Hunton Insurance Recovery Blog

On January 9, 2018, the Northern District of California held that the Nonprofits Insurance Alliance of California owed defense coverage to a pair of Scientology-based drug and alcohol rehabilitation centers for two lawsuits filed in Georgia and Oklahoma alleging that staff members had provided drugs and alcohol to patients, which resulted in injury and death. In Western World Ins. Co. v. Nonprofits Ins. Alliance of California, No. 14-cv-04466-EJD (N.D. Cal. Jan. 9, 2018), the court confirmed the broad scope of an insurer’s duty to defend under California law and rejected the insurer’s attempt to unreasonably expand the application of a “professional services” exclusion to avoid coverage.

The interplay between primary and excess insurance is often litigated, especially in the context of settlements. On April 26, 2017, the First Circuit in Salvati v. Am. Ins. Co., 16-1403, 2017 WL 1488238, at *1 (1st Cir. Apr. 26, 2017) considered whether the settlement agreement entered into between plaintiff and the insureds/primary insurer was sufficient to trigger excess insurance coverage under the insured’s policy with American Insurance Company.