HNRK Coverage Corner

This week at the Coverage Corner, we take a quick look at a recent decision from the Southern District New York in which the Court, following a bench trial, ruled in favor of a policyholder and used the mutual mistake doctrine to reform the policy to provide coverage.

Background

The facts are relatively straightforward.  The policyholder, Systems 2000 Plumbing Service (“Systems 2000”) sought coverage from its primary (Travelers) and excess (GuideOne National) insurers in connection with claims against Systems 2000 arising from a fire at the Manhattan apartment building where ...

Last month, the Second Circuit held that commercial general liability insurers owed no duty to defend or indemnify a retailer of unfinished firearms in underlying “ghost gun” lawsuits because the lawsuits at issue did not allege injuries arising from an “accident” as defined by Texas law and were thus not “occurrences” under the policies.    

Background

In Granite State Insurance Company v. Primary Arms, LLC, the insurance dispute arose from lawsuits by the State of New York and the cities of Buffalo and Rochester against Primary Arms, LLC (“Primary Arms”), a ...

This week at the Coverage Corner, we discuss Flextronics Int’l, Ltd. v. Allianz, 25-CV-1511(PAE)—a recent decision out of the Southern District of New York that examines an often disputed, but less-frequently litigated, issue in the realm of D&O coverage:  the allocation of a settlement payment between covered and non-covered loss.  Settlements often resolve a mix of claims against the insureds, some of which (such as securities fraud) may be subject to coverage and others of which (such as breach of contract claims) may not be.  Alternatively, the same settlement might be made on ...

This week at the Coverage Corner, we take a look across the river at a decision from the U.S. District Court for the District of New Jersey that held a dishonest employee’s multi-year scheme to steal money from his employer was one occurrence subject to the per-occurrence limit for a single policy year.  Whether a loss is the result of a single occurrence or multiple occurrences can be a critical question in coverage litigation.  We have previously written about the issue in the context of wildfire liability coverage and, like today’s issue, employee theft.

In today’s case ...

Last month, in CITGO Petroleum Corp. v. Ascot Underwriting Ltd., Case No. 24-0227-cv, the Second Circuit affirmed a victory for CITGO Petroleum Corporation (“CITGO”) when it held that oil seized in Venezuela was covered by a marine cargo reinsurance policy (the “Policy”) that provided coverage for losses caused by an “insurrection.”  On appeal, the Reinsurers argued Venezuela’s instability did not qualify as an insurrection, and they also urged a proximate-cause standard (rather than but-for) for the loss.

Background

In October 2012, Hugo Chávez won reelection ...