2013 was a year of triumph and tragedy for insurers. Positive financial results and the absence of domestic natural catastrophes such as Superstorm Sandy help to buoy the bottom line while the Marathon bombings in Boston and growing data concerning global warming raised the spectre of future uncertainty in underwriting risk. Disputes over the scope of coverage for construction claims and privacy suits continued to dominate coverage litigation, with legislatures taking a growing role in seeking to ‘reform’ policies to mandate coverage. And instead of the traditional lump of coal, insurers woke on Christmas morning to find a brace of opinions from Illinois and Wisconsin finding coverage for a load of manure. A fitting end to a strange year.

Here is a sampling of the most important rulings of the past year.

16.     Trinidad v. Florida Peninsula Ins. Co.,  (Fla. July 3, 2013). 

Florida Supreme Court ruled in this first party that because Section 627.7011 and the replacement cost policy in this case did not require the insured to actually repair the property as a condition precedent to the insurer’s obligation to make payment, the insurer was not authorized to withhold, pending actual repair, its payment for replacement costs. 

17.     Standard Mut. Ins. Co. v. Lay,  (Ill. May 23, 2013). 

Having previously ruled in Swiderski that junk fax claims trigger Coverage B, the Illinois Supreme Court has now ruled that lower courts erred in declaring that damages awarded pursuant to the federal Telephone Consumer Protection Act were uninsurable as a matter of public policy. 

18.     Bennett & Bennett Construction, Inc. v. Auto Owners Ins. Co.  (S.C. July 17, 2013). 

The state Supreme Court’s latest essay into the turbulent world of South Carolina construction litigation finds the court holding that a trial court erred in finding CGL coverage for a brick exterior surface that was damaged by improper efforts to remove and clean stains left by the insured in installing it as Exclusion J(5) unambiguously excludes coverage when the insured’s subcontractor damages the work product while performing operations, regardless of whether ‘your work’ is complete under the policy. 

19.    Donegal Mut. Ins. Co. v. Kelly,  (Pa. Super. August 5, 2013). 

 Pennsylvania’s intermediate appellate court ruled in this case that an auto insurer could sue coverage counsel based upon the lawyer’s failure to alert the carrier to an arbitration that resulted in the stacking of various UIM limits and a $2.2 million award that had resulted in bad faith claims against the insurer.

20.     Columbia Cas. Co. v. HIAR Holdings, LLC,  (Mo. August 13, 2013). 

In a lengthy opinion, the Missouri Supreme Court ruled not only that the receipt of a junk fax caused both “property damage” and ‘personal injury’ but further found that statutory penalties for such violations constituted “damages” under a CGL policy.

21.     Schinner v. Gundrun, Wis. July 12, 2013).   


A divided Supreme Court ruled that an assault that occurred as the result of underage drinking at a party organized by the insured did not result from an “occurrence” as “finding an occurrence and coverage under these circumstances would allow the host to escape responsibility for his intentional and illegal actions. We would be sending the wrong message about underage drinking parties, implying that whatever tragic consequences might occur, insurance companies will be there to foot the bill.”

22.     Economy Preferred Assurance Co. v. Western National Mut. Ins. Co.,  (Minn. App. November 25, 2013).  

Minnesota Court of Appeals declines to resolve a dispute between two auto insurers based on an ambiguity in a policy term, declaring that the principle of contra proferentum was intended to protect insured in disputes between the party who drafted the contract and the party to whom the contract was issued and therefore did not apply in disputes between two insurance companies who were not in contractual privity.

 23.   Bridgeview Healthcare Center, LTD v. State Farm Fire and Casualty Company  (Ill. App. June 19, 2013). 

While most courts have ruled that the forum state may apply its own law in the absence of any apparent conflict with another state’s law, the First District ruled here that the trial court erred in not undertaking an analysis of whether Indiana law would cover junk fax claims.  The court declared that “When the courts of one state have not spoken to an issue, their eventual resolution of the issue might conflict with the resolution reached in another state. If the forum applies its own law simply because the other interested jurisdictions have not spoken on the issue, the result of the case may well depend on the fortuitous circumstances that determine the forum.”

24.   Windmill Nursing Pavillion, Ltd. v. Cincinnati Ins. Co. (Ill App.. December 13, 2013). 

The Illinois Appellate Court ruled in this case that the attachment of a TCPA exclusion to a renewal policy satisfied Ohio notice requirements and that the insured’s rights to coverage for a TCPA settlement was limited to the general liability aggregate, rejecting the insured’s argument that junk faxes were the insured’s work or product so as trigger the policy’s PCOH aggregate limit.

25.     Mt. Hawley Ins. Co. v. Robinette Demolition, Inc., (Ill. App. July 26, 2013). 

The First District of the Illinois Appellate Court here rules that the requirement in CGL policy’s for notice of accidents and occurrences only applies to the named insured so that a putative additional insured’s failure to give notice until it was sued did not void its coverage.