Insurance Update

In our January insurance update, we include three state cases addressing some less common situations.

It’s not often that a pollution exclusion is interpreted in the context of an auto policy.  But the South Dakota Supreme Court considered whether the exclusion barred a claim arising from a contaminated wheat delivery.

Village officials made it very difficult for a developer to go forward with a residential project and ultimately demolished the structure.  Yet an Illinois appellate court found that the Village was entitled to a defense in the developer’s suit under a policy that covers negligent errors, acts, or omissions.

Typically, a policyholder must timely notify its insurer of a suit if it wants to be defended.  An insurer chose not to defend a claim where the policyholder didn’t provide notice and later declined a defense.  But that proved costly to the insurer, as the South Carolina Court of Appeals upheld a large award against it.

At the federal level, the Third Circuit entertained a dispute between insurers over a professional liability exclusion, the Ninth Circuit considered a suit limitation clause for a latent property damage claim, and a district court in Kentucky decided whether a faulty workmanship claim is covered under a CGL policy.

We hope you enjoy the update.

Robert Tugander and Greg Mann