This month, our Insurance Update highlights pivotal provisions of the newly installed New Jersey Insurance Fair Conduct Act and looks at issues to consider as the statute moves forward as part of New Jersey’s bad faith law. This post also summarizes New York and Pennsylvania decisions regarding, respectively, a direct coverage action by plaintiffs seeking to recover on a judgment against John Varvatos Enterprises, Inc. and a coverage dispute on the scope of “Advertising Injury” under a commercial general liability policy.
New York - Management Liability Coverage - EPL Claim
The Southern District of New York in Knox, et al. v. Ironshore Ind. Inc. (S.D.N.Y. Dec. 10, 2021) dismissed a N.Y. Ins. Law § 3420(b) direct action coverage suit by an employee class that had obtained a judgment against John Varvatos Enterprises, Inc. based on discriminatory compensation practices. The opinion provides guidance in handling interrelated claims in the claims-made policy context.
New Jersey - Insurance Statutes and Regulation - UM/UIM Bad Faith
On January 18, 2022, New Jersey Governor Phil Murphy signed the New Jersey Insurance Fair Conduct Act (“IFCA”) into law, creating a statutory cause of action for bad faith in the context of an insurer’s handling and payment of uninsured and underinsured motorist (“UM/UIM”) claims. Here we examine the statute’s provisions and issues to consider going forward.
Pennsylvania - Commercial General Liability Coverage - Advertising Injury Claim
The Third Circuit in Vitamin Energy, LLC v. Evanston Ins. Co. (3d Cir. Jan. 5, 2022) found a commercial general liability insurer owed its insured, Vitamin Energy, LLC, a defense on the grounds that an underlying complaint filed by 5-hour Energy against Vitamin Energy stated “Advertising Injury” that was not otherwise excluded from coverage.