Insurance Update

Our September Insurance Update features several state and federal appellate court rulings.

We kick off this month’s issue with a decision that liability insurers will appreciate.  Courts differ as to whether coverage defenses based on lack of consent require an insurer to demonstrate prejudice.  The California Supreme Court explains that while prejudice may be required in certain contexts, there should be no prejudice requirement in the third party liability context.

Most auto policies have an exclusion for unlisted resident drivers.  The Pennsylvania Supreme Court decides whether such an exclusion violates public policy.

Turning to the federal circuit courts, the 11th Circuit decides if any payments made as part of a criminal settlement are covered under a D&O policy.  The 10th Circuit considers whether a wine collector deceived out of a couple of thousand bottles has a viable claim under its “private collections” insurance policy.  In two unrelated cases, the 6th Circuit decides if assault and battery and criminal acts exclusions preclude coverage for negligence claims arising out of separate shooting incidents.

At the state intermediate appeals level, an Illinois appellate court decides whether a mediation is a “suit” for duty to defend purposes.  Meanwhile, a Texas appellate court considers the applicability of an exclusion for the aerial spraying of herbicides.

We close out this month’s issue with another consent case.  A federal district court in Tennessee decides whether the insured’s consent judgment and assignment of rights violated the consent provisions of an umbrella policy where the insurer had no duty to defend.

We hope that you find these cases informative.

Rob Tugander and Greg Mann