Judge Paul Wallace of the Delaware Superior Court has held that a bump-up provision did not operate to preclude coverage for a settlement of a Section 14(a) cause of action.  Northrop Grumman Innovation Sys., Inc. v. Zurich Am. Ins. Co., 2021 WL 347015 (Del. Super. Ct. Feb. 2, 2021).  The court also held that a prior acts exclusion contained in a different set of D&O policies did not preclude coverage for Section 10(b) claims asserted in the same lawsuit.

Continue Reading Coverage for Stockholder Suits Not Barred By Prior Acts Exclusion or Bump-Up Provision

Applying Wisconsin law, the United States Court of Appeals for the Seventh Circuit has held that a breach of contract exclusion did not apply to bar coverage for a claim because it had the effect of rendering the insured’s errors and omissions professional liability coverage illusory.  Crum & Forster Specialty Ins. Co. v. DVO, Inc., 2019 WL 4594229 (7th Cir. Sept. 23, 2019).

Continue Reading Seventh Circuit: Breach of Contract Exclusion Renders E&O Coverage Illusory

The United States District Court for the District of Utah has held that an errors and omissions policy’s “options trading” exclusion applied to bar coverage for claims resulting from an insured investment company’s high-risk trade.  Allegis Invest. Servs., LLC v. Arthur Gallagher & Co., 2019 WL 1002364 (D. Utah Mar. 1, 2019).

Continue Reading Options Trading Exclusion Unambiguously Bars Coverage for Investor Claims

The U.S. District Court for the District of Kansas, applying Kansas law, has held that fact questions regarding application of an investment advising exclusion in a professional liability policy preclude summary judgment. Bridgebuilder Tax + Legal Servs. v. Torus Specialty Ins. Co., 2017 WL 6342229 (D. Kan. Dec. 12, 2017). The court also indicated that if the insurer denied coverage improperly, it could also be liable for bad faith refusal to settle.

Continue Reading Insurer Potentially Liable for Failing to Initiate Settlement Discussions

Applying Mississippi law, the United States Court of Appeals for the Seventh Circuit has held that an exclusion in a bankers’ professional liability policy barred coverage for class claims alleging that the insured bank wrongfully maximized overdraft fees charged to its customers.  BancorpSouth, Inc. v. Federal Ins. Co., 2017 WL 4546144 (7th Cir. Oct. 12, 2017).  The court also concluded that the bad faith claim against the insurer failed because of the absence of coverage in the first instance.

Continue Reading Fee Exclusion Bars Coverage for Overdraft Fee Settlement

Applying Indiana law, the United States Court of Appeals for the Seventh Circuit has held that neither a company’s crime policy nor its commercial property policy provided coverage for theft of company property by a consultant who worked for the company.  Telamon Corp. v. Charter Oak Fire Ins. Co., 2017 WL 942656 (7th Cir. Mar. 9, 2017).

Continue Reading No Coverage for Consultant’s Theft Under Company’s Crime or Property Policies

A Maryland intermediate appellate court has affirmed summary judgment in favor of an insurer, holding that a Prior Acts Exclusion applied to bar coverage for two antitrust lawsuits where the suits alleged that the insured conspired to raise prices beginning as early as 2002 and the Prior Acts Exclusion barred coverage for “Interrelated Wrongful Acts, committed, attempted, or allegedly committed or attempted in whole or in part prior to May 15, 2007.”  Cristal USA Inc. v. XL Specialty Ins. Co., 2017 WL 727795 (Md. Ct. Spec. App. Feb. 24, 2017).  The court also held that a coverage determination by the primary insurer does not bind an excess follow-form insurer, and that the excess insurer had no duty to defend the action.

Continue Reading Prior Acts Exclusion Bars Coverage for Suits Alleging Wrongful Conduct Spanning Prior Acts Date

The United States District Court for the Southern District of Indiana, applying Mississippi law, has held that a bankers’ professional liability insurance policy did not cover a class action suit against a bank alleging that it wrongfully maximized overdraft fees charged to its customers.  Bancorpsouth, Inc. v. Federal Ins. Co., 2017 WL 373300 (S.D. Ind. Jan. 26, 2017).  The court also dismissed the bad faith claim made against the insurer because of the absence of coverage in the first instance.

Continue Reading Bankers’ Professional Liability Policy Excludes Overdraft Fee Litigation From Coverage