HNRK Coverage Corner

On February 7, 2020, the Second Circuit issued a decision in Lepore v. Hartford Fire Ins. Co., Case No. 19‐778‐cv, holding that a CGL policy exclusion for any suit alleging “an infringement or violation of any intellectual property right” was triggered even though the underlying complaint did not contain a direct IP-infringement claim. The Second Circuit affirmed the trial court’s decision granting summary judgment to the insurer, explaining:

Plaintiffs argue that because no violation of IP rights was asserted in the NL suit, the IP exclusion must be read narrowly, and ...

On February 3, 2020, Justice Sherwood of the New York County Commercial Division issued a decision in Alexander v. Starr Surplus Lines Ins. Co., 2020 NY Slip Op 30297(U), granting a preliminary injunction directing a D&O insurer to advance defense costs to a former corporate officer for an investor lawsuit alleging fraudulent inducement.

The insurer (Starr) argued that coverage was barred by a Major Shareholder Exclusion, which provided that the policy would not cover any claim “made by the individual(s) or entity(ies) that own or control . . . 10% or more of the outstanding voting ...

On December 26, 2019, the First Department issued a decision in Fireman’s Fund Ins. Co. v. State Nat’l Ins. Co., 2019 NY Slip Op 09399, holding that a property owner was entitled to coverage for a personal injury lawsuit as an additional insured under a contractor’s CGL Policy, even though the injuries were not caused by the contractor’s negligence.

This case involves a frequently-litigated policy provision in construction-related insurance coverage matters:  the blanket “additional insureds” endorsement to a contractor’s liability policy. (See our previous ...

On December 30, 2019, Judge Briccetti of the SDNY issued a decision in Ruiz v. Liberty Mut. Fire Ins. Co., 19 CV 4399 (VB), denying an insurer’s motion to dismiss an insured’s claim for breach of the covenant of good faith and fair dealing, but ruling (contrary to recent First Department case law) that the insured could not recover attorneys’ fees as consequential damages.

This case involves a claim under a homeowners insurance policy for damages sustained to a residence from burst water pipes.  The complaint contained a single cause of action for “breach of contract and implied ...

On November 20, 2019, Judge Ramos of the SDNY issued a decision in United Specialty Ins. Co. v. Lux Maintenance & Ren. Corp., Case No. 18-cv-3083 (ER), holding that property owners were entitled to additional insured coverage under a subcontractor’s CGL policy even though the subcontractor agreement misidentified the corporate names of the owners.

Lux Maintenance arose from injuries sustained by a worker in the course of performing balcony and façade repairs to a building collectively owned by Cornell and Rockefeller Universities, New York Hospital, Manhattan Eye Ear & Throat ...