Coverage Pointers - Volume XXVIII No. 4

This edition’s case from the Supreme Court of California considered whether an insured may state a viable cause of action for declaratory relief regarding coverage and liability under an excess insurance policy even if all of the underlying insurance coverage has not yet been exhausted. The court also held that an insured suing an excess insurer for tortious breach of the implied covenant of good faith and fair dealing does not have to allege the prior exhaustion of all underlying insurance. It is sufficient to allege facts that show coverage will attach and that the misconduct has impaired the recovery of benefits under the policy. ... - Court Finds Conflicting Terms in Policy May Alter Definition of “Bodily Injury”. ... An insurer relying on an exclusion must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case. Any ambiguity in an exclusionary clause must be construed against the insurer.