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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 District Court for the Western District of Texas, applying Texas law, has held that a legal malpractice insurer was not liable for a statutory bad faith claim by the insured law firm because the evidence presented a bona fide coverage dispute, not a bad faith denial of the request for a defense.  Ryan Law Firm v. New York Marine & Gen. Ins. Co., 2020 WL 5820531 (W.D. Tex. Sept. 30, 2020).

Continue Reading Malpractice Insurer Not Liable for Bad Faith for Rejecting Settlement Demand Within Limits

The New York Supreme Court, Appellate Division, applying New York law, has held that an Insured v. Insured exclusion (IvI Exclusion) in a D&O policy did not bar coverage for an action brought by a creditor trust against former directors and officers (D&Os) of a bankrupt company, because the suit fell within the scope of an exception for claims brought by certain bankruptcy-related entities. Westchester Fire Ins. Co. v. Schorsch, 2020 WL 4905056 (N.Y. App. Div. Aug. 20, 2020).

Continue Reading Insured v. Insured Exclusion Held Not to Bar Action Brought by Creditor Trust

The United States District Court for the Northern District of West Virginia, applying West Virginia law, has held that an insurer had no duty to defend or indemnify its insured because two exclusions and the definitions of “damages” and “claim” each separately precluded coverage of a claim for a client’s lost settlement funds under the lawyer’s professional liability policy.  ALPS Prop. & Cas. Ins. Co. v. Murphy, 2020 WL 4141987 (N.D. W. Va. July 20, 2020).

Continue Reading No Coverage under Lawyer’s Professional Liability Policy for Client’s Lost Settlement Funds

The United States District Court for the District of North Dakota, applying North Dakota law, has held that a commingling exclusion precluded coverage for an insured’s controller’s theft of funds under the property management company’s errors and omissions policy.  Campbell Prop. Mgmt., LLC v. Lloyd’s Syndicate 3624, 2020 WL 1846985 (D.N.D. Apr. 10, 2020).

Continue Reading E&O Coverage for Embezzlement Precluded by Commingling Exclusion

A federal district court, applying South Dakota law, has held that a contractual liability exclusion barred coverage for breach of contract damages, including an award of consequential damages in the form of lost profits.  Employers Mut. Cas. Co. v. Brant Lake Sanitary Dist., 2020 WL 1275294 (D.S.D. Mar. 17, 2020).

Continue Reading Breach of Contract Exclusion Applies to Lost Profits Award

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).

Continue Reading “May” and “Might” are Sufficiently Clear and Unambiguous to Support Rescission Claim

The Supreme Court of Vermont has held there is no coverage for breach of contract and intentional torts under an errors and omissions (E&O) liability policy, where all counts of the complaint rested on allegations that the insured used misrepresentations and falsehoods to undermine a competitor, which did not fall within the definition of “professional services” under the policy.  Integrated Tech., Inc. v. Crum & Forster Specialty, 2019 WL 3759175 (Vt. Aug. 9, 2019).

Continue Reading No E&O Coverage for Breach of Contract and Intentional Torts

The United States District Court for the Central District of California, applying California law, has held that there is no coverage for a False Claims Act settlement where the insured company’s alleged wrongful acts took place outside the policy period and were independently barred from coverage by a contract exclusion, prior acts exclusion and regulatory exclusion. Office Depot Inc. v. AIG Specialty Insurance Co. No. 2:15-cv-02416 (C.D. Cal. June 21, 2019).

Continue Reading Three Separate Policy Exclusions and Wrongful Acts Outside the Policy Period Bar Coverage for California False Claims Act Lawsuit