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Recent Blog Posts

• There May Be Coverage for the Defense and Settlement of FTC Claims A number of companies have been sued by the FTC in recent years, alleging, for example, that the company made claims regarding the product or service without adequate substantiation. Many of these companies are small private companies with limited resources. These companies frequently have “Management Liability” or “Private D&O” coverage which may provide relief. Many insureds do not understand that these polices are different than public company D&O policies, because Management Liability policies provide broad coverage for the company itself,... More
• Insurer Must Still Defend Even if Covered Claims Are Dismissed We encounter the following scenario from time to time: The defense counsel just scored a big victory, knocking out a key cause of action. The only problem is—the carrier now says that claim was the only covered cause of action, and since that claim has been dismissed, the insurer has no ongoing duty to defend. Can that be right?  The short answer is no. The duty to defend is based on the “potential” for coverage. That means that, if there is... More
• Claims For Defective Solar Panels Could Be Covered By General Liability Insurance Several solar panel manufacturers and their distributors have been sued in class actions alleging that certain models of panels are defective and need to be replaced. Class actions can be very expensive to defend, and the ultimate liability can also be significant, depending on the number of panels at issue and the facts. Fortunately, a manufacturer or distributor that is sued may have insurance to help defray these costs. As will be explained below, there are strong arguments that these claims... More
• Insurance May Cover Call Recording Class Actions Companies often monitor or record conversations between their employees and customers for training or quality control purposes. You’ve probably heard messages to this effect yourself. These announcements are meant to satisfy laws that prohibit monitoring or recording unless both parties to the call consent. Despite such precautions, however, companies sometimes run afoul of these laws and find themselves facing class action lawsuits alleging calls were recorded without the required notice. Read the full article on the Corporate Counsel website.  (Subscription required)... More
• California Supreme Court: Insureds May Freely Transfer Insurance Rights In 2003, the California Supreme Court ruled that a company’s contractual transfer of insurance rights to a subsequent purchaser was invalid, as it violated the policy condition against assignments without insurer consent. (Henkel Corp. v. Harford Accident & Indemnity Co.)  The decision was surprising to many, as Asset Purchase Agreements routinely assign insurance policies along with other assets and liabilities of the seller. Many of these companies faced enormous exposure for so-called “long-tail exposures”—claims that individuals had been exposed to... More
• Claims for Defective Solar Panels Are Covered by CGL Insurance Several solar panel manufacturers and their distributors have been sued in class actions alleging the panels are defective and need to be replaced. As will be explained below, these kinds of claims are covered by general liability insurance (CGL), the type of policy purchased by virtually any business. Claims for Defective Solar Panels Allege Property Damage General liability policies typically cover bodily injury and property damage. “Property damage” is defined to include “loss of use of tangible property that is not physically... More
• Insurance May Cover Call Recording Class Actions Companies often monitor or record conversations between their employees and customers for training or quality control purposes. California law prohibits monitoring or recording unless both parties consent. Class actions have been brought against a number of companies alleging that calls were routinely recorded without customer consent. These claims may be covered by a company’s general liability (CGL)  policy. CGL policies generally provide coverage for “personal injury” offenses, which are defined to include “oral or written publication of material that violates a... More
• Court Finds Coverage For Settlement Of Restitution Claim Insurers often take the position that indemnification for claims for “restitution” are barred by public policy, and contend they have no obligation to reimburse a settlement of such claims. They often take this position even if the policy itself states that coverage can only be denied if there is a “final adjudication” the insured has obtained a personal profit to which it was not entitled. This position is based largely on  Level 3 Communications, Inc. v. Federal Insurance Co., 272 F.3d... More
• New case affirms broad duty to defend in construction defect case where damage dates unclear A new case from Oregon deals with a recurring problem in construction defect litigation—the absence of clear dates in the complaint regarding when damage is alleged to have occurred. Frequently, a plaintiff will allege that defects in a construction project have caused property damage to other elements of the project, but the complaint is often silent as to when the damage allegedly began. We have long argued that, since the duty to defend exists if there... More
• General Liability Policies May Cover Antitrust, Patent and Other Business Litigation – Part 2 In a prior post, we explained how a general liability policy may cover antitrust, patent, trade secret and other business litigation claims, if there are allegations that insured made negative comments about the other party’s product or business conduct. Claims that the insured engaged in improper use of the litigation process may also lead to coverage in such cases. The standard general liability policy covers “malicious prosecution.” The term “malicious prosecution” has been construed broadly to include other... More