While the pandemic has disrupted the courts across the country, it has not interfered with the flow of important coverage decisions in the first six months of 2020. In addition to the cases cited in a recent Law360 article, a number of other decisions of note have come down that deserve the attention of every coverage attorney.
Reservation of Rights
In Selective Way Insurance Co. v. MAK Services Inc., the Superior Court of Pennsylvania estopped the insurance company from denying coverage based on its failure to investigate, as evidenced by a boilerplate reservation of rights letter that did not cite to a controlling exclusion. The insurance policy at issue contained an exclusion for snow and ice removal, which stated that the insurance did not apply to claims arising out of snow and ice removal activities.
MAK was sued for negligence in removing snow and ice from a parking lot. Selective appointed defense counsel to represent MAK, and sent a boilerplate reservation of rights letter that did not mention the exclusion. The letter advised MAK that the claim was potentially covered, that defense counsel was being appointed and that MAK had the right to retain private counsel. The letter also instructed MAK not to discuss the case with anyone "other than your attorney or a properly identified representative of Selective." The letter also contained a general reservation of rights under the policy.
Eighteen months later, Selective sued MAK for a declaration that it did not owe coverage because of the snow and ice removal exclusion. The trial court awarded judgment to Selective, and the appellate court reversed....