Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Category Archives: Breach of Contract

Subscribe to Breach of Contract RSS Feed

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

Posted in Breach of Contract, Professional Services, Wrongful Act
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… Continue Reading

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

Posted in Breach of Contract, Related Claims and associated exclusions, Wrongful Act
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… Continue Reading

Prior Favorable Coverage Determination is Evidence of Good Faith

Posted in Bad Faith, Breach of Contract
The United States District Court for the District of Nevada, applying Nevada law, has held that the court’s prior favorable coverage determination was evidence that an insurer did not act in bad faith when refusing to defend or provide coverage under a policy.  My Left Foot Children’s Therapy, LLC v. Certain Underwriters at Lloyd’s London,… Continue Reading

Contract Exclusion Bars Coverage for Demand for Cost-Overrun Payment

Posted in Breach of Contract, Defense Costs, Wrongful Act
The United States District Court for the Eastern District of California, applying California law, has held that no coverage is available for a demand for payment in excess of agreed purchase orders based on an exclusion barring coverage for loss “as a result of” a claim “for any actual or alleged obligation under . .… Continue Reading

Claims Arising out of Insured’s Contractual Obligation to Provide Employee Benefits Plans Are Not Because of a Wrongful Act

Posted in Breach of Contract, Wrongful Act
The U.S. District Court for the Southern District of California, applying California law, has held that neither fiduciary nor employment benefits liability coverage applied to claims seeking benefits under an insured company’s employee benefits plan because the company’s liability arose, not from negligent acts or breaches of fiduciary duty, but from its contractual obligation to… Continue Reading

Contract Exclusion Precludes Coverage for Breach of Health Management Service Provider Agreement

Posted in Breach of Contract
A Texas federal district court, applying Texas law, has held that a contract exclusion in an errors and omissions policy precluded coverage for a suit alleging that the insured breached a contract and committed related misconduct in connection with a contract for providing health management services to a client.  Conifer Health Solutions, LLC v. QBE… Continue Reading

Contract Exclusion Bars Coverage for Claims Arising from Asset Purchase Agreement’s Non-Compete Clause

Posted in Breach of Contract, Defense Costs, Wrongful Act
Applying North Dakota law, a federal district court has held that a contract exclusion contained in a directors and officers liability policy precludes coverage for claims arising from a non-compete clause in an asset purchase agreement.  Mau v. Twin City Fire Ins. Co., 2017 WL 4479731 (D.N.D. Oct. 3, 2017).  The court also held that… Continue Reading

No Coverage for Voluntary Remediation Because Insured Not “Legally Obligated to Pay” for Work

Posted in Breach of Contract, Loss
In a win for a Wiley Rein client, the United States District Court for the District of New Jersey, applying New Jersey law, held that no coverage was available under an errors and omissions policy for remediation work performed by an insured because the insured was not “legally obligated to pay” for the remediation.  Wyndham… Continue Reading

Contract Exclusion Applies Where Insured Assumes Liability of a Third Party

Posted in “Claim”, Breach of Contract
A federal trial court, applying California law, has held that coverage for three underlying lawsuits is not barred by a contract exclusion in a professional liability policy because applying the exclusion to any claim involving a contract would render the coverage illusory. Ironshore Specialty Ins. Co. v. 23andMe, Inc., 2016 WL 3951660 (N.D. Cal. July 22, 2016). According… Continue Reading

Federal Appellate Court Declares “Language of the Policy is King” in Affirming Application of Contract Exclusion

Posted in Breach of Contract, Breach of Contract – coverage for amounts due pursuant to contract, exclusions
The United States Court of Appeals for the Seventh Circuit has affirmed a trial court’s ruling that, under Illinois law, a contract exclusion applied to preclude coverage for a claim stemming from an insured’s failure to pay its contractor because all of the claimant’s causes of action arose from its contract with the insured. Altom… Continue Reading

Appeals Court Vacates Ruling that Breach of Contract Exclusion Barred Coverage, Remands for Consideration of Choice of Law

Posted in Breach of Contract, Professional Services
A New Jersey intermediate court of appeals has vacated and remanded a case in which the trial court held that an insurer had no duty to defend based on a breach of contract exclusion, because the appellate court could not determine whether the exclusion applied without a choice of law analysis. Pharmacy & Healthcare Commc’ns,… Continue Reading

Contract and Willful Acts Exclusions Do Not Preclude Duty to Defend Tortious Interference and Copyright Infringement Claims

Posted in “Claim”, Breach of Contract, Defense Costs, Professional Services
The United States District Court for the Northern District of California, applying California law, has held that neither a breach of contract exclusion nor the implied willful acts exclusion provided for by California Insurance Code § 533 precluded an insurer’s duty to defend a lawsuit brought against its insured by one of its competitors for… Continue Reading