The Illinois Court of Appeals, applying Illinois law, has held that multiple lawsuits filed against a school district arising out of an employee’s alleged sexual abuse of children constitute a “single Claim” first made before the claims-made liability policy incepted.  Freeburg Cmty. Consol. Sch. Dist. No. 70 v. Country Mut. Ins. Co., 2021 WL 1337333 (Ill. Ct. App. Apr. 8, 2021).  The court also held that the insurer was permitted to consider extrinsic evidence beyond the “eight corners” of the policy and the complaint in determining coverage.

Continue Reading Multiple Lawsuits Arising Out of Employee’s Alleged Sexual Abuse of Multiple Children are “Single Claim” Under Claims-Made Policy

Applying California law, the United States Court of Appeals for the Ninth Circuit has held that a fiduciary liability policy’s Prior and Pending Proceeding Exclusion did not bar coverage for litigation concerning implementation of a settlement agreement resolving a prior lawsuit because the two actions did not “arise out of the same facts or circumstances.”  San Joaquin County Employees’ Ret. Ass’n v. Travelers’ Cas. & Sur. Co., 2021 WL 1310665 (9th Cir. Apr. 8, 2021).  Further, an Inadequate Funding Exclusion did not apply because the loss did not arise out of insufficient funding of the benefit plan as a whole.

Continue Reading Coverage for Suit Arising from Settlement of Previous Litigation Not Barred by Prior and Pending Proceeding Exclusion

Applying New York law, the United States District Court for the Southern District of New York has held that an SEC investigation of the insured company did not constitute a “Securities Claim,” where the term expressly excluded investigations.  Hertz Global Holdings, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 2021 WL 1198802 (S.D.N.Y. Mar. 30, 2021).  The court likewise held that the investigation did not constitute a “Claim” against Insured Persons, notwithstanding cooperation of former executives in the investigation.

Continue Reading SEC Investigation of Company Not a “Claim” or “Securities Claim”

Applying the law of Mississippi, a federal district court held that coverage was unavailable under a claims-made policy for an underlying lawsuit because the lawsuit, which was filed after the expiration of the policy period, did not allege that the insured had provided legal services “for others” as required by the policy.  Blackburn Law Firm, PLLC v. Allied World Ins. Co., 2021 WL 817882 (N.D. Miss. Mar. 3, 2021).

Continue Reading Lawsuit Filed After Expiration of Policy Period for Lawyer’s Negligent Drafting of His Own Trust Agreement Not Covered Under Claims-Made Professional Liability Policy

Applying Delaware law, the Delaware Superior Court has held that a bankruptcy trustee’s fraudulent transfer claim constitutes a “Securities Claim” under a D&O policy.  Verizon Commc’ns Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa, 2021 WL 710816 (Del. Super. Ct. Feb. 23, 2021).

Continue Reading Delaware Trial Court Holds that Fraudulent Transfer Claim by Bankruptcy Trustee is a “Securities Claim”

An Illinois appellate court has held that a professional liability insurer has a duty to defend suits seeking only declaratory and injunctive relief, even though the suits did not allege potentially covered damages.  MHM Correctional Servs., Inc. v. Evanston Ins. Co., 2021 WL 689525 (Ill. Ct. App. Feb. 23, 2021).

Continue Reading Insurer Has Duty to Defend Suits Seeking Only Declaratory and Injunctive Relief

The California Court of Appeal, applying California law, has held that two lawsuits arising from work performed by the same insured engineering firm on a housing development constitute related claims under the firm’s professional liability policies, and were thus subject to a single policy limit.  D.R. Horton Los Angeles Holding Co. v. Certain Underwriters at Lloyd’s London Subscribing to Policy No. 146/LDUSA0700832, 2020 WL 7417409 (Cal. Ct. App. Dec. 18, 2020).

Continue Reading Lawsuits Concerning Same Housing Development Project Are Related Claims

The United States District Court for the Central District of California, applying Georgia law, has held that a claims-made policy did not provide coverage for an underlying lawsuit where the allegations in that lawsuit were first made in an email received by the insured prior to the start of the policy period.  Peachstate Health Mgmt. v. Chubb Ins. Co., 2020 WL 8184143 (C.D. Cal. Nov. 24, 2020).

Continue Reading No Coverage for Lawsuit Alleging Same Circumstances Asserted in Email Received Prior to Policy Period

Applying California law, the United States Court of Appeals for the Ninth Circuit has held that a letter proposing an informal settlement received before the policy period constituted a claim, such that no coverage was available for subsequent related lawsuits.  Pac. Coast Surgical Ctr., L.P. v. Scottsdale Ins. Co., 2020 WL 5870257 (9th Cir. Oct. 2, 2020).

Continue Reading Pre-Policy Settlement Letter Deemed a “Claim,” Barring Coverage for Related Lawsuits

The United States District Court for the Northern District of Texas, applying Texas law, has held that an insured’s late notice of a claim bars coverage, rejecting arguments that (i) the initial complaint did not constitute a “claim” because it did not allege a “wrongful act;” (ii) notice to the broker was sufficient; and (iii) the issuance of a renewal policy on different terms triggered the automatic extended reporting period. Vela Wood PC v. Associated Indus. Ins. Co., 2020 WL 5440496 (N.D. Tex. Sept. 10, 2020).

Continue Reading Texas Court Holds Late Notice Bars Coverage