Applying California Law, the United States District Court for the Southern District of California has held that an insurer must pay defense costs contemporaneously, even where the policy’s advancement provision merely requires payment “prior to final disposition of a claim,” because the insured became legally liable for defense costs as they were incurred.  Renovate Am., Inc. v. Lloyd’s Syndicate 1458, 2019 WL 6716735 (S.D. Cal. Dec. 10, 2019).  The court further held that the insured was excused from obtaining the insurer’s prior written consent regarding defense arrangements given the insurer’s seven-month delay in responding to the insured’s initial notice.

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In a win for Wiley Rein’s client, the United States District Court for the Southern District of Florida, applying Florida law, held that, as a matter of law, a lawsuit against an engineer arising out of three alleged errors in connection with a construction project constituted a single “claim” under the engineer’s claims-made-and-reported architects and engineers policies. Nova Southeastern Univ., Inc. v. Continental Cas. Co., No. 18-CIV-61842-RAR (S.D. Fla. Dec. 27, 2019).  Furthermore, the court held that the policies’ prior knowledge and prior notice provisions separately and independently barred coverage for the lawsuit.

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Applying Ohio law, a federal district court has held that misrepresentations in an application warranty statement regarding three unreported lawsuits filed against the insured during the initial policy period rendered a renewed claims-made and reported policy void ab initioCertain Underwriters at Lloyds London Subscribing to Policy No.  HMPL 18-0164 & HMPL 17-0158 v. KG Admin. Servs., Inc., 2019 WL 6770061 (N.D. Ohio Dec. 12, 2019).  The court also held that, because the claims were not reported during the initial policy period, the insurer did not have any coverage obligations under the initial policy.

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Applying California law, a federal district court has rejected an insured law firm’s argument that the terms “may” and “might” as used in connection with an application question regarding knowledge of potential claims are ambiguous and unenforceable.   Am. Alternative Ins. Corp. v. Warner, 2019 WL 6493945 (N.D. Cal. Dec. 3, 2019).

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Applying Illinois Law, the United States District Court for the Northern District of Illinois has held that an insurer had no duty to defend a claim reported more than nine months after the end of the policy period.  Wesco Ins. Co. v. Elements Architectural Grp., Inc., 2019 WL 5725440 (N.D. Ill. Nov. 5, 2019).

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Applying Ohio law, an Ohio appellate court has held that renewal of a claims-made policy does not extend the time by which an insured may report a claim.  ISCO Indus., Inc. v. Great Am. Ins. Co., 2019 WL 6353709 (Ohio Ct. App. Nov. 27, 2019).  The court further held that the “notice prejudice” rule does not apply because coverage under a claims-made policy is generally restricted to claims made and reported during the policy period.

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This article was originally published in Law360

In Sanders v. Illinois Union Insurance Company, the Supreme Court of the State of Illinois resolved a split in state and federal decisions applying Illinois law on trigger of coverage in the context of wrongful incarceration.[1]

According to the Illinois Supreme Court, the City of Chicago Heights’ insurers had no coverage obligation under policies in effect when the claimant was retried for murder and exonerated, two decades after the initiation of the prosecution. As a result, Illinois law on trigger of coverage for wrongful incarceration lawsuits is now on all fours with decisions by courts nationwide.


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An Illinois intermediate appellate court has held that an exclusion for claims arising from “unfair or deceptive business practices” including “violations of any local, state or federal consumer protection laws” did not bar coverage against an insured property manager for alleged violations of a city residential landlord-tenant ordinance.  Evergreen Real Estate Servs., LLC v. Hanover Ins. Co., 2019 WL 5704599 (Ill. App. Ct. Nov. 4, 2019).

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In a win for an insurer represented by Wiley Rein, the United States District Court for the District of Maryland has held that an intra-corporate dispute between shareholders was not covered under an EPL insuring agreement because the underlying demand letter and complaint did not state a claim “for” an Employment Practices Wrongful Act, and it was not covered under a D&O insuring agreement because the claimant owned 10% or more of the outstanding shares of the insured company at the time the claim was made.  Madison Mechanical, Inc. v. Twin City Fire Ins. Co., 2019 WL 6035690 (D. Md. Nov. 14, 2019).

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