Should an insurer be allowed to pursue a federal action for declaratory judgment on its duty to defend where the insured has failed to cooperate in numerous underlying state actions against it? The Fifth Circuit decided the district court erred in staying the declaratory judgment action and allowed the federal case to proceed simultaneously with the state cases. See
Duty to Cooperate
Default Judgment Against Insured Does Not Bar Injured Party from Pursing Coverage Case
By Tred R. Eyerly on
A default judgment against the insured should not deprive the injured party from pursuing the coverage litigation according to the Ninth Circuit's decision in Westchester Fire Ins. Co. v. Northwest Airlines, Inc., No. 07-17383, 2009 U.S. App. LEXIS 23718 (9th Cir. Oct. 28, 2009).
The insured provided maintenance services for Northwest Airlines at…
Timeliness of Insurer’s Disclaimer Raises Issue of Fact
By Tred R. Eyerly on
If an insured fails to cooperate with the insurer's attempt to defend, what must the insurer do to disclaim coverage? In Continental Casualty Co. v. Stradford, 2008 N.Y. LEXIS 3387 (N.Y. Ct. App. Nov. 25, 2008), the court considered whether the insurer's disclaimer to an uncooperative insured was timely.
The insured was a dentist …
Duty to Cooperate – How Far Does it Extend?
By Tred R. Eyerly on
A liability policy typically requires the insured to cooperate with the insurer. Under the provision, the insured must, among other things, cooperate with the insurer in investigating or settling of the claim. Breach of the cooperation clause by the insured relieves the insurer of liability under the policy. But the insurer must show…