Archives: Duty to defend

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The Policyholder’s Right to Independent Counsel

Earlier this year, I posted about whether a policyholder has a right to independent counsel when a possible conflict of interest appears between the carrier and the policyholder.  (You can read that post here.)  We’re frequently asked that question, because when insurance companies agree to defend a claim, they often send a reservation of rights … Continue Reading

More developments in insurance coverage for construction defects

Back in the days of the environmental insurance coverage wars, we on the policyholder side argued (eventually successfully in New Jersey) that the word “sudden”, as used in the 1973 version of the pollution exclusion, meant “unexpected” and did not have a temporal connotation. My friends in the defense bar often criticized us for trying … Continue Reading

Insurance coverage for construction defects

The ongoing battles over construction defect coverage remind me of the good old days in the ‘80’s and ‘90s when we used to fight over asbestos and environmental coverage claims (we still have some of those claims, but to a much lesser extent). Construction defects even involve battles over the appropriate trigger of coverage!  Ah, … Continue Reading

Developments in cyberliability coverage

We in business are all overwhelmed with reading material, but I try to make sure that I read at least some legal and business publications every day to keep up with developing trends.  And, it seems that every day I see another article about a new hacking incident, or another dire warning about cyber-risk.  (The … Continue Reading

Insurance Coverage for Alleged Intentional Harm

I’ve sometimes commented on this blog that my first boss in the business warned me: “If you assume there’s no coverage, you won’t find any.” There are plenty of risk managers and brokers who believe that general liability insurance coverage exists primarily to protect against people falling down in the parking lot. Not suprisingly, many … Continue Reading

Additional Insured Coverage

Years ago, there was a Bell Labs facility behind my house, and on Sunday afternoons, the engineers (mostly Indian and Pakistani) would get together and play cricket on the large lawn. I watched the matches quite a bit, but I never could get a grip on the rules. Then a British friend told me that … Continue Reading

The Allocation of Defense Costs in Long-Tail Claims

The great CLE instructor Jim McElhaney, a Professor Emeritus at Case Western, used to tell the story of a “professional expert” testifying at trial on cross-examination.  The guy was apparently a kindly old gentleman with an Irish brogue, and also an engineer, and indeed made most of his money in the litigation game. “You’re a … Continue Reading

When is a “reservation of rights” letter enforceable?

Lawyers and insurance companies are forever reserving their rights.  Sometimes I think it’s a reflex action against ever being forced to take an actual position.  But in the world of insurance coverage, “reservation of rights” letters do serve a function. Insurance companies fear that if they undertake the investigation or defense of a claim, for example, … Continue Reading

Insurance coverage for “intentional” torts

One of the celebrities we lost in 2013 was the novelist Tom Clancy. I wasn’t a Clancy devotee, but I have to admit that “Red Storm Rising” and “The Hunt for Red October” were excellent military thrillers. In “Red October,” the KGB officer on board the Russian submarine (Red October) thinks that, rather than surrendering … Continue Reading

The “Wrongful Acts” Exclusion and the Duty to Defend

There’s a funny (perhaps unintentionally so) website called The Robing Room, on which lawyers rate judges in various categories.  The site is funny mostly because, from reading the reviews, you can generally predict who won and who lost a case before that particular judge.  Take, for example, Judge Joseph F. Bianco of the Eastern District of … Continue Reading

Claims-Made Coverage and “Related Wrongful Acts”

Claims-made policies were supposed to simplify things.  In an article a few years back, insurance expert Fred Fisher noted that the idea behind such policies was to provide greater actuarial certainty for insurance companies, by ensuring that there would be no more claim activity following the end of a policy period (eliminating the “incurred but … Continue Reading

The Penn State scandal and the duty to defend

I greatly respect judges.  And, I feel sympathy for judges. They have a very difficult job. We hand them enormous caseloads for relatively low pay (most of them could make a lot more money in private practice) and then expect them to become conversant in every legal subject imaginable, from water rights to alimony.  By … Continue Reading

The “Eight Corners” Rule and the Duty to Defend

One of the issues that frequently comes up in complicated third-party cases is:  How far outside the underlying complaint does the carrier have to go to determine whether coverage exists?  New Jersey is not an “eight corners” state (in which all the court considers is the four corners of the policy and the four corners … Continue Reading

The timing of an “occurrence” and the duty to defend

Every once in awhile, we come across a case that calls to mind the formal legal term:  “Eeeeww.”  Here’s one that’s now before the New Jersey Supremes, and that (if you can get past the ghoulishness) involves two important questions:   (1)  When does an “occurrence” take place under a liability policy?  (2)  Can a court … Continue Reading

The Right to Select Counsel

Good stuff over at Amy Stewart’s blog on the issue of who gets to pick counsel – the policyholder or the carrier.  Naturally, this depends on the policy language…unless the carrier reserves its rights, in which case the interests of the policyholder and carrier may be in conflict.  The flip-side, of course, is if the carrier lets … Continue Reading

Ambiguity in Insurance Policies

I’m getting ready to participate in a panel discussion at the New Jersey Institute for Continuing Legal Education with some of my friends from both sides of the bar (policyholder and carrier).  I’ll be discussing the rules of construction in insurance policies, particularly as they relate to ambiguity, so I’m re-reading some of the more … Continue Reading

Other insurance clauses and the duty to defend

New York’s highest court just handed down an interesting decision in Fieldston Property Owners Ass’n v. Hermitage Ins. Co.  The case involved an underlying suit for “injurious falsehood,” and the question of who was obligated to provide a defense – the CGL carrier, the D&O carrier, or both?  The CGL policy stated that its coverage was primary … Continue Reading

The insurance company’s duty to pay for settlement following denial of coverage

I’m currently preparing to try another coverage case.  This one involves the question of whether an insurance company, having denied a defense outright, can later second-guess the amount of defense costs and settlement paid by the policyholder out of its own pocket.  In preparing the case, I came across an interesting opinion written by the … Continue Reading

Insurance coverage for intellectual property lawsuits

Most lawyers brag about the cases they’ve won.  I prefer to pick apart the ones I’ve lost.  It’s cathartic. The subject of general liability insurance coverage for supposed intellectual property offenses is hotly contested.  Depending on the “personal injury” and “advertising injury” coverage forms used in a particular policy, for example, insurance may exist for … Continue Reading