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HNRK Coverage Corner

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 ...

On November 23, 2021, the New York Court of Appeals issued a decision in J.P. Morgan Secs. Inc. v. Vigilant Ins. Co., 2021 NY Slip Op 06528, resolving a long-standing coverage dispute over whether a disgorgement payment made as part of the settlement of an SEC enforcement action constituted a “penalty” that was excluded from coverage under a liability policy’s definition of “loss.”  The Appellate Division, First Department, in a decision previously covered on this blog, held that the payment was a penalty.  That decision relied principally on a 2017 decision of the United ...

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 ...

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