Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Category Archives: Public Policy prohibition on insurance

Subscribe to Public Policy prohibition on insurance RSS Feed

Lack of Prior Knowledge of Claim a Condition Precedent to Coverage

Posted in Prior Knowledge/Warranty Exclusion, Public Policy prohibition on insurance
The United States District Court for the District of West Virginia, applying West Virginia law, has held that lack of prior knowledge of a claim constitutes a condition precedent to coverage under an accountant’s professional liability policy.  Camico Mutual Ins. Co. v. Hess, Stewart & Campbell P.L.L.C., 2017 WL 926770 (S.D. W. Va. Mar. 8,… Continue Reading

No Coverage for California False Claims Act Suit

Posted in Public Policy prohibition on insurance
A California federal district court has granted an errors and omissions liability insurer’s motion for summary judgment that it had no duty to defend a suit against its insured alleging violations of the California False Claims Act (CFCA), holding that the underlying suit created no potential for coverage and that there was no reasonable expectation… Continue Reading

Court-Appointed Receiver Acts “On Behalf Of” Court, Barring Application of Insured v. Insured Exclusion

Posted in Insured v. Insured Exclusion, Public Policy prohibition on insurance
The United States District Court for the District of Rhode Island, applying Rhode Island law, has held that an insured v. insured exclusion in a directors and officers liability insurance policy does not apply to a court-appointed receiver because the receiver acts as an agent of the court under Rhode Island law, rather than on… Continue Reading

Settlement of Class Actions for Allegedly Withheld Profits Not Disgorgement

Posted in Defense Costs, Loss, Public Policy prohibition on insurance
Applying New York and Delaware law, the Superior Court of Delaware has held that a retirement benefits provider’s settlement of three class actions seeking payment of alleged profits did not constitute disgorgement and was insurable under the provider’s professional liability policies.  TIAA-CREF Individual & Institutional Servs. LLC v. Illinois Nat’l Ins. Co., 2016 WL 6534271… Continue Reading

Restitution for Criminal Acts Uninsurable Under Pennsylvania Law

Posted in Dishonesty Exclusion, Loss, Public Policy prohibition on insurance
The U.S. District Court for the Middle District of Pennsylvania, predicting Pennsylvania law, has held that restitution for criminal acts is uninsurable as a matter of public policy. Darwin Nat’l Assurance Co. v. Luzerne Cty. Transp. Auth., 2016 WL 1242283 (M.D. Pa. Mar. 30, 2016). The court accordingly found that criminal proceedings against a public… Continue Reading

Dentist’s Alleged Sexual Misconduct Not Covered Under EPL Policy

Posted in Consent to settle/incur defense costs, Notice of Claim, Public Policy prohibition on insurance, Wrongful Act
In a victory for Wiley Rein’s client, a Florida federal court has held that an employment practices liability policy that provided coverage for “harassment” did not cover a licensing action arising out of a dentist’s alleged sexual misconduct. Turbyfill v. Scottsdale Indem. Co., No. 3:14-cv-283 (N.D. Fla. Feb. 24, 2016). The court also noted that… Continue Reading

Insurer Failed to Show Claims Were Not Interrelated; Not Entitled to Summary Judgment for Suit Seeking Disgorgement

Posted in Defense Costs, Personal Profit/Advantage exclusion, Public Policy prohibition on insurance, Related Claims and associated exclusions, Wrongful Act
A Texas intermediate court of appeals has held that an insurer was not entitled to summary judgment where the insurer contended that a claim brought by a bankruptcy plan agent (i) did not allege a wrongful act, and (ii) was not made within the policy period because it did not relate back to claims made… Continue Reading

Indiana High Court Holds Settlement of Managed Care Organization Multi-District Litigation Is Covered under E&O Policies

Posted in Bad faith/duty to settle, Dishonesty Exclusion, Loss, Professional Services, Public Policy prohibition on insurance
The Indiana Supreme Court, applying Indiana law, has held that the settlement of a multi-district litigation, which alleged that the insured managed care organization had engaged in a scheme of systematically failing to pay claims by medical providers in full and in a timely manner, fell within the insuring agreement of the organization’s E&O policy… Continue Reading

Delaware Trial Court: “Final Adjudication” Exclusion Trumps “No Loss” Argument

Posted in Loss, Personal Profit/Advantage exclusion, Professional Services, Public Policy prohibition on insurance
A Delaware trial court has concluded that a qui tam settlement was a covered “Loss,” declining to decide whether the settlement constituted uninsurable restitution.  Gallup, Inc. v. Greenwich Ins. Co., 2015 WL 1201518 (Del. Super. Ct. Feb. 25, 2015).  The court also held that a professional services exclusion did not bar coverage.  The court did… Continue Reading

Civil Theft Award Not Covered by D&O Policy or CGL Policy

Posted in Breach of Contract – coverage for amounts due pursuant to contract, exclusions, Loss, Personal Profit/Advantage exclusion, Public Policy prohibition on insurance
A federal court in Florida has held that neither a D&O insurer nor a CGL insurer has a duty to indemnify the policyholder for a final judgment award that includes treble damages for civil theft.  Twin City Fire Ins. Co. v. CR Technologies, Inc., 2015 WL 1055382, (S.D. Fla. Mar. 11, 2015).  In so holding,… Continue Reading

Repayment of Improperly Received Funds May Constitute Covered Loss; Coverage is Not Precluded on Public Policy Grounds

Posted in Loss, Public Policy prohibition on insurance
A Pennsylvania federal court, applying Pennsylvania law, has held that the relief sought in connection with the repayment of funds paid to a charter school may constitute covered “loss” under the E&O policy issued to a charter school and did not constitute “tuition expenses,” which were carved out of the definition of “loss.”  Peerless Insurance… Continue Reading