Insurance Coverage Disputes

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John H. Mathias, Jr., John D. Shugrue, Thomas A. Marrinson

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Insurance Coverage Disputes is a comprehensive, chronologically organized and clearly written guide to the issues that can arise at every stage of a coverage dispute, from the initial inquiry into whether a policy exists to complex questions of law, evidence, procedure and strategy.

The authors explain in detail all aspects of litigating insurance coverage disputes, including: the varieties of policies and coverage; obligations of policyholders and insurers; and the nuts and bolts of proving or disproving coverage, from pretrial motions through settlement. Topics include: case management; venue; parties; justiciability; discovery disputes and privileged documents; insurance policy interpretation and construction; bad faith and extra-contractual claims; and the trial itself.

You'll find out about coverage for asbestos, natural disasters, environmental liability, business torts, products liability, employment practices, business interruption, toxic torts, and many other timely topics. There is also a series of ready reference charts summarizing the controlling law of each of the fifty states and the District of Columbia on a number of key liability insurance issues.

Book #00638; looseleaf, one volume, 1,080 pages; published in 1996, updated as needed; no additional charge for updates during your subscription. Looseleaf print subscribers receive supplements. The online edition is updated automatically. ISBN: 978-1-58852-075-3

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  • Availability: Available
  • Brand: Law Journal Press
  • Product Type: Books
  • Edition: 0
  • Page Count: 1080
  • ISBN: 978-1-58852-075-3
  • Pub#/SKU#: 638
  • Volume(s): 1

Author Image
  • John H. Mathias, Jr.

John H. Mathias, Jr. is senior partner and head of the Insurance Coverage Litigation Group of the Chicago office of Jenner & Block, a national firm with offices in Chicago, Washington D. C., Los Angeles, New York, and Dallas. He has served as the Co-Chair of the Insurance Coverage Litigation Committee of the American Bar Associations Litigation Section. He is a veteran trial lawyer who has lectured and written frequently on developments in insurance law. In recent years, Mr. Mathias has counseled companies, directors, officers and risk managers on a wide array of complex insurance coverage and procurement issues in the context of securities fraud class actions. He is a graduate of Harvard Law School (1972) and Dartmouth College (1969).

Also by John H. Mathias, Jr.:
Directors and Officers Liability: Prevention, Insurance and Indemnification

Author Image
  • John D. Shugrue
Mr. Shugrue is a partner in the Chicago office of Reed Smith LLP and is a senior member of the firm's Insurance Recovery Group. He has extensive experience in complex insurance coverage litigation involving CGL, D&O, First-Party Business Interruption and E&O claims. He was Co-Chair of the ABA Section of Litigation's Insurance Coverage Litigation Committee from 1997-2000, and has served on the Section of Litigation's Federal Practice Task Force. He also co-chaired an American Bar Association Task Force that prepared the Manual for Complex Insurance Coverage Litigation. Mr. Shugrue writes and lectures frequently on a variety of insurance coverage issues, including Lloyd's and the London market, environmental and toxic tort insurance coverage, and Directors & Officers liability insurance. He graduated with honors from the University of North Carolina School of Law (1987) and the University of Denver (1984).

Author Image
  • Thomas A. Marrinson
Mr. Marrinson is a partner in the Chicago office of Reed Smith LLP. He has experience in a wide variety of insurance coverage disputes, including those involving coverage for professional liability, D&O liability, environmental cleanup, lead poisoning, and asbestos-related property damage claims. Mr. Marrinson frequently writes and lectures on numerous insurance coverage issues throughout the country. He is a graduate of UCLA School of Law (1989) and Columbia College (1986).

The Basic Types of Policies and Coverages

§ 1.01 Components of an Insurance Policy
[1] Declarations
[2] Insuring Agreement
[3] Exclusions
[4] Definitions
[5] Conditions
[6] Endorsements
§ 1.02 Other Evidence of Insurance
§ 1.03 Types of Insurance Policies
[1] Claims Made vs. Occurrence
[2] Primary vs. Excess
[3] Subscription/Participation Policies
[4] “Manuscript” Policies
[5] Fronting Insurance
[6] Retrospectively Rated Insurance
§ 1.04 Types of Coverages
[1] Comprehensive General Liability
[2] First-Party Property
[3] Directors’ & Officers’ (D&O) Liability
[4] Products Liability
[5] Errors & Omissions (E&O) Liability
[6] Fidelity/Dishonesty Coverage
[7] Professional Liability
[8] Environmental Impairment Liability (EIL)
[9] Employers’ Liability
[10] Kidnapping and Ransom (K&R)
[11] Mortgage Insurance
[12] Cyber Risk Insurance
[13] Coverage for Violations of Biometric Data Privacy Laws
[14] Coverage for Regulated Marijuana Businesses
[15] Drone Insurance

Duties of Policyholder and Insurer in Claims Submission and Handling

§ 2.01 Introduction
§ 2.02 Duties of Policyholder
[1] Duty to Provide Notice to Insurer
[2] Assistance and Cooperation
[3] Consent to Settlement
[4] Proof of Loss
[5] Suit Limitation Issues
§ 2.03 Duties of Insurer
[1] Investigate/Adjust
[2] Reservations of Rights/Disclaimers
[3] Claims-Handling Statutes
[4] Defense Obligation: Tripartite Relationship; Conflicts of Interest
[5] Duty to Inform Policyholder of Available Coverage
[6] Equitable Duties to Underlying Counsel

Preliminary Litigation Considerations

§ 3.01 Case Management
[1] Introduction
[2] Phasing, Bifurcating or Limiting the Case
[3] Timing of Different Types of Discovery
[4] Protective Orders/Non-Waiver Agreements
§ 3.02 Venue
[1] Introduction
[2] General Principles
[3] The Doctrine of Forum Non Conveniens
[4] Forum Non Conveniens in Insurance Coverage Cases
§ 3.03 Proper Parties
[1] Proper Plaintiffs
[2] Defendants and Others
§ 3.04 Justiciability Issues
§ 3.05 Litigation Considerations Regarding Insurer Insolvencies

Choice of Law Issues in Insurance Coverage Litigation

§ 4.01 Choice of Law Paradigms
[1] Traditional Choice of Law Approach: Vested Rights and Lex Loci Contractus
[2] Modern Choice of Law Approaches: Significant Contacts, Governmental Interests
§ 4.02 Applying Modern Choice of Law Paradigms in Insurance Coverage Litigation
[1] Focus on Insurance Policy Facts
[2] Focus on Loss/Liability Facts
[3] Focus on Public Policy
§ 4.03 Timing of the Choice of Law Determination


§ 5.01 Areas of Discovery
[1] Insurer’s Claim File
[2] Drafting History of the Policy
[3] Reinsurance Information
[4] Reserve Information
[5] Other Insureds, Other Claims
[6] Claims Handling and Underwriting Manuals and Guidelines
[7] Advertising and Marketing Materials
[8] Electronically Stored Information
[9] Insured’s Defense Counsel’s Files
§ 5.02 Discovery from Third Parties
§ 5.03 The Propriety of Ex Parte Contacts with a Policyholder’s Former Employees

Lost Policies

§ 6.01 Introduction to the Problem of Lost Policies
§ 6.02 Diligent Search and Absence of Bad Faith as Preconditions for Proving the Existence and the Terms of Lost Policies
§ 6.03 Proving the Existence and the Terms of Lost Policies
[1] Burden of Proof
[2] Standard of Proof
[3] Types of Secondary Evidence
§ 6.04 Use of Secondary Evidence in Practice
[1] Preponderance of the Evidence Standard
[2] Clear and Convincing Evidence Standard

Rules of Policy Interpretation and Construction

§ 7.01 Contract Interpretation Generally
§ 7.02 Insurance Policy Interpretation
[1] General Rules of Interpretation
[2] Use of the Doctrine of Contra Proferentem
[3] Contra Proferentem and the Sophisticated Insured
[4] Coverage Grants vs. Exclusions
§ 7.03 The Application and Limitations of the Parol Evidence Rule
[1] The Parol Evidence Rule
[2] The Practical Application of the Parol Evidence Rule
§ 7.04 Determining Ambiguity
[1] Defining Ambiguity
[2] Ambiguity and the Parol Evidence Rule
§ 7.05 Reasonable Expectations
§ 7.06 Estoppel

Establishing the Duty to Defend Under CGL Policies

§ 8.01 Standard for Determining
§ 8.02 Divisibility/Allocation
[1] Between Insurer and Insured
[2] Between and Among Insurers
§ 8.03 What Constitutes a “Suit”
[1] Discussion
[2] Chart: Duty to Defend: “Suit” Clause
§ 8.04 What Constitutes Defense Costs
§ 8.05 Consequences of Breach of Duty to Defend
§ 8.06 Terminating the Duty to Defend
[1] Exhaustion of the Policy Limit
[2] Discovery That There Is No Covered Claim

Establishing the Duty to Indemnify Under CGL Policies

§ 9.01 Standards for Determining
[1] Judgment
[2] Settlement
[3] Special Issues Involving Bankruptcy Code Section 524(g)
§ 9.02 “Damages” Covered
[1] Discussion
[2] Chart: “As Damages”
[3] Insurability of Liability for Punitive Damages
§ 9.03 Accident/Occurrence/Advertising Injury
[1] Accident Policies
[2] Occurrence Policies
[3] Event Policies
[4] Advertising Injury Coverage
§ 9.04 “Trigger” of Coverage
[1] Exposure
[2] Manifestation
[3] Continuous/Multiple
[4] Injury-in-Fact
[5] Product Liability Triggers
[6] Toxic Tort Coverage Claims
[7] Environmental Insurance Coverage Claims
[8] Chart: Trigger of Coverage
§ 9.05 Construction Defects
[1] In General
[2] The Insuring Agreement

Common Exclusions and Defenses to Coverage under CGL Policies

§ 10.01 Exclusions
[1] Pollution Exclusion
[2] Business Risks
[3] Owned Property/Alienated Premises
[4] War Risk and Terrorism Exclusions
[5] Contractually-Assumed Liability Exclusion
[6] Prior Publication Exclusion for Advertising Injury
[7] Failure to Conform with Advertisement
§ 10.02 Defenses to Coverage
[1] Known Loss/Loss-in-Progress
[2] Late Notice

Establishing Coverage Under Other Than CGL Policies and Special Provisions of CGL Policies

§ 11.01 First-Party Property Coverage
[1] Direct Physical Loss
[2] Covered Property
[3] Covered Cause/Peril
[4] “Trigger” of Coverage
[5] Conditions and Exclusions
[6] Business Interruption Coverage
[7] “Sue and Labor” Provisions
[8] First-Party Property Coverage for Mold-Related Property Damage
[9] The World Trade Center First-Party Property Insurance Litigation: A Case Study of the Hazards in Placement of a Multi-Layer Coverage Program
§ 11.02 Directors’ and Officers’ Coverage
[1] Components of a D&O Liability Policy
[2] Misrepresentations in the Application
[3] Common Exclusions
[4] Allocation of Settlement and Defense Costs
§ 11.03 Fidelity/Dishonesty Coverage
[1] Covered Loss
[2] Dishonest/Fraudulent Act
[3] Manifest Intent
[4] Causation
[5] Exclusions
§ 11.04 Environmental Impairment Liability (EIL) Coverage
[1] Pollution Incident/Environmental Impairment
[2] Trigger
[3] Primacy of EIL and CGL Coverage
[4] Exclusions
§ 11.05 Professional Liability Coverage
[1] Insuring Agreement
[2] When a Claim Must Be Reported
[3] Limits of Liability
[4] Potential Defenses to Coverage
[5] Insured’s Consent to Settlement
§ 11.06 Employment Practices Liability Insurance
[1] Covered Claims and Exclusions
[2] Coverage Under Other Types of Policies
[3] What Constitutes a “Claim”
[4] Selection of Counsel
[5] Public Policy Considerations and Limitations
§ 11.07 The Vendor’s Endorsement and the Manufacturer/Vendor Relationship

Bad Faith and Other Extracontractual Claims

§ 12.01 Bad Faith
[1] Historical Background
[2] The Implied Covenant of Good Faith and Fair Dealing
[3] Bad Faith Breach of the Duty to Settle Third Party Actions
[4] Bad Faith Conduct That May Prejudice the Policyholder’s Defense of an Underlying Action
[5] Bad Faith Litigation Tactics
[6] Bad Faith in the First Party Insurance Context
[7] Reverse Bad Faith
§ 12.02 Damages Available in Bad Faith Actions
[1] Excess Judgments
[2] Punitive Damages
[3] Consequential Damages
[4] Damages for Mental Suffering
[5] Attorney’s Fees
§ 12.03 Statutory Claims
[1] The Model Unfair Claims Settlement Practices Act
[2] Statutory Bad Faith Damages and Penalties
[3] Consumer Protection Statutes
§ 12.04 Equitable Remedies and the Doctrine of Reasonable Expectations
[1] Reformation and Rescission
[2] Adhesion and Unconscionability
[3] Estoppel
[4] Reasonable Expectations
§ 12.05 Broad-Based Leveraged Corporate-Owned Life Insurance
§ 12.06 Extracontractual Claims Relating to Contingent Commissions

Litigating Claims Against the London Market

§ 13.01 The London Market: What It Is and How It Functions
[1] Lloyd’s of London
[2] London Companies Market
[3] The Participation/Subscription Concept: Lead Underwriters and Following Market Underwriters
[4] The Role of “Lloyd’s Brokers”
§ 13.02 Litigating with the London Market: Some General Considerations
§ 13.03 Jurisdictional Issues
[1] Determining Diversity of Lloyd’s, London
[2] Removal to Federal Court of Lawsuits Against the London Market
§ 13.04 Special Discovery Issues Involving the London Market
[1] Discovery from Following Market Insurers
[2] Discovery of Attorneys’ Reports
[3] The Lloyd’s Underwriters Non-Marine Association (NMA)
§ 13.05 Insolvencies in the London Companies Market
§ 13.06 Negotiating Settlements with the London Market
[1] The Specialist Claims Unit (SCU)
[2] Equitas and the Equitas Claims Unit
[3] Effect of Insolvencies—Gross vs. Net

Trial of the Coverage Case

§ 14.01 Introduction
§ 14.02 Judge vs. Jury Issues
[1] Existence of Contract
[2] Lost or Missing Policies
[3] Meaning of the Policy
[4] Application of Policy Terms to Facts
§ 14.03 Phasing/Bifurcation
§ 14.04 Evidentiary Issues: The “Case Within a Case”
§ 14.05 Special Interrogatories vs. General Verdict Forms
§ 14.06 Allocation and Related Issues
[1] Discussion
[2] Chart: Allocation

Settlement of Coverage Claims

§ 15.01 General Considerations
§ 15.02 Types of Settlements
[1] Policy Buy-Back or Commutation
[2] Claim Release: Global or Specific
[3] Coverage in Place
§ 15.03 Issues Arising Out of Settlements and Settlement Agreements
[1] Nonsettling Insurers’ Rights to Setoff and Contribution
[2] Exhaustion of Underlying Limits
[3] Addressing the Impact of Settlements on Aggregate Limits and Retrospective Premiums
§ 15.04 Addressing Contribution Concerns in Settlement Agreements Through Use of Indemnity Provisions
§ 15.05 What to Include in the Settlement Agreement
[1] Parties Bound
[2] Policies Involved
[3] Scope of Release
[4] Reservation of Rights
[5] Effect of Settlement on Aggregate Limits and Retrospective Premiums
[6] Indemnity Provisions
[7] Confidentiality
[8] Definitions
[9] Integration
[10] Representations
[11] Choice of Law
§ 15.06 Arriving at Settlement: Arbitration, Mediation and Negotiation

Insurance Coverage for Claims Arising Out of Sexual Molestation

§ 16.01 Introduction
§ 16.02 Establishing Coverage
[1] CGL and Homeowner’s Policies
[2] Professional Liability Policies
§ 16.03 Avoiding Coverage
[1] Public Policy
[2] Exclusion of Intentional Conduct
[3] Sexual Molestation Exclusion
[4] Business Pursuits Exclusion