HNRK Coverage Corner

On August 26, 2019, Judge Caproni of the SDNY issued a decision in Spandex House, Inc. v. Hartford Fire Ins. Co., Case No. 18-CV-8367 (VEC), enforcing an IP exclusion in a CGL policy that circumvented the “entire action” rule by precluding both defense and indemnity coverage for an otherwise-covered “advertising injury” claim if that claim was joined with any IP claim unconnected to advertising. As Judge Caproni explains, under a duty to defend policy, “if a lawsuit contains a mix of allegations covered by an insurance policy and other allegations falling outside the ...

On July 25, 2019, Justice Crane of the New York County Supreme Court issued a decision in American Empire Surplus Lines Ins. Co. v. Burlington Ins. Co., 2019 NY Slip Op 32221(U), holding that a CGL carrier was required to provide a defense to an additional insured for a personal injury claim, but concluding that, absent a showing of prejudice to the insured, the insurer’s delay in issuing a reservation of rights letter was not a basis to impose a duty to defend.

New York permits an insurer to assume the defense of its insured subject to a reservation of rights, thus allowing the insurer the ...

On August 15, 2019, Justice Perry of the New York County Supreme Court issued a decision in Villas of Ocean Dunes Assn., Inc. v. First Specialty Ins. Corp., 2019 NY Slip Op 32435(U), denying an insured’s petition to compel an excess insurer to submit a disputed property damage claim to appraisal under an appraisal provision in the primary policy.

The insured in Villas of Ocean Dunes was a condominium in Florida that suffered damage during Hurricane Irma.  The condominium had two insurance policies covering property damage:  a primary policy issued by Westchester Surplus Lines ...

On May 29, 2019, Justice Crane of the New York County Supreme Court issued a decision in Continental Cas. Co. v KB Ins. Co., Ltd., 2019 NY Slip Op 31513(U), holding that an exclusion for “Knowing Acts” did not excuse a CGL carrier’s duty to defend Lanham Act claims against the insured. In the underlying litigation, the insured, Value Wholesale, Inc. (Value), was sued by the patent holder for FreeStyle blood glucose test strips for allegedly selling imported test strips not authorized for sale in the United States and selling them in FreeStyle product boxes. The action asserted ...

On April 25, 2019, Justice Sherwood of the New York County Commercial Division issued a decision in Westchester Fire Ins. Co. v. Schorsch, 2019 NY Slip Op 31188(U), holding that a D&O policy's “insured versus insured” exclusion did not preclude coverage for claims against corporate officers by a Creditor Trust. In Schorsch, corporate officers sought coverage under the corporation’s D&O policies for claims brought against them by a Creditor Trust set up in the corporation’s Chapter 11 bankruptcy proceedings.  Two of the excess insurers disclaimed coverage based on an ...