Insurance Update

In our November Insurance Update, we address consent, “occurrence,” malicious prosecution, claims-made reporting requirements, and the duty to defend.

Consent has seemed to plague TV-maker Vizio. First, it got into trouble with consumers by allegedly secretly collecting information about their viewing habits and selling that information without the consumers’ consent. Then, it reached a deal with consumers, but never sought its excess liability insurer’s consent before settling. As the Ninth Circuit holds, that mistake proved costly.

A company that supplied oral hygiene packets incorporated an oral rinse made by another. The oral rinse was tainted, and the hygiene packets had to be recalled. Removing the oral rinse destroyed the special packaging of the kits. The insured did not intend to supply tainted rinse, but did any of this arise from an “occurrence”? An Illinois federal court, applying Wisconsin law, decides.

Last month, we discussed how a hotel’s non-compliance with a NPDES permit did not present an “occurrence.” This month, an Indiana federal judge issues a similar ruling after a landowner was accused of violating wetlands regulations.

Malicious prosecution is a covered offense under many liability policies. But courts don’t always agree on what it takes to trigger coverage for a malicious prosecution claim. We include a recent case from the Kentucky Court of Appeals on the issue.

An insured failed to report a claim within 60 days after its claims-made policy expired. But it had renewed coverage successively. Did that matter? An Arizona federal judge didn’t think so.

And finally, A California federal court explains why an insurer has no duty to defend a claim for battery, even if the claim is false.

We hope you enjoy the update. Happy Thanksgiving!

Robert Tugander and Greg Mann