Teaching Old Dogs New Tricks: How New Efforts to Curtail Fracking May Result in More Insurance Coverage Disputes
on March 29, 2016
Environmental groups and public-policy thinkers continue to pursue a variety of arguments in their efforts to prevent or limit the claimed dangers of fracking, including the disposal of fracking byproducts in underground injection wells. Two recent developments in this area may be worthy of attention. First, a lawsuit filed in Oklahoma federal court indicates that environmentalists are attempting to apply a familiar environmental statute in the unfamiliar context of injection wells. Second, a proposal by an environmental law professor in Ohio would subject energy companies to strict liability for earthquake damage caused by fracking or injection wells. If either effort is successful, it could result in a greater number of insurance claims--and corresponding coverage disputes....
An Unknown Known: Conflicting Views on the Knowing Violation Exclusion to Insurance Coverage of Defense Costs in Advertising Injury Claims
on March 25, 2016
It is extremely rare to find a complaint for any type of advertising injury claim that does not allege that the defendant acted willfully, intentionally and/or with malice. In fact, such complaints are often replete with these types of allegations for a couple of reasons. In some cases, the type of claim may require that the plaintiff prove an intentional or malicious act to recover. More often than not, though, the plaintiff is looking for enhanced damages in the form of punitive damages or, in cases involving intellectual property infringement, treble damages and attorneys' fees....
Is Your Broker More Than Your Agent?
on March 22, 2016
Policyholders often rely on insurance brokers when purchasing insurance policies. It is well established in Ohio that policyholders, regardless of their use of brokers, have a duty to examine their insurance policies themselves and cannot rely on the broker's representations. In some instances, however, a broker and policyholder relationship may change, which could affect the broker's duty to the policyholder....
How to Reduce the Risk of Being Required to Reimburse Your Insurer for Defense Costs
on March 7, 2016
On December 30, 2015, the First District Court of Appeals reached a decision without precedent in Ohio courts when it affirmed an order that required the policyholder to repay its insurer more than $11.7 million in defense costs, together with interest, which the insurer had paid before the First District determined that it had no duty to defend. See Chiquita Brands Intl., Inc. v. Natl. Union Fire Ins. Co., 1st Dist. Hamilton No. C-140492, 2015-Ohio-5477 ("Chiquita"). The question is whether, in the wake of Chiquita, insurers possess a broad "right" of reimbursement under Ohio law or whether that alleged right is far more limited. The answer clearly is the latter, given that the First District confined its decision to "the particular facts of this case" and further described it as "narrow." It is nonetheless important for policyholders and brokers to understand the rationale of the First District's decision and how it could impact defense coverage....
Not for Lack of Trying, Insurers Cannot Escape Certain Liability when an Insured Files Bankruptcy
on March 2, 2016
The scenario: You have been injured and PretendCorp is liable to you in the amount of $100,000. PretendCorp has a commercial general liability insurance policy ("CGL"), which covers your claim. The CGL has a $20,000 self-insured retention ("SIR") clause that states that PretendCorp is to directly pay you before the insurance company is liable for the remaining amount of the claim. PretendCorp files for federal bankruptcy protection and, as a result, is not required to pay the SIR. Is the insurance company still liable for your claim? At least one federal court in Ohio says "yes." See Sturgill v. Beach at Mason Ltd. P'ship, No. 1:14cv0784, 2015 U.S. Dist. LEXIS 142490 (S.D. Ohio Oct. 20, 2015)....
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