Insurance Update

Courts were in full swing deciding insurance coverage issues over the past month or so.  Here are a few that caught our attention.

The Louisiana Supreme Court became the latest state supreme court to find no coverage for pandemic-related business interruption losses because such claims do not involve “direct physical loss.”  This case was closely watched because the intermediate appellate court found that “direct physical loss” could mean the loss of use of property.  The Louisiana Supreme Court reversed, finding that any loss from Covid-19 shutdown orders was not physical in any tangible sense.

Sticking with Louisiana, a federal district court strictly enforced a time element reporting provision, finding that it functioned differently than the “as soon as practicable” notice condition.

The Eleventh Circuit took up the issue of whether an insurer waived its pollution exclusion defense for not having raised it in its denial letter.  In finding no waiver, the court discussed the differences between a “policy defense” and a “coverage defense.”

The New Jersey Appellate Division enforced a consent clause where the insured settled and then assigned its rights, and the West Virginia Supreme Court noted the difference between “any insured” and “the insured” when considering whether an employer’s liability exclusion applied.

Finally, after examining common law privacy rights, the Michigan Court of Appeals rejected a policyholder’s attempt to skirt the “statutory right of privacy” exclusion in the context of a TCPA claim.

We hope you find these cases informative.

Rob Tugander and Greg Mann