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.


Continue Reading Ill. Ruling Clarifies Wrongful Incarceration Insurance Triggers

This article was originally published in Law360 on July 10, 2019.

In a long-running insurance coverage dispute, the United States Court of Appeals for the Fifth Circuit recently issued a decision addressing trigger of coverage in the context of three wrongful convictions in Travelers Indemnity Co. v. Mitchell.


Continue Reading 5th Circ. Insights On Wrongful Conviction Insurance Coverage

Applying Texas law, the United States Court of Appeals for the Fifth Circuit has held that an insured law firm’s dispute with its clients about the scope of the firm’s contingency fee award did not involve covered Loss.  John M. O’Quinn, P.C. v. Lexington Ins. Co., 2018 WL 5075485 (5th Cir. Oct. 18, 2018).

Continue Reading Law Firm’s Dispute Over Contingency Fee Does Not Involve Covered Loss

A New York appellate court has held that a $140 million disgorgement payment by an insured broker-dealer to the U.S. Securities and Exchange Commission does not constitute insurable loss even though the payment did not disgorge the insured’s own ill-gotten gains, but rather those of its customers.  J.P. Morgan Secs. Inc. v. Vigilant Ins. Co., 2018 WL 4494692 (N.Y. App. Div. Sept. 20, 2018).

Continue Reading Disgorgement of Profits Realized by Insured’s Customers is a Penalty, Not Insurable Loss

Applying Michigan law, the United States Court of Appeals for the Sixth Circuit has held that an insured had prior knowledge of a potential claim following a letter from an investor demanding compensation for losses and threatening legal action.  Alterra Excess & Surplus Co. v. Excel Title Agency, 2018 WL 3599597 (6th Cir. July 26, 2018).

Continue Reading Prior Knowledge Exclusion Does Not Require Absolute Certainty of Future Claim

In a win for Wiley Rein’s client, a Louisiana federal district court has held that an insurer has no duty to defend an attorney in an investigation that sought only sanctions, the return of legal fees, and other non-covered relief.  Andry Law Group, LLC v. CNA Fin. Corp., 2018 WL 3642003 (E.D. La. Aug. 1, 2018).

Continue Reading Investigation Seeking Sanctions and Return of Fees Sought No Covered “Damages”

A Montana federal district court has held that an insurer was estopped from invoking a policy’s arbitration clause where the insurer had breached its duty to defend by improperly relying on a creditor exclusion in the policy.  Am. Trucking & Transp. Ins. Co. v. Nelson, 2018 WL 1902700 (D. Mont. Apr. 20, 2018).

Continue Reading Insurer Cannot Invoke Arbitration Clause Following Breach of Duty to Defend

An Arizona federal district court has held that an insurer is entitled to an award of approximately $1.1 million in attorneys’ fees incurred in successful coverage litigation with an insured.  11333, Inc. v. Certain Underwriters at Lloyd’s, London, 2018 WL 1570236 (D. Ariz. Mar. 30, 2018).

Continue Reading Insurer Entitled to Coverage Litigation Attorneys’ Fees Under Arizona Statute

In a win for Wiley Rein’s client, a Puerto Rico federal district court has held that a policy’s broadly worded specific litigation exclusion bars coverage for a series of lawsuits, regulatory investigations, and arbitrations filed against the insured because the matters all involve facts, situations, or circumstances alleged in the claims listed in the exclusion.  UBS Financial Servs. Inc. v. XL Specialty Ins. Co., No. 3:15-cv-3099 (D.P.R. Feb. 1, 2018).

Continue Reading Specific Litigation Exclusion Bars Coverage for Puerto Rico Mutual Fund Suits and Arbitrations

Applying Florida law, a federal district court has held that a prior knowledge exclusion bars coverage for a claim against an insured attorney where the attorney knew, prior to applying for the policy, that he had failed to meet his client’s expectations for the representation.  David R. Farbstein, P.A. v. Westport Ins. Co., 2017 WL 3425327 (S.D. Fla. Aug. 9, 2017).

Continue Reading Prior Knowledge Exclusion Bars Coverage for Claim Against Insured Attorney