Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Category Archives: Related Claims and associated exclusions

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Insured’s Failure to Provide Notice of Demand Letter Precludes Coverage for Related Lawsuit Noticed in Subsequent Policy Period

Posted in “Claim”, Notice of Claim, Related Claims and associated exclusions
A Washington federal court has held that an insured’s failure to provide notice of a demand letter to its insurer during the policy period in which the letter was received precludes coverage under a claims-made and reported policy for a related lawsuit filed during a subsequent policy period. National Union Fire Ins. Co. v. Zillow,… Continue Reading

Prior Acts Exclusion Bars Coverage for Suits Alleging Wrongful Conduct Spanning Prior Acts Date

Posted in Exclusions, Related Claims and associated exclusions
A Maryland intermediate appellate court has affirmed summary judgment in favor of an insurer, holding that a Prior Acts Exclusion applied to bar coverage for two antitrust lawsuits where the suits alleged that the insured conspired to raise prices beginning as early as 2002 and the Prior Acts Exclusion barred coverage for “Interrelated Wrongful Acts,… Continue Reading

Eleven Claims Arising Out of Negligently Repackaging Two Drugs Are “Related Claims”

Posted in Related Claims and associated exclusions
In a win for an insurer represented by Wiley Rein, the United States District Court for the Southern District of Florida, applying Florida law, has held that eleven claims by patients against a pharmacy and pharmacist for negligently repackaging two preservative-free drugs for injections by the same doctor to treat the same condition constituted “related… Continue Reading

Claims Not Related When Prior Demands Would Not Have Been Covered

Posted in “Claim”, Related Claims and associated exclusions
The Court of Appeal of Louisiana, applying Louisiana law, has held that a class arbitration claim that was covered under an errors and omissions policy was not “related” under the policy’s related claim provision to two earlier contractual demands for indemnity and workers compensation first made prior to the policy period.  Williams v. SIF Consultants… Continue Reading

Multiple Clients’ Claims Against Accountant Deemed Related and Subject to Lower Limit of Liability Due to Insureds’ Prior Knowledge of One Client’s Claim

Posted in Prior Knowledge/Warranty Exclusion, Related Claims and associated exclusions
The United States District Court for the District of South Carolina, applying South Carolina law, has held that multiple clients’ claims against an accountant and his former firm constitute a single claim under a professional liability policy because they are logically connected to the accountant’s loss of faculty from Parkinson’s disease.  CAMICO Mutual Insurance Co.… Continue Reading

Court Finds EEOC Charge and Subsequent Lawsuit to Be Two Separate Claims Under Claims-Made Policy

Posted in “Claim”, Related Claims and associated exclusions
The United States District Court for the Northern District of Illinois, applying federal and Illinois law, has found that an employment discrimination lawsuit was “first made” within a professional liability policy’s policy period despite the fact that the lawsuit’s required precursor, an Equal Employment Opportunity Commission (EEOC) charge, was filed before the policy period.  John… Continue Reading

Eleventh Circuit Finds Claims to be Related Even Though They Are Based on Different Legal Theories

Posted in “Claim”, Related Claims and associated exclusions
Applying Tennessee law, a federal appellate court has held that pre-policy demands and later-made claims were related notwithstanding the fact that the demands and claims may have relied on different legal theories.  Direct Gen. Ins. Co. v. Indian Harbor Ins. Co., 2016 WL 5437062 (11th Cir. Sept. 29, 2016).… Continue Reading

No Coverage for Claims Arising Out of Attorney’s Theft of Client Funds Before Policy Period

Posted in Dishonesty Exclusion, Personal Profit/Advantage exclusion, Prior Knowledge/Warranty Exclusion, Related Claims and associated exclusions
The United States District Court for the Middle District of Tennessee, applying Tennessee law, has held that an insurer had no duty to defend or indemnify an insured attorney for claims arising out of his theft from his clients’ estates because the attorney had knowledge of the theft and could reasonably foresee a claim before… Continue Reading

One Lawsuit Equals One Claim, Regardless of the Number of Causes of Action

Posted in Related Claims and associated exclusions
The United States District Court for the Eastern District of Pennsylvania has held that a lawyer’s professional liability policy’s per-claim limit of liability, rather than its aggregate limit of liability, applied to an underlying lawsuit because the suit’s multiple causes of action were all related and therefore constituted a single claim under the policy. Westport Ins.… Continue Reading

Fact Issues Regarding “Relatedness of Claims” Preclude Motion for Judgment on the Pleadings

Posted in Prior Knowledge/Warranty Exclusion, Related Claims and associated exclusions
The United States District Court for the District of Arizona has held that mere reference to a “pyramid scheme” in a prior lawsuit is insufficient to warrant judgment on the pleadings regarding the relatedness of a later claim alleging a pyramid scheme. Hanover Ins. Co. v. Vemma Int’l Holdings, Inc., 2016 WL 4059606 (D. Ariz.… Continue Reading

Related Claims Provision Does Not Conflict with Prior and Pending Litigation Exclusion

Posted in Related Claims and associated exclusions
A Florida federal court has held that a set of claims must be deemed first made at the time of the first such related claim in 2008, prior to the relevant policy period, notwithstanding the fact that a prior and pending litigation exclusion in the policies only excluded coverage for lawsuits brought prior to 2003.… Continue Reading

No Coverage for Related Claims Where Insured Received Third-Party Indemnification

Posted in “Claim”, Related Claims and associated exclusions
The United States District Court for the Southern District of Texas, applying Texas law, has held that an insurance broker is not entitled to coverage under its E&O policy because its former corporate parent already indemnified it for the settlement at issue. Southwest Risk LP v. Ironshore Specialty Ins. Co., 2016 WL 2898040 (S.D. Tex.… Continue Reading

Claim for Trademark-Infringing Telephone Scam Not Interrelated with Claim for Internet Scam

Posted in Allocation, Cooperation, Other: Trademark Exclusion, Related Claims and associated exclusions
The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, has held that a telephone marketing scam and an internet false advertising scam were not interrelated wrongful acts precluding coverage because the conduct behind the alleged wrongful acts was different. Connect America Holdings, LLC v. Arch Ins. Co., 2016 WL 1254073… Continue Reading

Coverage Barred For Hedge Fund’s Suit Against Insured Because Related to Prior Securities Class Action

Posted in Related Claims and associated exclusions, Wrongful Act
An Arizona intermediate appellate court, applying Arizona law, has affirmed a trial court’s rulings in favor of an insurer, holding that a lawsuit against the insured’s directors and officers was based in large part on the same or similar “wrongful acts” that were at issue in a previously filed securities fraud class action suit brought… Continue Reading

Seven Civil Lawsuits Constitute a Single Claim Subject to a Single Per-Claim Limit

Posted in Related Claims and associated exclusions
The United States District Court for the Central District of California has held that seven pending civil lawsuits, all of which alleged that the insured had participated in a fraudulent investment scheme, were logically and causally related such that they constituted a single claim subject to a single per-claim limit of liability. Liberty Ins. Underwriters,… Continue Reading

Environmental Claims Arose from Prior Orders and Deemed Not First Made During Relevant Policy Period

Posted in “Claim”, Related Claims and associated exclusions
A federal district court in Washington has held that an insurer had no duty to defend four environmental claims brought against an insured by state and federal agencies because the claims at issue were either first made prior to the policy period or fell within the scope of an exclusion barring coverage for claims related… Continue Reading

Court Dismisses Coverage Action Where Claims Were Made Before Policy Period and Barred by Prior and Pending Litigation Exclusion

Posted in Bad faith/duty to settle, Related Claims and associated exclusions
A California federal court has held that a professional liability policy does not afford coverage for claims against an insured individual, who was serving as executor of his father’s estate, by his stepmother because those claims related to earlier claims by the stepmother before the policy period. Cove Partners, LLC v. XL Specialty Ins. Co.,… Continue Reading

Ninth Circuit Finds “Related Wrongful Acts” Term is Unambiguous and Encompasses a Broad Range of Acts

Posted in Related Claims and associated exclusions, Wrongful Act
The United States Court of Appeals for the Ninth Circuit, applying California law, has held that a trial court properly interpreted a D&O policy’s “Related Wrongful Acts” provision in concluding that an insured was not entitled to coverage under two policies for twenty-seven lawsuits that followed the first claim noticed to the insurer. Previti v.… Continue Reading

Fourth Circuit Holds Two Lawsuits Involve Interrelated Wrongful Acts Constituting Single “Claim” Where Allegations Establish “Common Nexus of Fact”

Posted in Related Claims and associated exclusions
The United States Court of Appeals for the Fourth Circuit has affirmed a trial court’s determination that an adversary proceeding brought by a bankruptcy trustee and subsequent suit by the trustee to recover on the judgment rendered in the first proceeding involved “interrelated wrongful acts” because they involved a “common nexus of fact” linked by… Continue Reading

Specific Litigation Exclusion Bars Coverage for Condo Owners’ Second Lawsuit against Condo Association

Posted in Bad faith/duty to settle, Related Claims and associated exclusions
Applying New Jersey law, a New Jersey federal court held that a specific litigation exclusion barred coverage for a second lawsuit brought against a condominium association by the same condominium owners. The One James Plaza Condo. Assoc., Inc. v. RSUI Group, Inc., 2015 WL 7760179 (D.N.J. Dec. 2, 2015). In addition, the court held that… Continue Reading

Second Circuit Rejects Use of “Factual Nexus” Test for Related Claims Analysis

Posted in Related Claims and associated exclusions
The United States Court of Appeals for the Second Circuit has held, under New York law, that a related claims provision should be interpreted and applied pursuant to the “plain language” of the contract, rejecting the “factual nexus” test applied by the lower court. Nomura Holding Am., Inc. v. Fed. Ins. Co., No. 14-3789 (2d… 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