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  • When Can an Insurer Pursue a Malpractice Claim Against Defense Counsel Retained for an Insured? Part II: When Can an Insurer Pursue a Reimbursement Claim against an Insured? In Part I (”When Can an Insurer Pursue a Malpractice Claim Against Defense Counsel Retained for an Insured”) of our two-part article published by the ABA’s Insurance Coverage Litigation Committee (ICLC), we addressed the circumstances in which an insurer can directly pursue malpractice claims against defense counsel. We observed that the majority of courts have allowed insurers to bring claims against defense counsel, and we discussed the three primary legal vehicles through which insurers can bring such claims.  As we previewed... More
  • Regulatory Changes Underway To Address Dwindling California Property Insurance Market We keep hearing about how difficult it is for our clients to get property insurance these days, both for homes and businesses in Northern California’s wildfire-prone areas. Which, of course, is most of Northern California.  Those who have not yet been non-renewed are dreading a potential notice on their next renewal cycle, and those who have been non-renewed or are purchasing new property are increasingly left with the FAIR Plan as the only available option.  There is hope that things will... More
  • When Can an Insurer Pursue a Malpractice Claim Against Defense Counsel Retained for an Insured When an insurer accepts an insured’s tender and agrees to provide a defense, it is often an afterthought as to whether the insurer can actually recoup those defense costs or indemnity payments from the insured or defense counsel if things go south. But in certain circumstances, insurance carriers can, and sometimes do, seek to recoup defense costs—and occasionally even attempt to pursue defense counsel for malpractice. Part I of this two-part article, published by the ABA’s Insurance Coverage Litigation Committee (ICLC),... More
  • New Statute Imposes Additional Requirements for Pre-Suit Demands—and Insurers’ Responses To combat a perceived litigation tactic by plaintiffs counsel of using settlement demands within policy limits to set up insurers for bad faith, insurance company associations lobbied for statutory clarification to avoid uncertainty around insurers’ duties when faced with time-limited demands. The result was the enactment of California Code of Civil Procedure Chapter 3.2, Sections 999–999.5, titled “Time-Limited Demands,” which goes into effect Jan. 1, 2023. Claimants’ time-limited settlement demands often seek the available policy limits and are usually referred to in... More
  • “Unfair Trade Practices” Exclusion Does Not Extend to Consumer Protection Claims Two phrases combined in a single exclusion—“alleging, arising out of, based upon or attributable to any violation of any law…” and “as respects… unfair trade practices” could inspire carriers to make trouble for policyholders seeking coverage for consumer protection claims. Fortunately, a recent federal decision recognizes that California rules of policy construction limit the scope of this exclusion, in line with a policyholder’s reasonable expectations of coverage. In James River Ins. Co. v. Rawlings Sporting Goods Co. Inc., Case No. CV... More
  • Reimbursement of Employment-Related Expenses Is Not a “Wage and Hour” Claim Within the Meaning of EPLI Exclusion A recent California appellate court decision found that a wage and hour exclusion in an Employment Practices Liability Insurance (“EPLI”) policy did not bar coverage for claims under California Labor Code sections 2800 and 2802 alleging failure to reimburse expenses. S. Cal. Pizza Co., LLC v. Certain Underwriters at Lloyd’s, London Subscribing to Policy No. 11EPL-20208, Case No. G056243, 2019 WL 4572859 (Cal. Ct. App. Aug. 27, 2019), as modified on denial of reh’g (Sept. 20, 2019). This is a significant decision. It... More
  • Insurance for the Cannabis Industry Program Takeaways I recently moderated a Bar Association of San Francisco Insurance Section program co-sponsored with the Cannabis Law Section. The program highlighted recent changes to local insurance requirements and market availability of coverage for cannabis businesses. Local insurance requirements vary greatly by city and county, and it is important to take this into account—especially if you will be doing business throughout California. While certain coverages are still unavailable (i.e., true outdoor crop insurance) or prohibitively expensive (i.e., quality D&O insurance), one point... More
  • Damages for Permit Revocation Constitute Covered “Loss of Use” Insurers often claim “economic damages” are not covered under a standard commercial general liability (CGL) policy. The Fourth District Court of Appeal’s decision in Thee Sombrero, Inc. v. Scottsdale Ins. Co., 28 Cal. App. 5th 729, 736 (2018) review and request to depublish denied (Jan. 30, 2019), demonstrates that “loss of use” can be measured by “economic damages”—i.e., loss in profit or diminution in value—so long as they are tied to a property interest. In Thee Sombrero, Inc., the insured’s negligent... More
  • Evicting Tenants Over “Illegal” Cannabis Operation Comes Back to Bite Landlords in Coverage Dispute A 6th Circuit case decided earlier this year demonstrates how positions taken by insureds in prior litigation can impact or foreclose coverage in subsequent disputes with insurers. See K.V.G. Properties, Inc. v. Westfield Ins. Co., 900 F.3d 818 (6th Cir. 2018). In K.V.G. Properties, Inc., K.V.G., was unaware that its tenant was operating a cannabis growing operation. Although Michigan allowed for limited legal marijuana cultivation, there was no evidence the tenant was in compliance with local law. After a DEA investigation resulted... More