July 2024 Insurance Update

It’s not often that the U.S. Supreme Court weighs in on insurance issues. That’s because the McCarran-Ferguson Act gives states the primary authority to regulate the business of insurance. So when the Supreme Court speaks on insurance, even in the context of a bankruptcy plan, it’s noteworthy for insurers.

That’s why we begin with the Supreme Court’s Truck decision, which involved an asbestos personal injury trust and a long-standing bankruptcy rule that often muzzled insurers on a debtor’s reorganization plan, even though the insurer ultimately would be left holding the bag. In reversing that rule, the Court holds that a debtor’s insurer with financial responsibility for bankruptcy claims is a party in interest with a right to object.

Moving on to California, a state where insurance issues are often litigated, the California Supreme Court offers some direction on how losses are to be divvied up among insurers. The case involves horizontal versus vertical exhaustion.

Our next two cases involve runaway fumes. One concerns what it means to “own or occupy” a generator under a pollution exclusion. The other considers whether a professional services exclusion bars a carbon monoxide poisoning claim against an architect.

And rounding out our update is a decision involving the transfer of insurance rights and the application of an anti-assignment clause.

We hope you find the update informative.

Robert Tugander and Greg Mann.