A federal district court has ruled that a third-party administrator’s professional liability policy does not afford coverage for a claim against the TPA arising from an excess judgment against the TPA’s insurer-client. American Claims Mgmt., Inc. v. Allied World Surplus Lines Ins. Co., 2020 WL 5257795 (S.D. Cal. Sept. 3, 2020).
Continue Reading No Coverage for TPA in Claim Arising from Extracontractual Exposure to Insurer
The United States District Court for the Eastern District of Kentucky, applying Kentucky law, has held that an insurer had no duty to defend or indemnify its insured given the applicability of the policy’s “contractual liability” exclusion to the claims at issue. See Global Holdings, LLC v. Navigators Mgmt. Co., 2020 WL 3065914 (E.D. Ky. June 9, 2020).
Continue Reading Contract Exclusion Bars Coverage for Class Action
The U.S. District Court for the Southern District of New York, applying New York law, has held that no coverage is available for related claims reported to the insurer after the end of the policy period in which the first claim was made. Berkley Assurance Co. v. Hunt Constr. Group, Inc., 2020 WL 3000399 (S.D.N.Y. June 4, 2020).
Continue Reading No Coverage for Related Claims Reported After Policy Period During Which Claim Was First Made
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
The U.S. Court of Appeals for the Eighth Circuit, applying Kansas law, has held that a contract exclusion bars coverage for a lawsuit asserting claims for conversion and breach of fiduciary duty for failure to purchase a deceased owner’s stock under a stock repurchase agreement. Russell v. Liberty Ins. Underwriters, Inc., 2020 WL 812910 (8th Cir. Feb. 19, 2020). The court also held that the agreement was not an employee benefit plan that would implicate fiduciary liability coverage.
Continue Reading Contract Exclusion Bars Coverage for Lawsuit Over Stock Repurchase Agreement
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
Applying Texas law, the Fifth Circuit has held that a D&O policy’s securities exclusion barred coverage for a suit for misrepresentation and misconduct that arose out of a sale of equity interests. Gleason v. Markel Am. Ins. Co., 2019 WL 3437642 at *1 (5th Cir. July 30, 2019).
Continue Reading Fifth Circuit Holds Securities Exclusion Bars Coverage for Suit Arising out of Sale of Equity Interests
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
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, 2019 WL 1810956 (D. Nev. Apr. 23, 2019).
Continue Reading Prior Favorable Coverage Determination is Evidence of Good Faith
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 . . . any oral or written contract or agreement.” Cross Check Servs., LLC v. Old Republic Ins. Co., 2019 WL 1429336 (E.D. Cal. Mar. 29, 2019).
Continue Reading Contract Exclusion Bars Coverage for Demand for Cost-Overrun Payment