Insurance Coverage Disputes and Denials

Meta Platforms and BlackRock’s $14 billion Sopaipilla data center campus in El Paso, Texas reportedly carries only hundreds of millions of dollars in insurance. The Financial Times reported that losses above those caps would fall to the partners. Marsh & McLennan advised on the coverage structure, according to the report.

Aug 17

The Delaware Superior Court on Aug. 13, 2026 denied reconsideration sought by the ArcLight Entities in a coverage dispute. The court stood by its ruling that one company never actually requested a defense from its insurer. The decision says being named on an endorsement does not by itself trigger a duty to defend.

Aug 17

The Pennsylvania Supreme Court ruled last month that insurers cannot refuse to defend hotel owners and managers accused of enabling or profiting from sex trafficking of minors on public-policy grounds alone. The court said the duty to defend and indemnify is not erased when a policy is silent on the issue. It said insurers could have drafted exclusions but did not.

Aug 17

The Indiana Court of Appeals held that the Parsons’ claims against Crum & Forster are covered under the commercial general liability part of the primary policy. The court said it was not deciding whether the insurer ultimately owes indemnity because that issue was not ripe. The case returns to the trial court, which was instructed to deny both sides’ summary-judgment requests on indemnity.

Aug 14

The court denied Union Mutual’s motion for summary judgment in a dispute involving a New York commercial property owner. It found the policy ambiguous and said factual issues remained for trial. The ruling leaves the coverage dispute unresolved.

Aug 12

Domestic policies may leave many mid- to large-size U.S. businesses uninsured, underinsured, or improperly insured for multinational exposures. The article says complex risks can create coverage gaps when companies operate across borders.

Aug 10

The Michigan Supreme Court’s July 31, 2026, Eli Lilly decision narrowed the scope of an exemption under the Michigan Consumer Protection Act. The court said the key question is whether a specific transaction or conduct is authorized by law, not whether an entire category of activity is regulated. The case was remanded to circuit court for application of that standard.

Aug 13

A February 1995 opinion in United States v. Hardy found an express indemnity agreement between Dow Coming and Tri-City Industrial Services. The court ruled that the agreement covered both liquid and solid waste, lasted until April 1968, and included CERCLA liability.

Aug 11

The Illinois Supreme Court held that government-authorized emissions are still “pollution” for purposes of a standard commercial general liability pollution exclusion. In Griffith Foods v. National Union Fire Insurance Co. of Pittsburgh, the court said a permit or regulation authorizing emissions has no relevance to applying the exclusion. The ruling involved ethylene oxide emissions from a medical-equipment sterilization facility in Illinois.

Aug 12

Florida business interruption coverage after a hurricane usually requires direct physical damage from a covered peril before lost income benefits begin. The coverage may pay for a shutdown tied to wind damage, but flood and storm surge often require separate flood insurance. Policies also may include hurricane deductibles of 2% to 5% of insured property value and waiting periods before payments start.

Aug 11

Commercial claim handling depends on early documentation, written communications, and close review of policy deadlines. The guidance says insurers in Minnesota and Illinois must reference the policy language when denying a claim, and notes that Texas and Colorado impose time limits for claim decisions. It also warns that business interruption coverage often has a capped period of restoration.

Aug 11

Liquor liability is a standard exclusion in the ISO commercial general liability form for businesses that manufacture, distribute, sell, serve or furnish alcohol. That creates a double exposure for breweries, including taprooms, and requires separate liquor liability coverage or an endorsement. A 3,000-barrel brewery with a taproom typically pays $22,000 to $48,000 a year for a full program.

Aug 6

The Seventh Circuit reversed part of a ruling that had favored Consolidated in a coverage dispute with Northland. The district court had awarded $115,000 after finding a conflict of interest that entitled Consolidated to independent counsel at Northland's expense. The appellate court reversed the breach of contract and declaratory relief rulings and affirmed judgment for Northland on the section 155 claim.

Aug 5

A client alert said insurers are increasingly adding exclusions for generative AI to commercial general liability policies. ISO form CG 40 47 01 26 excludes bodily injury, property damage, and personal and advertising injury arising out of generative AI, with related endorsements reported effective in January 2026. The alert urged businesses to review AI use, policy wording, vendor contracts, and incident response plans at renewal.

Aug 6

Hunton’s insurance coverage team won an appellate ruling for St. John’s University and Hofstra University in a dispute over United Educators’ refusal to defend or indemnify COVID-19 remote-learning class actions. The decision reaffirmed that an insurer must defend the entire lawsuit when the allegations create a reasonable possibility of covered loss, even if some claims are not covered.…

Aug 4

A U.S. District Court in Pennsylvania ruled that a CGL policy did not require a defense in a suit over an overserved patron who was later sexually assaulted by a third party. The court found the liquor liability exclusion barred coverage because the injuries arose from alcohol service, and the assault-and-battery endorsement did not apply because the attack was not committed by an insured. It also rejected the insured’s bad faith claim and granted summary judgment for the insurer.

Aug 4

A Berkshire Hathaway insurance unit was spared additional defense costs beyond a $100,000 limit in New Jersey. The case arose from a 2023 lawsuit by a day-spa patron who said an employee sexually assaulted her during a massage. A federal court held the policy’s abuse-or-molestation exclusion unambiguously barred coverage. The ruling applied to the underlying litigation and ended the insurer’s obligation for more defense spending.

Aug 5

A legal analysis of two appellate decisions said courts continue to limit insurers’ efforts to avoid coverage through exclusions and public policy arguments. The Pennsylvania Supreme Court in Samsung Fire & Marine Insurance Co. v. RI Settlement Trust rejected an exclusion the insurer had not written into the policy. The New Jersey Appellate Division in Caliciotti v. Progressive Garden State Insurance Co.…

Jul 31

U.S. Rep. Ashley Hinson introduced the Health Insurance Transparency for Patients Act on Tuesday. The Iowa Republican’s bill would require health insurers to publicly report denial rates, appeal overturn rates, decision timelines and treatments subject to prior authorization. It would also mandate consumer-friendly reporting so patients and employers can compare plans. The proposal still needs committee review and passage by both chambers of Congress.

Aug 5

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…

Jul 31

Vermont Mutual Insurance Co. is off the hook for a coverage dispute brought by a clinical social worker accused of using her position at a hospital to improperly access and publish patient files for her ex-husband and his current wife regarding their in vitro fertilization treatments. Carrie Holmquist Stanley's conduct wasn't covered because of a business exclusion in her homeowners policies issued by Vermont Mutual spanning September 2020 to September 2024, according to a July 31 ruling by…

Aug 3

The 4th U.S. Circuit Court of Appeals remanded a coverage dispute involving a Virginia Beach nightclub and its commercial general liability insurer. The nightclub settled the underlying models’ advertising lawsuit for $155,000 and assigned its policy rights, but the court said the district court must first decide whether the declaratory judgment action became moot. The panel declined to reach the duty-to-defend and indemnify issues until the jurisdictional question is resolved.

Jul 29

Mealey's reported several insurance disputes, including a Sixth Circuit rehearing fight over fire coverage, a Texas reinsurance-broker case tied to Vesttoo losses, and a Pennsylvania suit over $40 million in D&O coverage for opioid litigation. It also reported appeals over bad faith, disability income benefits, and coverage for an embryo storage lab. The item lists multiple separate cases rather than one story.

Jul 24

A New York federal court ruled that Scottsdale Insurance Co. had no duty to defend or indemnify an insured nursing facility under an employee benefits liability policy. The underlying dispute was a $1.6 million hospital reimbursement lawsuit tied to an alleged error about a former employee’s health-benefit eligibility. The court said it was a payment dispute, not a covered claim for negligent benefits administration.

Jul 22