HNRK Coverage Corner

On December 17, 2019, the First Department issued a decision in McGraw-Hill Education, Inc. v. Illinois National Insurance Company, 2019 NY Slip Op 08960, ordering an insurer to provide defense coverage in a copyright infringement action, absent a “judicial determination” that the infringements were intentional. This coverage action arose from over two dozen copyright infringement lawsuits filed across the country against textbook publisher McGraw-Hill Education, Inc. by commercial photographers and stock photography agencies, alleging unauthorized publication ...

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 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 ...

On November 26, 2018, Judge Feuerstein of the EDNY issued a decision in Merritt Environmental Consulting Corp. v. Great Divide Ins. Co., 17-CV-7495, holding that a policy exclusion for claims “arising out of” radioactive contamination did not require proximate causation, but rather “some causal relationship” between the contamination and the claim. In Merritt Environmental, an environmental consulting business sought coverage under a professional liability policy for lawsuits by a client alleging that Merritt negligently failed to identify radioactive ...