HNRK Coverage Corner

On December 5, 2019, the First Department issued a decision in Certain Underwriters at Lloyd’s v. BioEnergy Development Group, LLC, 2019 NY Slip Op 08779, reversing a trial court’s dismissal of a claim based on the insurer’s bad faith delay in providing business interruption coverage, explaining:

The breach of the implied duty part of the counterclaim is based on allegations that plaintiffs refused to advance more than $6,806,725 in business interruption coverage until an appraisal panel awarded more than double that amount, and refused to pay the full amount of the property ...

On November 20, 2019, Judge Briccetti of the SDNY issued a decision in Metropolitan Prop. & Cas. Ins. Co. v. Comley, Case No. 18-cv-9259 (VB), holding that a liability insurer properly denied defense coverage, under an exclusion for “intentional and criminal acts”, for a lawsuit alleging “negligent supervision” of the insureds’ minor son, who committed a sexual assault. The policy at issue—a homeowners’ policy—covered both the parents and their “relatives”, who are “resident[s] of the same household.” The policy’s “intentional and criminal ...

On November 8, 2019, Judge Gardephe of the SDNY issued a decision in XL Specialty Ins. Co. v. Prestige Fragrances, Inc., Case No. 18-cv-733 (PGG), holding that issues of fact precluded summary judgment on this issue of whether an insurance broker was an agent of the insurance company such that notice to the broker constituted notice to the insurance company.

Prestige Fragrances involved a first-party insurance claim for losses from a theft at the insured’s warehouse. The insurance company (XL Specialty) denied the claim and asserted that the policy was void ab initio because in ...

On October 28, 2019, Justice Borrok of the New York County Commercial Division issued a decision in Travelers Prop. Cas. Co. of Am. v. ICCO Cheese Co., Inc., 2019 NY Slip Op 33224(U), holding that a CGL carrier had no duty to defend consumer fraud class actions against Walmart because the complaints did not allege claims for “bodily injury” or “property damage.”

Walmart was sued in class actions across the country (consolidated in an MDL proceeding) for allegedly mislabeling parmesan cheese sold under its Great Value brand as “100% grated Parmesan cheese when, in reality, it ...

On October 18, 2019, Justice Crane of the New York County Supreme Court issued a decision in Cookies on Fulton, Inc. v. Aspen Specialty Ins. Co., 2019 NY Slip Op 33111(U), holding that an exclusion for claims arising from “any construction or renovation-related activity except for janitorial or maintenance related work” did not excuse a CGL carrier’s duty to defend the insured business owner in a lawsuit for injuries sustained in the course of “changing light fixtures.”

The vague allegations in the complaint (typical in personal injury actions) “suggest[ed] that the ...