Homeowner’s Insurance
Criminal Acts Exclusion Bars Coverage of Claims that Homeowners’ Son Trespassed and Set Fires
A federal district court in Pennsylvania has ruled that a criminal acts exclusion in a homeowner’s policy excluded coverage for claims in a complaint alleging that the insureds’ son had trespassed on an association’s property and set fires that damaged its property, even though the complaint only asserted claims for negligence. The court ruled that it was “the alleged behavior, not the label attached to it,” that controlled. The case is Trustgard Ins. Co. v. Johnson, No. 12–2273 (E.D. Penn. June 12, 2013). Read More

Employee Benefits
Court Upholds Insurer’s Decision Denying AD&D Benefits where Insured Had 0.176 BAC and Tested Positive for Marijuana
A federal district court in Georgia has upheld an insurance carrier’s decision denying accidental death and dismemberment benefits for an insured who died in a motorcycle accident, where the insured had a 0.176 gm/dL blood alcohol concentration and tested positive for marijuana. The court ruled that a “reasonable person’s with the insured’s education and experience riding a motorcycle on the road on which he crashed “would know the dangerous effects that alcohol and marijuana would have on the ability to ride downhill towards a curve.” The case is Clark v. Life Ins. Co. of North Am., No. 1:12–cv–1977–TCB (N.D. Ga. June 18, 2013). Read More

Alternative Risk and Captives
May Courts Allocate Defense Costs Between Insurer and Insured for Periods of Self-Insurance under New York Law? Question Remains Unanswered
The U.S. Court of Appeals for the Second Circuit has affirmed a district court’s decision holding an insurer responsible for 100 percent of an insured’s defense costs, including for periods of self-insurance, finding it unnecessary to decide whether allocation was permitted under New York law. The case is Olin Corp. v. Century Indemnity Co., No. 11–4579–cv (2d Cir. June 18, 2013). Read More

Homeowner’s Insurance
Water Damage and Mold Claims Excluded from Coverage, Court Rules
A federal district court in Rhode Island has ruled that a homeowner’s insurance policy excluded coverage for alleged water damage caused by below-grade water seeping through the home’s foundation into the basement and for resulting mildew. The case is Emsbo v. Fireman’s Fund Ins. Co., No. CA 11–192L (D.R.I. June 19, 2013).  Read More