of contract.” (N.B. HRNK insurance recovery partner Joshua Blosveren successfully represented the Appellee in this appeal.) The insured (“Fabrique”) made a claim under a cargo insurance policy that covered damage to fabric and plush merchandise temporarily in storage at specified locations.  The goods at issue were lost “after Hancock Fabrics ...

On November 27, 2020, Justice Masley of the New York County Commercial Division issued a decision in Alvarez v. XL Specialty Ins. Co., 2020 NY Slip Op 33917(U), holding that a lawsuit against the insureds was not wholly excluded from coverage under a D&O policy where only one part of the lawsuit involved “Wrongful Acts” at issue in an earlier lawsuit that was covered under a prior policy period.

The underlying lawsuit in Alvarez was an action by the Creditors’ Committee of Sears Holdings Corp. against former officers and directors, alleging 35 causes of action, arising from three ...

On October 22, 2020, Judge Román of the SDNY issued a decision in U.S. Specialty Ins. Co. v. Village of Chester, Case No. 19-cv-467(NSR), staying an insurer’s declaratory judgment action pending the resolution of a parallel state court action that would determine the factual issues underlying the coverage dispute.

The Village of Chester sought liability coverage for a lawsuit by a developer who alleged that the City had improperly interfered with the planned construction of a multifamily residential development.  At issue in the underlying litigation was the enforceability of ...

On September 16, 2020, Judge Failla of the SDNY issued a decision in Philadelphia Indemnity Ins. Co. v. Streb, Inc., Case No. 19-CV-366 (KFP), ruling that a CGL carrier had no duty to defend a personal injury action because undisputed “extrinsic evidence” (i.e., facts not alleged in the complaint) conclusively established that an exclusion applied.

The insured (Streb, Inc.), a not-for-profit dance and performance company, was a defendant in a personal injury action brought by a participant in an aerobics class who was severely injured on a trampoline.  Streb’s CGL policy ...