As reported in Law360, Lowenstein Sandler’s Insurance Recovery Group is representing pharmaceutical company Catalent, Inc. in a suit against insurance companies Chubb Group Holdings, Inc. and its subsidiary Illinois Union Insurance Co. currently pending in the U.S. District Court for the District of New Jersey, seeking $6.5 million in outstanding defense costs and $1.3 million in indemnification related to a multibillion-dollar arbitration dispute over the manufacture of a drug intended to treat COVID-19.

Catalent’s complaint alleges that Chubb has wrongfully withheld insurance proceeds despite having previously acknowledged it was obligated to cover the underlying claim, constituting a breach of the policy that has resulted in significant damages.

The dispute arises from an agreement between Catalent and Romark Global Pharma in 2020 to manufacture an antiviral medication for COVID-19, which led to a dispute and eventual arbitration.

Under the policy’s plain language, Chubb was required to reimburse all covered defense costs in excess of Catalent’s $2 million self-insured retention, up to the $10 million policy limit. Chubb has paid only a portion of defense, vendor and expert fees, and has refused to fund the arbitral award entered against Catalent.

Catalent “asserted that the insurer refused to pay its counsel's already discounted rates, failing to consider market standards for qualified counsel capable of defending the high-stakes arbitration,” according to Law360.

The Lowenstein team includes Lynda A. Bennett, Heather Weaver, and Daniel W. Borneman.