Reservation of Rights: Sapienza v Liberty Mutual (USDC S. Dakota 2019)

Partner Laura Gregory recently posted:  The U.S. District Court in South Dakota recently issued a decision involving an insurer’s handling of a defense under reservation of rights, invoking the draft Restatement of Liability Insurance, and dismissing bad faith claims against the insurer for allegedly “hindering” the defense and for taking the position that the cost of compliance with the court’s injunction was not property damage under the policy and was not covered.  The Court went on to certify a question to the South Dakota Supreme Court regarding whether the cost to comply with an injunction (here the demolition and rebuilding of the insured’s home) was covered “property damage”.