The United States Court of Appeals for the Eighth Circuit, applying Arkansas law, has affirmed a ruling in favor of an insurer holding that there was no coverage for a claim made during one policy period but not reported until the following policy period. Pine Bluff Sch. Dist. v. Ace Amer. Ins. Co., 2020 WL 768772 (8th Cir. Dec. 28, 2020). In addition, the court ruled that the doctrines of waiver and estoppel were inapplicable because the claims-made issue went to the scope of coverage, which could not be changed by waiver or estoppel.
Continue Reading No Coverage for Lawsuit That Related Back to Claim Made During Prior Policy Period

Applying California law, the Ninth Circuit held that an excess insurer may challenge the allocation of an underlying settlement that resolves both an underlying claim against an insured and the insured’s coverage dispute with the primary insurer. Scottsdale Ins. Co. v. Certain Underwriters at Lloyds., 2020 WL 7419261 (9th Cir. Dec. 18, 2020). The court further held that a primary insurer is not entitled to equitable contribution from an excess carrier if the excess carrier was not notified of the underlying claim until after the primary insurer denied coverage.
Continue Reading Ninth Circuit Holds that Excess Carrier May Challenge Allocation of Primary Carrier’s Settlement that Resolves Both the Underlying Claim and a Coverage Dispute

The United States District Court for the Western District of Washington, applying Washington law, has held that an insured’s late notice of a claim bars coverage, rejecting arguments that (i) coverage applied because the prior and pending litigation provision did not exclude coverage, (ii) the insurer could not relate a claim back to a prior claim to bar coverage, and (iii) the notice-prejudice rule applied. Faithlife Corp. v. Phila. Indem. Ins. Co., 2020 WL 7385722 (W.D. Wash. Dec. 16, 2020).
Continue Reading No Coverage for Employment Lawsuit Where Insured Failed to Notice Earlier EEOC Charges

Applying New York law, the United States District Court for the Southern District of New York has held that a joint venture between the insured and a capital-contributing partner constituted a “subsidiary” of the insured pursuant to the terms of its D&O policy. Scottsdale Ins. Co. v. McGrath, 2020 WL 7321503 (S.D.N.Y. Dec. 11, 2020).
Continue Reading Joint Venture Qualifies as a ‘Subsidiary’ Where Insured Holds Partial Economic Interest But 100% of Voting Rights

The United States District Court for the Southern District of New York, applying New York law, has concluded that, even though a grievance letter to an insured constituted a “Professional Claim” that was not timely reported, the insurer waived its late notice coverage defense by waiting seven months to deny coverage. Hunt Constr. Group, Inc. v. Berkley Assurance Co., 2020 WL 7046842 (S.D.N.Y. Nov. 30, 2020).
Continue Reading Insured Failed to Timely Report Grievance Letter as ‘Professional Claim,’ But Insurer’s Late Notice Denial Waived By Seven-Month Delay

The United States District Court for the Northern District of Ohio, applying Ohio law, has held that coverage for a retaliation claim under a claims-made directors and officers, employment practices, and fiduciary liability insurance policy was not barred by the insured’s failure to disclose a prior False Claims Act investigation on the application. SHH Holdings v. Allied World Specialty Ins. Co., 2020 WL 7385384 (N.D. Ohio Dec. 16, 2020).
Continue Reading Disclosure of False Claims Act Investigation Not Required by Policy Application Questions

The United States Court of Appeals for the Eighth Circuit, applying Minnesota law, affirmed a trial court’s decision that the prior acts exclusion in a directors and officers liability policy barred coverage for shareholder suits arising out of on an insured’s failure to disclose related-party transactions to the SEC before going public. Tile Shop Holdings, Inc. v. Allied World Nat’l Assurance Co., 2020 WL 7133358 (8th Cir. Dec. 7, 2020). The court concluded that the shareholder suits alleged Wrongful Acts that took place prior to the retroactive date or alleged acts that were the same or related to Wrongful Acts that occurred before that date.

Continue Reading Prior Acts Exclusion Bars Coverage for Shareholder Suits Based on Failure to Disclose Related-Party Transactions to SEC

The United States Court of Appeals for the Ninth Circuit, applying California law, affirmed a district court opinion finding no coverage under a directors and officers liability policy for a lawsuit brought against the insured pursuant to the California False Claims Act (“CFCA”) on the basis that coverage was barred by a contract exclusion. Office Depot, Inc. v. AIG Specialty Ins. Co., Case No. 19-55819 (9th Cir. Nov. 13, 2020). A summary of the district court opinion is available here.
Continue Reading Ninth Circuit Affirms Contract Exclusion Bars Coverage for False Claims Act Lawsuit

The United States District Court for the District of New Jersey, applying New Jersey law, has held that an insurer does not need to cover more than $480,000 that an insured transferred pursuant to fraudulent instructions. The court determined that the circumstances implicated an exclusion that precluded coverage for loss that arose out of the theft or misappropriation of funds. Authentic Title Servs., Inc v. Greenwich Ins. Co., 2020 WL 6739880 (D.N.J. Nov. 17, 2020).
Continue Reading No Coverage Under E&O Policy for Insured’s Loss of Funds Sent Pursuant to Fraudulent Instructions

Applying Nevada law, the Ninth Circuit has held that a professional liability insurer did not have a duty to defend or indemnify a doctor for a wrongful death action because the doctor’s guilty plea triggered an exclusion for willful violations of law.  National Fire & Marine Ins. Co. v. Hampton, 2020 WL 6158314 (9th Cir. Oct. 21, 2020).

Continue Reading Doctor’s Guilty Plea Establishes Basis for “Willful Violation” Exclusion from Coverage in Wrongful Death Case