There may be coverage for the terrorism-produced carnage in El Paso and Dayton under a recent ruling in a bad faith and coverage case by a federal appeals court. In Universal Cable Prod's, LLC v. Atlantic Spec. Ins. Co., 929 F.3d 1143 (9th Cir. 2019), the federal appellate court held that covered terrorism under an insurance policy was not excluded by a "war actions" exclusion. The appellate court remanded to the trial court for proceedings on the coverage claims and on the bad faith claims at bar.
More precisely as to the main coverage issue, the court held that an organization known for its violence was not a sovereign state the warlike actions of which would be excluded under an exclusion for "'warlike action by a military force' by a 'government, sovereign, or other authority.'” Instead the terrorist's actions were covered terrorism under the liability insurance policy at bar.
The appellate court applied California law to interpret the insurance policy at issue but relied on federal decisions from New York to reach this ruling. As California and New York go, so goes the coverage nation?
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