Introduction: Ten Most Significant Insurance Coverage Decisions Of 2013

It was a bonanza for policyholders in 2013. They cleaned-up in wins in significant insurance coverage decisions. The score resembled the outcome of a Harlem Globetrotters – Washington Generals game. The electoral map from Reagan’s 1980 win over Carter. A tennis match between me and Rafa. Policyholders did very well in my selection of the year’s ten most significant coverage decisions. I have policyholders taking seven out of ten (counting the ALI Principles as offering more for policyholders than insurers, discussed herein). What’s more, most of the cases that came close to being selected for the Top 10 list also favored policyholders.

And I’m not alone in my observation. A recent Law360 article, from Mary Calkins, Helen Michael and Carl Salisbury, of Kilpatrick, Townsend & Stockton, was titled “A Big Year For Coverage Rights.” But here’s the most telling part -- four out of five of the cases discussed in their article are ones that I did not include in my Top 10.

But insurers need not worry that this represents some sort of general judicial shift in favor of policyholders. The many significant decisions that policyholders won this year involved a host of unrelated issues from a wide range of courts. That being the case, the fact that so many big decisions went policyholders’ way is mere coincidence. The reality is that, when examining all issues, on a nationwide basis, insurers win more liability coverage cases than policyholders. I have no statistical proof that insurers do better than policyholders on an across the board basis. My conclusion is simply based on looking at a lot of cases. But I am going to try to prove this in 2014. [At least I have it on my to-do list, along with cleaning out the attic.]

I am thrilled to present my 13th annual look back at the year’s ten most significant insurance coverage decisions. As I always do at the outset, here is my description of the selection process (repeated from past years’ editions). The process is highly subjective, not in the least bit scientific, and is in no way democratic. But just because the selection process has no accountability or checks and balances whatsoever does not mean that it wants for deliberativeness. To the contrary, the process is very deliberate and involves a lot of analysis, balancing and hand-wringing. It’s just that only one person is doing any of this.

The selection process operates throughout the year to identify coverage decisions (usually, but not always, from state high courts) that (i) involve a frequently occurring claim scenario that has not been the subject of many, or clear-cut, decisions; (ii) alter a previously held view on an issue; (iii) are part of a new trend; (iv) involve a burgeoning or novel issue; or (v) provide a novel policy interpretation. Some of these criteria overlap. Admittedly, there is also an element of “I know one when I see one” in the process.

In general, the most important consideration for selecting a case as one of the year’s ten most significant is its potential ability to influence other courts nationally. That being said, the most common reasons why many unquestionably important decisions are not selected are because other states do not need guidance on the particular issue, or the decision is tied to something unique about the particular state. Therefore, a decision that may be hugely important for its own state – indeed, it may even be the most important decision of the year for that state – nonetheless will be passed over as one of the year’s ten most significant if it has little chance of being called upon by other states confronting the issue at a later time.

But the cases selected here differ. Many courts in coverage cases have no qualms about seeking guidance from case law outside their borders. It is routine--especially so when in-state guidance is lacking. The selection criteria operates to identify the ten cases most likely to be looked at by courts on a national scale and influence their decisions.

The year’s ten most significant insurance coverage decisions are listed in the order that they were decided.