The United States District Court for the Southern District of Ohio, applying Ohio law, has held that an ERISA exclusion in two E&O policies barred coverage for a lawsuit filed by the United States Department of Labor alleging ERISA violations in connection with an employee stock ownership program (ESOP) stock purchase.  Gemini Ins. Co. v. Potts, 2020 WL 4000977 (S.D. Ohio July 15, 2020).

Continue Reading ERISA Exclusion in E&O Policies Bars Coverage for Suit Filed by the Department of Labor

Applying Oklahoma law, the United States District Court for the Western District of Oklahoma has held that no coverage is available for a lawsuit involving an equity holder in an investment agreement because the action did not involve a “Wrongful Act” in an individual’s capacity as “an Insured Person.”  Turner v. XL Specialty Ins. Co., 2020 WL 3547954 (W.D. Okla. June 10, 2020).  The court further held that the insured did not satisfy his burden of proving that his legal costs were “Defense Expenses” even though he was nominally a “defendant” in the suit.

Continue Reading No Coverage for Affirmative Lawsuit Challenging Distribution of Proceeds From Sale of Investment Assets

The United States Court of Appeals for the Ninth Circuit, applying California law, has held that two exclusions in a D&O policy applicable to claims by employees and for Fair Labor Standards Act violations barred coverage for a wage-and-hour class action lawsuit.  U.S. Telepacific Corp. v. U.S. Specialty Ins. Co., 2020 WL 3265238 (9th Cir. June 17, 2020).

Continue Reading EPL Exclusions in D&O Policy Barred Coverage for Wage-and-Hour Class Action

Applying New York law, the United States District Court for the Southern District of New York has held that an EPL insurer need not reimburse a CGL insurer for a settlement and defense costs incurred in connection with two lawsuits alleging sexual harassment, discrimination, and assault, concluding that the policy’s criminal act exclusion barred coverage because the suits both arose from alleged sexual assault.  Hamilton Specialty Ins. Co. v. Kinsale Ins. Co., 2020 WL 1876358 (S.D.N.Y Apr. 15, 2020).

Continue Reading Criminal Act Exclusion Bars EPL Coverage for Sexual Harassment, Discrimination, and Assault Suits

Applying New York law, a federal district court has held that an insurer has a duty to defend and provide independent counsel to an insured realtor for claims involving intentional acts and repayment of commissions. Great Am. Ins. Co. v. Houlihan Lawrence, Inc., 2020 WL 1487294 (S.D.N.Y. Mar. 7, 2020).  The court also held that, because the underlying case was still pending, the question of whether the insurer had a duty to indemnify was premature.

Continue Reading Insurer Required to Defend and Provide Independent Counsel for Potentially Covered Claims

Applying Illinois law, the United States District Court for the Central District of Illinois has held that an insurer had no duty to cover defense costs for affirmative claims that involved, but were not brought by, its insured.  Marquis Energy LLC v. Federal Ins. Co., 2020 WL 853503 (C.D. Ill. Feb. 20, 2020).

Continue Reading Insurer Has No Duty to Defend Insured in “Defensive” Arbitration Proceeding

Applying Michigan law, a federal district court has held that common law causes of action for fraud and negligent misrepresentation are not “based on or arising out of actual or alleged violations” of ERISA or securities laws merely because they arise out of the same factual scenario.  Great Am. Fidelity Ins. Co. v. Stout Risius Ross, Inc., 2020 WL 601784 (E.D. Mich. Feb. 7, 2020).

Continue Reading Coverage for Common Law Causes of Action Not Barred Under ERISA/Securities Law Exclusion

Applying California Law, the United States District Court for the Southern District of California has held that an insurer must pay defense costs contemporaneously, even where the policy’s advancement provision merely requires payment “prior to final disposition of a claim,” because the insured became legally liable for defense costs as they were incurred.  Renovate Am., Inc. v. Lloyd’s Syndicate 1458, 2019 WL 6716735 (S.D. Cal. Dec. 10, 2019).  The court further held that the insured was excused from obtaining the insurer’s prior written consent regarding defense arrangements given the insurer’s seven-month delay in responding to the insured’s initial notice.

Continue Reading Insurer Must Advance Defense Costs as Incurred and Cannot Enforce Policy’s Defense Arrangement Consent Provision

The United States District Court for the Western District of New York, applying New York law, held that an insurer did not owe a fiduciary duty to its insured when the insured was represented by independent defense counsel, nor did the insurer breach its contractual duties to its insured in paying defense costs, which ultimately exhausted the policy limit.  Korn v. Federal Ins. Co., 2019 WL 4277187 (W.D.N.Y. Sept 10, 2019).

Continue Reading Insurer Did Not Breach Any Duty to Insured Where Payment of Defense Costs Exhausted Policy Limit

Applying California law, a federal district court has held that a wage and hour endorsement limited the coverage available for two class action lawsuits to $25,000 in defense costs.  Houston Cas. Co v. Great American Chicken Corp., Inc., 2019 WL 3886484 (C.D. Cal. Aug. 12, 2019).

Continue Reading California Court Holds that “Wage and Hour Law” Limitations on Coverage Unambiguously Applied to Labor Code Violations