Wednesday, December 23, 2009

United States District Court holds that uncertainty over insurance policy terms does not create duty to defend

My next several posts will discuss Whittaker Corp. v. Am. Nuclear Insurers, __ F.2d __ (D. Mass. 2009), 2009 WL 4342512, in which historical owners of property sought insurance coverage for their costs associated with the property being declared a superfund site.

One of the issues was whether Endorsement 112, which would have excluded coverage, was properly added to the insurance policy. In a previous decision the court had held that pending the resolution of that factual question, the insurer, ANI, had a duty to defend. On a motion to reconsider, to his credit Judge Stearns reversed that ruling:

This ruling put the cart before the horse by conflating the duty to defend with the existence of coverage in the first place. Before a court can determine whether a policy imparts a duty to defend, an applicable policy must be identified.

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