Applying Texas law, the United States Court of Appeals for the Fifth Circuit has held that a prior knowledge condition did not relieve an insurer of its duty to defend where an underlying complaint made vague allegations of wrongdoing at an indeterminate time.  Allied World Specialty Ins. Co. v. McCathern, P.L.L.C., 2020 WL 933314 (5th Cir. Feb. 26, 2020).  The court found that the vague allegations could be construed to refer to conduct occurring after the date specified in the prior knowledge condition.

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The United States Court of Appeals for the Eleventh Circuit, applying Florida law, has affirmed a ruling that no coverage was available in connection with a criminal investigation where the insured failed to timely report a sealed affidavit that constituted a “claim” under the language of the policy at issue.  Crowley Maritime Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 2019 WL 3294003 (11th Cir. July 23, 2019).

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A Louisiana federal court has held that settlement of a False Claims Act investigation did not trigger the insuring agreement of a bankers professional liability policy because the claim was not made by a third-party client for acts in rendering or failing to render professional services.  Iberiabank Corp. v. Ill. Union Ins. Co., 2019 WL 585288 (E.D. La. Feb. 13, 2019).

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The United States District Court for the Northern District of Ohio has held that a bodily injury exclusion did not preclude coverage for a wrongful death suit, reasoning that the death did not cause the alleged wrongful conduct and therefore did not “arise out of” it.  Clarendon Nat’l Ins. Co. v. Lexington Ins. Co., 312 F. Supp. 3d 639 (N.D. Ohio 2018).  The court also held that the assault at issue was not “discovered” for purposes of triggering coverage until the underlying claimants learned of the alleged wrongful conduct at issue.

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The West Virginia Supreme Court of Appeals has reinstated a lawsuit seeking to rescind a doctor’s professional liability policy on the grounds that the insured made material misrepresentations in applying for the policy.  Admiral Ins. Co. v. Fisher, 2018 WL 2688182 (W. Va. June 6, 2018).  In reversing the trial court, the Supreme Court of Appeals noted that the insured omitted information concerning several patient overdose deaths in response to questions on the application for the policy.

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An Alaska federal court has held that a state court’s finding in the underlying litigation that an insured should have known of a potential claim by a date before inception of a policy collaterally estopped the insured from relitigating that issue in a coverage dispute concerning a prior knowledge provision.  ALPS Prop. & Cas. Ins. Co. v. Merdes & Merdes, P.C., 2018 WL 1278422 (D. Alaska Mar. 12, 2018).

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