Business Enterprise Exclusion

New York’s intermediate appellate court has held that a business enterprise exclusion bars coverage for a legal malpractice claim that is based partly on the insured attorney’s law practice and partly on the attorney’s activities on behalf of a business enterprise he controlled. Lee & Amtzis, LLP v. Am. Guarantee & Liab. Ins. Co., 2015 WL 1526003 (N.Y. App. Div. Apr. 7, 2015).
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The United States District Court for the Western District of Michigan, applying Michigan law, has held that a business enterprise exclusion bars coverage for a suit arising out of an attorney’s self-dealing as a member of a real estate development company.  Gomery v. Cont’l Cas. Co., 2014 WL 4209648 (W.D. Mich. Aug. 25, 2014).  Wiley Rein represented the insurer in this matter.
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