“Insurance neutrality” is a common law bankruptcy standing doctrine that bars insurers from interjecting in chapter 11 plan proceedings. However, as James P. Bobotek and Andrew V. Alfano explain in “The ‘Insurance Neutrality’ Doctrine is Heading to SCOTUS,” in an appeal of the Fourth Circuit’s decision in Kaiser Gypsum, the Supreme Court will determine “[w]hether an insurer with financial responsibility for a bankruptcy claim is a ‘party in interest’ that may object to a Chapter 11 plan of reorganization.”
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Federal Court Finally Issues an Opinion Analyzing LEG 3 (and It’s a Win for Policyholders)
The London Engineering Group’s LEG 3 exclusion—one of three standard form provisions issued by the London Engineering Group addressing coverage arising from construction or design defects—is an increasingly common defects exclusion found in Builder’s Risk and other policies covering projects under construction. LEG 3 is popular due to its reputation in the industry as providing the broadest form of cover available and excluding only “improvements.” Insureds typically accept additional premiums and/or higher deductibles in order to obtain this provision in their policies.
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Harvard’s Broker Fight Shows Active Risk Management Is Key
This summer, the courts dealt Harvard University a brutal one-two punch.
First, in June, the U.S. Supreme Court ruled against Harvard in the Students for Fair Admissions lawsuit—bringing nearly a decade of expensive litigation to a close by gutting affirmative action practices in student admissions.
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PFAS Insurance Coverage: The Policyholder’s Roadmap to Recovery
On November 15, 2023, join PFAS Insurance Recovery Taskforce members Tamara Bruno and Scott Greenspan for “PFAS Insurance Coverage: The Policyholder’s Roadmap to Recovery.”
During this PLI event, Tamara and Scott will explore the most significant court decisions on PFAS coverage issues, provide a guide to registrants on the major coverage issues raised by PFAS claims under legacy and current insurance policies, and offer strategies to policyholders for insurance recovery of PFAS claims.
To register, click here.
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Assessing D&O Coverage Amid Challenges to DEI Policies
In recent years, corporate directors and executives have faced challenges from conservative groups opposed to corporate diversity, equity and inclusion initiatives, with some efforts taking the form of shareholder litigation.
The U.S. Supreme Court’s recent decision overturning the use of affirmative action in university admissions provides new ammunition for these claims and is likely to embolden potential claimants.
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Say What You Mean: Delaware Court Finds Bump-Up Exclusion Ambiguous as Applied to Mergers Versus Acquisitions
Long a feature of directors’ and officers’ (D&O) liability insurance policies, the so-called “Bump-Up” Exclusion has gotten significant attention over the last few years. Because of the recent escalation in securities litigation that follows a majority of mergers and acquisitions, the Bump-Up Exclusion is of critical importance to publicly traded policyholders. Bump-Up Exclusion provisions are often found in a D&O policy’s definition of “Loss” and purport to exclude the amount of a settlement or judgment that represents an increase in the price paid to acquire an entity, where such consideration was alleged to be inadequate. A recent decision out of the Delaware state courts affirms again that D&O insurers will be held to the specific terms of their Bump-Up Exclusions.
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Heads I Win, Tails You Lose: Washington Supreme Court Rejects Insurers’ Efforts to Sell Illusory Insurance Coverage
Courts don’t look kindly upon insurance company shell games. In Preferred Contractors Ins. Co. v. Baker & Son Construction, the Washington Supreme Court slapped down an insurer’s attempt to manipulate the type of general liability “trigger” it wrote to sell coverage that was illusory.
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Ebasco Choice of Law: A Decision Half a Century in the Making
Following the breakup of large utility holding companies by trust busters in the 1930s, General Electric created Ebasco (Electric Bond and Share Company), a construction company and consultancy that, among other things, assisted newly independent utilities throughout the United States to obtain broad excess-level occurrence-based liability insurance policies. These so-called Ebasco policies were attractive to utility policyholders because of their comprehensive insuring agreement, modest exclusions (e.g., no pollution exclusions), and the absence of aggregate limits. Illustratively, a $10 million Ebasco policy potentially could pay up to 20 times its limits (equivalent to $200 million) to fund cleanup of 20 contaminated sites, assuming an occurrence at each site happened during the policy period. For decades, Ebasco policies, primarily underwritten by London market insurers, have been the subject of litigation related to pollution, asbestos and human health claims.
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Taking the Market’s Temperature on Coverage for Climate Change-Related Property Damage
Temperatures in Arizona this week reached over 110 degrees Fahrenheit. The water temperature in the Florida Keys was reported to reach sauna-like levels, threatening the life of habitat-sustaining coral. Atmospheric conditions are routinely blamed for violent storms and for wildfires that darken the skies.
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Insurance Implications of High Court Affirmative Action Ruling
For decades, affirmative action programs were implemented within educational institutions across the country with the stated goal of maintaining a diverse student body.
This practice was severely curtailed on June 29, when the U.S. Supreme Court issued a ruling in Students for Fair Admissions Inc. v. President and Fellows of Harvard College, striking down race-conscious admissions programs at Harvard University and the University of North Carolina at Chapel Hill as violating the Constitution’s equal protection clause and Title VI of the Civil Rights Act.