Professional Liability Insurance
NY: Having Breached Duty to Defend, Liability Insurer May Not Cite Policy Exclusions to Escape Duty to Indemnify Insured for Judgment
New York’s highest court, the Court of Appeals, has held that, when a liability insurer has breached its duty to defend its insured, the insurer may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against the insured. The court ruled that an insurance company that had disclaimed its duty to defend, “may litigate only the validity of its disclaimer,” and stated that if “the disclaimer is found bad, the insurance company must indemnify its insured for the resulting judgment, even if policy exclusions would otherwise have negated the duty to indemnify. This rule will give insurers an incentive to defend the cases they are bound by law to defend, and thus to give insureds the full benefit of their bargain. It would be unfair to insureds, and would promote unnecessary and wasteful litigation, if an insurer, having wrongfully abandoned its insured’s defense, could then require the insured to litigate the effect of policy exclusions on the duty to indemnify”. Read More

Exclusions
Court Refuses to Dismiss Claim Seeking Coverage for Alleged Loss of Dozens of Pallets of Chemicals at Warehouse
A federal district court in Louisiana has refused to dismiss a complaint against an insurance company seeking coverage for the alleged loss of several dozen pallets of bulk chemicals from a warehouse, finding that three exclusions in the policy did not clearly bar coverage. Read More

Automobile Insurance
Health Care Provider Stated Claim against Insurer Based on Assignment of Benefits, Appeals Court Finds
A Colorado appeals court has reversed a trial court’s decision dismissing a health care provider’s suit against an insurer seeking payment of benefits assigned to the provider by a person who allegedly was injured by the insured. Read More

Health Insurance
U.S. Supreme Court Rejects Court Challenge to Arbitrator’s Decision that Doctor’s Contract with Insurer Provided for Class Arbitration of Disputes
In a unanimous decision, the U.S. Supreme Court has ruled that courts could not overturn a decision by an arbitrator that a contract between a physician and a health insurer provided for class arbitration of disputes. The case is Oxford Health Plans LLC v. Sutter, No. 12–135 (U.S. June 10, 2013).  Read More