The United States Court of Appeals for the Seventh Circuit, applying Illinois law, has held that common-law tort claims regarding errant faxes arose out of the Telephone Consumer Protection Act (TCPA) so as to trigger an exclusion in the relevant insurance policy.  Mesa Labs., Inc. v. Fed. Ins. Co., 2021 WL 1538230 (7th Cir. Apr. 20, 2021).  The Court held that because the tort claims arose out of the same conduct as the statutory claims, which were clearly barred by the exclusion, the exclusion applied to the entire underlying lawsuit, and there was no duty to defend.
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Continue Reading Common-Law Claims Associated with Unsolicited Faxes Held to be “Arising Out of” Violation of the TCPA

Applying Montana law, the Ninth Circuit Court of Appeals has held that a claim made during one claims-made policy period but not noticed until a second policy period was not covered under either policy. Capitol Specialty Ins. Corp. v. Big Sky Diagnostic Imaging, Inc., 2021 WL 1564349 (9th Cir. Apr. 21, 2021).  The court also ruled that the notice-prejudice rule does not apply to claims-made-and-reported policies when the claim is reported after the policy period.
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Continue Reading Ninth Circuit Holds Notice-Prejudice Rule Inapplicable to Claims-Made-And-Reported Policies

The United States District Court for the Southern District of New York has held that an insurer has a duty to defend its insured’s subsidiary in a class action lawsuit that alleges wrongful conduct that occurred prior to the parent’s acquisition of the subsidiary, rejecting the insurer’s argument that the policies’ “Related Acts” definition precluded coverage. Great Am. Ins. Co. v. AIG Specialty Ins. Co., 2021 WL 1268450 (S.D.N.Y. Apr. 6, 2021).…
Continue Reading Wrongful Acts Alleged in Class Action Based on Corporate Policy Are Not “Related Acts”

The Montana Supreme Court has held that there was no coverage under a lawyers professional liability policy for a client’s malpractice claim because the lawyer knew of and failed to disclose, prior to the insured law firm’s procurement of the policy, the sanctions and default judgment that were the bases of the client’s claim.  ALPS Prop. & Cas. Ins. Co. v. Keller, Reynolds, Drake, Johnson & Gillespie P.C., 2021 WL 688561 (Mont. Feb. 23, 2021).  The court also held that there was no coverage under the policy’s “innocent insured” provision, and that the common law “innocent insured” and “reasonable expectations” doctrines did not preserve coverage for other members of the insured firm.
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Continue Reading Prior Knowledge Provisions Barred Coverage for Malpractice Claim Based on Pre-Policy Sanctions and Default Judgment

Applying New York law, the United States District Court for the Southern District of New York has held that an SEC investigation of the insured company did not constitute a “Securities Claim,” where the term expressly excluded investigations.  Hertz Global Holdings, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 2021 WL 1198802 (S.D.N.Y. Mar. 30, 2021).  The court likewise held that the investigation did not constitute a “Claim” against Insured Persons, notwithstanding cooperation of former executives in the investigation.
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Continue Reading SEC Investigation of Company Not a “Claim” or “Securities Claim”

The United States District Court for the District of Delaware, applying Delaware law, has held that lawsuits alleging breaches of fiduciary duty did not constitute “Securities Claims” under a D&O policy.  Calamos Asset Mgt., Inc. v. Travelers Cas. & Surety Co. of Am., 2021 WL 663056 (D. Del. Feb. 19, 2021).
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Continue Reading Alleged Breach of Fiduciary Duty Not a “Securities Claim”

Applying the law of Mississippi, a federal district court held that coverage was unavailable under a claims-made policy for an underlying lawsuit because the lawsuit, which was filed after the expiration of the policy period, did not allege that the insured had provided legal services “for others” as required by the policy.  Blackburn Law Firm, PLLC v. Allied World Ins. Co., 2021 WL 817882 (N.D. Miss. Mar. 3, 2021).
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Continue Reading Lawsuit Filed After Expiration of Policy Period for Lawyer’s Negligent Drafting of His Own Trust Agreement Not Covered Under Claims-Made Professional Liability Policy

The Indiana Supreme Court, applying Indiana law, has held that an insured may be entitled to coverage for a ransom payment under a commercial crime policy if the circumstances of the attack “fraudulently caused” the insured to make the payment.  The court also held that the ransom payment resulted “directly” from the use of a computer.  G&G Oil Co. of Ind., Inc. v. Continental W. Ins. Co., 2021 WL 1034982 (Ind. Mar. 18, 2021).
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Continue Reading Indiana Supreme Court Revives Insured’s Case for Ransomware-Related Coverage Under Commercial Crime Policy

In a matter of first impression, a Kentucky appellate court held that the notice-prejudice rule does not apply to claims-made-and-reported policies.  Darwin Nat’l Assurance Co. v. Kentucky State Univ., 2021 WL 1045716 (Ky. Ct. App. March 19, 2021).
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Continue Reading Kentucky Court Holds That Notice-Prejudice Rule Does Not Apply to Claims-Made-And-Reported Policies

Answering a certified question regarding a matter of first impression, the Nevada Supreme Court has held that an insurer is entitled to reimbursement of defense costs expended in defense of an insured where a determination is made that the insurer owed no duty to defend and the insurer has clearly and expressly reserved the right to seek reimbursement in writing.  See Nautilus Ins. Co. v. Access Med, LLC, 2021 WL 936076 (Nev. Mar. 11, 2021) (en banc).
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Continue Reading Nevada Supreme Court Holds Insurer May Recoup Defense Costs