Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Category Archives: Bad Faith

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Fee Exclusion Bars Coverage for Overdraft Fee Settlement

Posted in Bad Faith, Exclusions
Applying Mississippi law, the United States Court of Appeals for the Seventh Circuit has held that an exclusion in a bankers’ professional liability policy barred coverage for class claims alleging that the insured bank wrongfully maximized overdraft fees charged to its customers.  BancorpSouth, Inc. v. Federal Ins. Co., 2017 WL 4546144 (7th Cir. Oct. 12,… Continue Reading

Bankers’ Professional Liability Policy Excludes Overdraft Fee Litigation From Coverage

Posted in Bad Faith, Exclusions
The United States District Court for the Southern District of Indiana, applying Mississippi law, has held that a bankers’ professional liability insurance policy did not cover a class action suit against a bank alleging that it wrongfully maximized overdraft fees charged to its customers.  Bancorpsouth, Inc. v. Federal Ins. Co., 2017 WL 373300 (S.D. Ind.… Continue Reading

No Action Clause Does Not Bar Insured’s Duty to Defend/Bad Faith Claims Against Insurer

Posted in Bad Faith
The United States District Court for the Western District of Oklahoma has held that, under Oklahoma law, a policy’s “no action” clause does not apply to an insured’s breach of contract claims against its insurer premised on a breach of the duty to defend the underlying claim.  Wilbanks Securities Inc. v. Scottsdale Ins. Co., 2016… Continue Reading

Insured Stated Claim for Breach of Contract and Bad Faith Against Claims Administrator

Posted in Bad Faith
Applying California law, the United States District Court for the Southern District of California has held that a policyholder stated a claim against the claims administrator for a policy because the plaintiff had pleaded a plausible factual allegation that the claims administrator issued the policy, which was sufficient to survive a motion to dismiss.  Reno… Continue Reading

Insurer that Rejected Exception from Release Language Liable for Bad Faith Failure to Settle Despite Offering Policy Limits

Posted in Bad Faith, Bad faith/duty to settle, Consent to settle/incur defense costs
A California intermediate appellate court has held that an insurer is liable for bad faith failure to settle, even though it had made a timely offer to settle for its full policy limits, where the insurer declined to agree to release terms proposed by the claimants to which the insured refused to agree. Barickman v.… Continue Reading

Employee Stock Ownership Plan Participant Cannot Pursue Fiduciary Breach and Bad Faith Claim Against Insurer of Plan’s Fiduciaries

Posted in Bad Faith
Applying Mississippi law, a federal district court has held that a participant in an employee stock ownership plan cannot pursue his claims against the insurer of the plan fiduciaries because those claims were previously released in a settlement agreement between the plan fiduciaries and the insurer. Sealey v. Beazley Ins. Co. Inc., et al., 2016… Continue Reading

Seven-Month Delay Constitutes Late Notice as a Matter of Law

Posted in Bad Faith, Defense Costs, Notice of Claim
A Minnesota federal district court has held that an insurer was entitled to summary judgment in a breach of contract suit brought by its policyholder after the insurer denied coverage because the policyholder failed to provide notice of the suit “as soon as practicable” in accordance with the terms of the policy. Food Market Merch.,… Continue Reading

Insurer Did Not Breach Duty to Defend Where it Refused to Defend Insured’s Husband and Marital Community

Posted in Bad Faith, Defense Costs
The United States District Court for the Western District of Washington, applying Washington law, has held that insurers did not breach their duty to defend where they refused to provide a defense for an insured’s husband and marital community.  Staheli v. Chicago Ins. Co., 2016 WL 2930444 (W.D. Wash. May 19, 2016).  The court also… Continue Reading