CALIFORNIA Additional Insureds

The Second District has affirmed a lower court’s ruling that the liability insurer of a drug manufacturer was not required to provide additional insured coverage to a retailer for bodily injury claims that a customer suffered after ingesting the named insured’s drug because the loss arose out of the retailer’s defective labeling of the product rather than any problem with its manufacture. In Target Corp. v. Golden State Ins. Co., Ltd. , B279995 (Cal. App. Oct. 2019), the Court of Appeal ruled that the injuries did not "arise out of" the named insured’s product and were, in any event, subject to an exclusion in the policy’s additional insured endorsement for losses due to the "[r]epackaging" of products or "[p]roducts which, after distribution or sale by you [supplier] have been labeled or relabeled."

ILLINOIS First Party/Ambiguity

The Appellate Court has affirmed a trial court's declaration in Turmusayaa Jewelry, Inc. v. certain underwriters at Lloyds of London Inc., 2019 IL App (1st) 181075 (Ill. App. Ct. Sept. 19, 2019) that a jeweler was entitled to coverage for a loss suffered in the course of an armed robbery notwithstanding Lloyds' contention that the insured had not complied with the "two-person warranty" in the policy that required that at least two individuals be present while the store was open or in the process of closing. The Appellate Court ruled that the language in question was ambiguous and declined to accept extrinsic evidence with respect to its meaning or interpretation.

MASSACHUSETTS Forum Selection Clauses

A federal district court has ruled in Firemen's Insurance Company of Washington, D.C. v. ACE American Insurance Company No. 19-10129 (D. Mass. July 8, 2019) that a dispute between two general liability insurers with respect to their respective obligations as regards a personal injury lawsuit arising out of construction on property owned by the Wegmans Supermarket chain should be transferred to the U.S. District Court for the Western District of New York for resolution pursuant to New York law pursuant to a valid forum selection clause in the underlying contract.

WASHINGTON Certificates of Insurance/Apparent Authority

On a certified question from the Ninth Circuit, the Washington Supreme Court has declared that a statement that an authorized agent made in a certificate of insurance extending additional insured coverage to an affiliated corporation was binding on the insurer even though the policy itself was not intended to insure that entity. While agreeing that a certificate of insurance is not the same as a policy and does not ordinarily convey coverage rights, the Supreme Court ruled in T Mobile USA v. Selective Ins. Co. of America, No. 96500-5 (Wash. Oct. 10, 2019) that the certificate had binding effect in this instance because it contained representations made by an authorized agent of Selective that explicitly named T Mobile USA as an additional insured. The court found that "Otherwise, an insurance company's representations would be meaningless and it could mislead without consequence."


Inside the Insurance Industry

The International Underwriting Association reports that gross premiums underwritten by the London Market rose 8% to nearly $35 billion in 2018, continuing 2017’s positive growth trend.

Cyber Claims Update

Here is the latest newsletter from Morrison Mahoney’s cyberclaims group.

A new report on cyberclaims that Chubb issued last Friday finds that ransomware attacks during the first half of 2019 exceeded those for all of 2018 and are continuing to rise. The report found that 23% of these attacks were against manufacturers with professional services lines accounting for another 30 percent. The report observed that "Manufacturing companies are more likely to be targeted because of their need to quickly restore operations, and professional service firms, which rely heavily on email, are often affected because of vulnerabilities associated with phishing attacks. However, ransomware can affect any company, regardless of size or industry."

Restating the Law

Boston partner Michael Aylward was featured in the American Law Institute's latest newsletter discussing his experience as an Adviser on the controversial Retatement of Law, Liability Insurance.

The Next Big Thing

The Alaska Supreme Court will hear oral argument this week as to whether a trial court erred in dismissing a lawsuit brought by a group of young people who claim that the State’s public policy of fostering fossil fuel development is endangering the climate and affecting their future.

New Coverage Litigation

Continental Insurance filed suit against the Diocese of Buffalo on October 3 seeking a declaration that policies that it allegedly issued during the 1970s do not cover allegations that the Diocese concealed and facilitated sexual abuse for decades.