Insurance Law

Defendant insurer waived its policy defenses for uninsured motorist coverage, by extending coverage to couple and their minor son, who were in car accident with uninsured motorist. Record clearly shows that Defendant insurer told couple that it was "granting coverage" under its policy. Defendant insurer never told couple that, although it was not liable under the policy, it was willing to nevertheless settle their claims to avoid further dispute.  The grant of coverage transformed defendant insurer's conduct unambiguously into a waiver of its policy defenses.(SCHOSTOK and ZENOFF, concurring.)

Court erred in finding Illinois Municipal League Risk Management Association had no duty to defend or indemnify City in underlying suit filed against it by Regional Transportation Authority (RTA). RTA alleged its claim against City arose from a "tax kickback scheme" between City and Oil Company, seeking statutory remedies per Section 8-11-21 of Municipal Code and damages and equitable relief, seeking compensation by City for sales tax proceeds it claims it should have received but were never collected by Oil Company. Policy exclusion for the issuance, collection, or management of tax proceeds  does not apply, as RTA is asking City to make RTA whole for taxes never collected by Company. (HARRIS and APPLETON, concurring.)

Plumbing company, which was hired by cement company to install a trash pump, obtained insurance policy from Plaintiff insurer, which listed cement company as an  additional insured for any vicarious liability attrributable to cement company due to plumbing company's negligence. Court properly found that Plaintiff insurer had no duty to defend cement company as an additional insured in negligence action filed by plumbing company's employee, because underlying suit alleged only direct negligence by cement company, and did not allege any negligent act by plumbing company.  Court properly refused to consider cement company's third-party complaint to create a duty for insurer to defend it based on vicarious liability. (CARTER and HOLDRIDGE, concurring.)

Plaintiff foundations filed suit against their former insurance broker for loss of defense coverage under foundations' D&O liability insurance policy.  Court erred in interpreting exclusion by failing to see it as ambiguous. Clause "any other provision. . . used to impose liability" is ambiguous, as it is susceptible to more than one reasonable interpretation. Thus, clause to be strictly construed against the insurer, and narrow construction of clause is the most plausible.(JORGENSEN and HUDSON, concurring.)

Defendant insured properly demanded arbitration by sending a letter to his insurer, under underinsured motorist provision of Defendant's car insurance policy.  Nothing else was required of Defendant to "commence" the arbitration, and thus his right to seek arbitration was not barred by 3-year limitations provision in the policy. Policy language makes it clear that selection of arbitrator was not mandatory, so that selection of arbitrator was not necessary to "commence" the arbitration. (McBRIDE and COBBS, concurring.)

Court properly granted summary judgment for Defendant insurer of concrete subcontractor, and denied cross-motion for summary judgment filed by Plaintiff insurer of carpentry subcontractor, in declaratory judgment action involving coverage for worker injured at construction site.16-month delay, from time that injured worker filed underlying action against construction company to when Plaintiff insurer received actual notice of suit and its counsel filed appearance on behalf of its insured, was unreasonable as a matter of law.  Construction company (Defendant in underlying suit) tendered notice to other insurers within 1 month after their insureds were named as Defendants in underlying case. Judicial estoppel applies to statements of fact and not to legal opinions or conclusions.  As construction company's untimely notice barred coverage under Defendant insurer policy, Plaintiff insurer was not entitled to seek contribution from Defendant insurer for the $1 million that it paid in settling underlying action. (LIU and CONNORS, concurring.)

Clause in umbrella policy that made its coverage apply only after exhaustion of limits of all applicable "insurance and self insurance" is unambiguous and enforceable.  Plaintiff Municipal Association's contract with Village qualifies as self-insurance within meaning of other insurance clause in umbrella policy. Public policy does not make contract unenforceable. (PIERCE and HYMAN, concurring.)