State of California v. Continental Ins. Co., Oral Argument Set for May 30

The California Supreme Court has set oral argument in State of California v. Continental Insurance Co. for May 30, 2012 at 9:00 a.m. in San Francisco.

This case presents two issues for review by the Court: (1) the so-called “all sums” issue, and (2) “stacking” of policy limits. First, when continuous property damage occurs during the periods of several successive liability policies, can each insurer be liable for all damage both during and outside its policy period, up to the amount of the insurer’s policy limits, or is each insurer only liable for property damage that took place during its policy period? Second, if each insurer can be liable for damage taking place outside its policy period, can the insured “stack” policy limits – that is, can the insured recover the combined limits of successive policies?

Philip R. Matthews and William J. Baron of Duane Morris submitted an amicus curiae brief in the case, on behalf of certain London Market Insurers.

Virginia Supreme Court Reaffirms Ruling that Insurer has No Duty to Defend or Indemnify Global Climate Change Suit

Today, the Virginia Supreme Court reaffirmed that Steadfast Insurance Co. does not have a duty to defend or indemnify AES Corporation in an underlying climate change liability suit. See AES Corporation v. Steadfast Insurance Company, No. 100764, 2012 Va. LEXIS 81 (Va. Sup. Ct. April 20, 2012). The Virginia high court is the first state Supreme Court in the nation to issue an opinion concerning insurance coverage for climate change liability suits, which may proliferate in the years ahead.

Continue reading “Virginia Supreme Court Reaffirms Ruling that Insurer has No Duty to Defend or Indemnify Global Climate Change Suit”

Court Considers Equitable Allocation Among Multiple Insurers, and Precludes Allocation to Insurer Absent From Coverage Action

It is becoming more common for courts to consider the nuts and bolts of an equitable allocation among insurers that cover the same risk. Along comes another such decision in the very heavily litigated coverage dispute that already has many lengthy trial court decisions. The latest decision in MGA Entertainment v. The Hartford, 2012 U.S. Dist. LEXIS 55281 (C.D. Ca., April 18, 2012) involves the equitable sharing of many tens of millions of dollars in defense costs incurred by Bratz doll manufacturer, MGA, in an acrimonious lawsuit with Mattel involving copyright infringement and trade secret theft, among other issues.

Continue reading “Court Considers Equitable Allocation Among Multiple Insurers, and Precludes Allocation to Insurer Absent From Coverage Action”

Are All Liability Insurance Policies Exposed To Unlimited Operations Coverage From Asbestos Claims?

All policies are not exposed to unlimited operations coverage from asbestos claims. First, not all asbestos claims present operations coverage issues. The “operations issue” arises from the fact that many CGL policies provide aggregate limits only for claims arising from certain types of hazards—typically Products and Completed Operations. Injuries arising from an insured’s ongoing operations are arguably not subject to an aggregate limit. Therefore, to the extent an asbestos claimant’s injury is the result of exposure during the insured’s operations, the claim arguably is not subject to an aggregate cap. But not all insureds that are subject to asbestos claims conducted operations. Continue reading “Are All Liability Insurance Policies Exposed To Unlimited Operations Coverage From Asbestos Claims?”

New Twists In California Contribution Claims Involving SIRs

An intermediate appellate court in California has issued a decision addressing inter-insurer contribution claims for indemnity payments in the context of self-insured retentions (SIRs) that has a couple of new twists worth noting. In Axis Surplus Ins. Co. v. Glencoe Ins. Ltd. (April 11, 2012), the Court of Appeal for the Fourth District affirmed the trial court’s ruling that Axis was entitled to contribution from Glencoe in the amount of 60% of what Axis paid to settle a construction defect claim against their mutual insured, despite the facts that the insured only made its settlement payment that satisfied the Glencoe SIR after Axis made its settlement payment, that Axis did not prove actual covered damages exceeding the total settlement amount, and that both insurers’ policies contained equal-shares allocation “other insurance” wording.

Continue reading “New Twists In California Contribution Claims Involving SIRs”

Do All CGL Policies State Aggregate Limits Only For Products and Completed Operations Hazards?

Not all policies state aggregate limits only for the Products and Completed Operations hazards. Some provide a total limit of liability. For example, many umbrella policies use the following Limits of Liability wording:

The limit of the company’s liability shall not exceed the amount stated in Item 2(a) of the declarations as a result of any one occurrence. The company’s liability shall be further limited to the amount stated in item 2(b) of the declarations in the aggregate for each annual period during the currency of this policy separately in respect of (1) the products hazard; (2) the completed operations hazard; and (3) personal injury by occupational disease sustained by any employees of the insured;

Continue reading “Do All CGL Policies State Aggregate Limits Only For Products and Completed Operations Hazards?”

Does The Wallace & Gale Decision Contradict Typical CGL Insurance Policy Wording?

In its decision In re Wallace & Gale Co., 385 F.3d 820 (4th Cir. 2004), the Fourth Circuit held that the completed operations aggregate in post operations policies applies where (a) initial exposure occurred after the operations were completed, or (b) initial exposure was during operations but injury continues after operations were completed. Policyholder counsel sometimes attempt to dismiss Wallace & Gale as conflicting with the contract wording. But the Fourth Circuit’s completed operations analysis is based on a straightforward application of the insurance contract language.

Continue reading “Does The Wallace & Gale Decision Contradict Typical CGL Insurance Policy Wording?”