Insurance Law

Plaintiff filed a lawsuit alleging a breach of an insurance contract after the defendant insurance company denied plaintiff’s underinsured motorist claim on the grounds that he did not qualify as an insured under his employer’s commercial automobile insurance policy. The district court granted the defendant’s motion to dismiss for failure to state a claim and plaintiff appealed. The Seventh Circuit affirmed, finding that plaintiff, who was riding a bicycle, was not occupying a covered vehicle at the time of the accident and was not an insured for the purposes of liability coverage. (BRENNAN and KOLAR, concurring)

Plaintiff filed a declaratory judgment action seeking a declaration that an insurance policy it issued to the defendant did not cover claims related to damage to the defendant’s property by vandals. The insurance company alleged that the property was vacant and, as a result, was not covered under the terms of the policy. Defendant counter-sued and alleged that plaintiff denied the claim in bad faith. The district court found that the hotel was vacant as a matter of law as a sanction against plaintiff for failing to comply with discovery and granted summary judgment in favor of the defendant. The Seventh Circuit affirmed, finding that the sanction was an appropriate, proportionate response and was not an abuse of discretion. (EASTERBROOK and KIRSCH, concurring)

In an insurance coverage matter, the court considered whether the defendant insurance company had a duty to defend and indemnify the plaintiff in a lawsuit bought by individuals alleging that they were harmed by electromagnetic field radiation coming from the plaintiff’s power transformers. The Seventh Circuit affirmed the district court’s grant of summary judgment in favor of the insurance company, explaining that a coverage exclusion of “any form of radiation” included the EMF radiation alleged in the underlying lawsuit. (RIPPLE and PRYOR, concurring)