A February 13, 2013 decision from the U.S. District Court for the Southern District of Illinois clarifies the line between the uninsured business risks of a public entity, and true covered “loss” or “damages.”

Public entities issue fines, charge fees, set utility rates and levy taxes. When citizens challenge these activities and seek the return of money, the line between insured “loss” or “damages” and the uninsured business risk of the city can often be blurred. Recently, the U.S. District Court for the Southern District of Illinois clarified that the return of fines and fees charged by a city do not typically give rise to covered “damages.” This decision, OneBeacon Am. Ins. Co. v. City of Granite City, No. 12-CV-00156-DRH-DGW, 2013 WL 556533 (S.D. Ill. Feb. 13, 2013), as well as related cases, are discussed below.

We highlight four decisions from early 2013 discussing a broker’s fiduciary obligations, claims made and reported requirements, the scope of “professional services,” and the prior knowledge provision.

BatesCarey LLP is proud to announce five of its partners were recently selected by their peers as Illinois Super Lawyers in the insurance coverage category, as well as two attorneys selected by their peers as Rising Stars in insurance coverage!

Illinois Super Lawyers are selected by independent rating service, Thompson Reuters. Each year, the survey invites attorneys to nominate peers in their fields for consideration as a Super Lawyer. Nominees are then rated on 12 indicators of peer recognition and professional achievement, combined with independent research. BatesCarey LLP is proud to announce its 2013 Super Lawyers and Rising Stars in the category of insurance coverage.

Congratulations to Adam H. Fleischer, who recently conducted a seminar for over 250 insurance professionals from over 25 different companies on the topic of Primary v. Excess insurance issues.  The seminar, hosted by Swiss Re, addressed various drop-down issues discussed in Adam’s 35-page article on the topic.

The specific issues addressed in the seminar and article include the following:

1. Duty to Investigate: when does an insurer have to dig beyond the materials received from the insured? What types of obligations are courts placing on primary and excess insurers in terms of investigation obligations?
2. Does an excess insurer have a duty to defend when a primary insurer refuses to defend?
3. When a primary settles for less than its full limits, does an excess insurer have its excess obligations triggered?
4. When an excess insurer’s indemnity obligations are triggered, must the excess insurer indemnify the insured’s defense costs?
5. Does an excess insurer have to drop down and pay post-judgment interest on a large verdict, even when it was the primary controlling the whole defense?
6. When does an excess insurer have to pick up orphaned shares of an insolvent primary insurer?
7. Must an excess insurer drop down to pay defense or indemnity when there are earlier or later primary policies still available?
8. Excess v. Primary: What are an excess insurer’s rights to pursue a primary insurer for bad faith failure to settle?

If you are a client of BatesCarey LLP and would like a copy of Adam’s article or a presentation of these issues for your colleagues, please contact Adam any time at afleischer@BatesCarey.com.

Scott L. Carey spoke as part of an interactive forum presentation at the annual conference of the Railroad Insurance Managers Association in Chicago on September 19, 2012. The program was entitled  “We Can Settle Complex Claims Efficiently – Investigating the Frustrations of Working Through Large, Multilayered, Coinsured Losses.”

Robert J. Bates, Jr. attended an Insuralex meeting in London on November 8 and 9, 2012. BatesCarey LLP is a proud member of Insuralex, a global group of insurance lawyers with 20 member firms throughout the United States, South America and Europe.

In National Union Fire Ins. Co. of Pittsburgh, Pa. v. Mead Johnson & Co., the United States District Court for the Southern District of Indiana awarded summary judgment in favor of insurers on the issue of late notice. The court held that the insured’s notice of an underlying lawsuit seven weeks after a jury returned a $13.5 million verdict against the insured breached the notice provisions of the policy as a matter of law. The court held that the breach extinguished any potential for coverage under the policies.

Scott L. Carey and Matt M. Murphy were Planning Committee Members for Indiana Rail Road Company’s Railroad Liability Conference held July 11-13, 2012 at The Venetian in Las Vegas. Click here for more information.

On June 7, 2012, BatesCarey LLP hosted the summer meeting of Insuralex, a worldwide network of independent insurance and re-insurance representatives. The agenda included discussions on international maritime risks such as kidnap and ransom insurance, as well as U.S. bad faith issues, and the global impact of recent natural catastrophes.

Adam Fleischer was featured speaker at the Gen Re 2012 Claims Seminar in Stamford, Connecticut on June 19, 2012. Adam addressed “Excess and Primary Insurer Rights and Obligations: Who’s Making Who Drop Down and For What?” The topic included include: the extent of an insurer’s duty to investigate; an excess insurer’s obligation to drop down and defend; drop down obligations over an insolvent primary insurer; drop down obligations over properly or improperly exhausted primary coverage; and an excess insurer’s rights of equitable subrogation.