Photo of Anna Schaffner

Anna represents insurers in connection with coverage issues and disputes arising under professional liability and general liability insurance policies.

The New York Supreme Court, Appellate Division has held that, under New York Insurance Law § 3420(a)(5), an insurer had no duty to defend or indemnify a personal injury action where the insured failed to provide notice of the claim during the policy period or extended reporting period, as required by the claims-made-and-reported policy.  Certain Underwriters at Lloyd’s London Subscribing to Policy No. PGIARK01449-05 v. Advance Transit Co., 2020 WL 6731791 (N.Y. App. Div. Nov. 17, 2020).

Continue Reading New York Insurance Law Does Not Preclude Enforcement of Claims-Made-and-Reported Policy’s Notice Requirements

An Illinois appellate court has held that an underlying action involving a fee dispute was not a claim involving professional services and was not covered under a professional liability policy.  RLI Ins. Co. v. Acclaim Res. Partners, LLC, 2020 WL 5548318 (Ill. App. Ct. Sept. 16, 2020).  The court further held that the underlying action’s conclusory allegations of “professional negligence” did not trigger coverage because the allegations were unsupported by the alleged facts.

Continue Reading Illinois Court Holds Fee Dispute Does Not Involve Professional Services

Applying Kentucky law, a federal district court has held that a subpoena issued to an insured company was not a “Claim” under a D&O policy’s Side B coverage because the subpoena failed to identify an “Individual Insured.”  Springstone, Inc. v. Hiscox Ins. Co., 2020 WL 4506097 (W.D. Ky. Aug. 5, 2020).  The court also held that no coverage was available to the entity because coverage was barred by an exclusion for any Claim “seeking fines or penalties or non-monetary relief against the Company.”

Continue Reading Government Subpoena Issued to Insured Company Not a “Claim” Against Individual Insured

Applying Iowa law, a federal district court has held that an insurer did not act in bad faith when denying coverage for expenses relating to an ERISA lawsuit because the claim turned on an unsettled question of Iowa law.  Telligen, Inc. v. Atlantic Specialty Ins. Co., 2020 WL 3399916 (S.D. Iowa Apr. 16, 2020).

Continue Reading Insurer Did Not Act in Bad Faith by Denying Coverage for Claim that Turned On Unsettled Question of Law

Applying North Carolina law, the United States Court of Appeals for the Fourth Circuit has held that a False Claims Act (“FCA”) suit against an insured for allegedly submitting false Medicaid reimbursement claims fell within an errors and omissions policy’s coverage grant for “damages resulting from a claim arising out of a medical incident.” Affinity Living Grp., LLC v. StarStone Specialty Ins. Co., 2020 WL 2630845 (4th Cir. May 26, 2020).
Continue Reading Fourth Circuit: FCA Suit Alleging False Medicaid Reimbursement Claims “Arises out of a Medical Incident” under North Carolina Law

Applying North Carolina law, the United States District Court for the Eastern District of North Carolina has held that an insurer did not breach its D&O policy by denying coverage for (i) a putative class action complaint that did not name the insured company; (ii) a subpoena duces tecum served on the insured in connection with the class action that did not satisfy the policy’s definition of “Claim;” (iii) a settlement that the insured was not required to participate in and to which the insurer did not consent; and (iv) a written indemnification demand implicating the policy’s contractual liability exclusion.  Trialcard Inc. v. Travelers Cas. & Surety Co. of Am., 2020 WL 1609483 (E.D.N.C. Apr. 1, 2020).  The court further held that any “Claim” asserted against the insured would otherwise be barred by the policy’s professional services exclusion.

Continue Reading Suit Against “Doe” Defendant is Not a “Claim”

The Wisconsin Court of Appeals has held that a “known loss” provision in an E&O policy barred coverage for a lawsuit filed against an insured because the lawsuit previously was threatened in a cease and desist letter that the insured received almost four years earlier.  Vistelar, LLC v. Cincinnati Specialty Underwriters Ins. Co., 2020 WL 891017 (Wis. Ct. App. Feb. 25, 2020).

Continue Reading “Known Loss” Provision Bars Coverage for Lawsuit Threatened in Pre-Policy Period Cease and Desist Letter

In a matter of first impression, the Delaware Superior Court has adopted the “larger settlement rule” to govern allocation of settlement amounts where (i) a settlement resolves, at least in part, insured claims; (ii) the parties cannot agree as to the allocation of amounts attributable to covered versus non-covered claims; and (iii) the policy’s allocation provision does not prescribe a specific allocation method.  Arch Ins. Co. v. Murdock, No. N16C-01-104 (Del. Super. Ct. Jan. 17, 2020).

Continue Reading Delaware Adopts Larger Settlement Rule

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).

Continue Reading Obligation to Timely Report Claim Applies Even if Claim Appears to Have Been Abandoned

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).

Continue Reading No EPL or D&O Coverage for Intra-Corporate Shareholder Dispute