The Georgia Court of Appeals has held that correspondence to an insured attorney from a former client’s new counsel potentially alluding to a malpractice suit did not constitute a claim and that questions of fact remained as to whether the correspondence gave the insured a basis to reasonably expect a claim. Joseph v. Certain Underwriters at Lloyd’s London, 2020 WL 3168543 (Ga. Ct. App. June 15, 2020).

Continue Reading Pre-Policy Period Letters to Disqualified Counsel from Claimant’s New Attorney are Not a Claim or A Prior Incident that Could be the Basis for a Claim

Applying Pennsylvania law, the United States District Court for the Western District of Pennsylvania has held that an insurer wrongfully withdrew its defense after paying a covered verdict because the duty to defend extended until the court deemed the verdict to be “satisfied.”  Highland Park Care Ctr., LLC v. Campmed Cas. & Indem. Co., 2020 WL 2571900 (W.D. Pa. May 21, 2020).  The court also concluded that the policy’s standard-interest clause required the insurer to pay all post-judgment interest on the covered verdict.

Continue Reading Insurer Required to Defend Until “Satisfaction” of Covered Verdict

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 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

The Illinois Court of Appeals, applying Illinois law, affirmed a trial court’s ruling that an insurer did not act in bad faith by denying coverage where there was a “bona fide” coverage dispute concerning an underlying lawsuit against the insured.  Nine Grp. II, LLC v. Liberty Int’l Underwriters, Inc., 2020 Ill. App. WL 190320 (Ill. Ct. App. Jun. 18, 2020).  The court held that the trial court had correctly refused to award certain costs to the insured under an Illinois statute applicable where an insurers’ conduct is “vexatious and unreasonable.”

Continue Reading Illinois Court of Appeals Rules Insurer Did Not Act in Bad Faith in Denying Coverage Where Claim Was Made Before Policy Period

Applying Iowa law, a federal district court has held that an insurer did not act in bad faith when denying coverage for expenses relating to an ERISA lawsuit because the claim turned on an unsettled question of Iowa law.  Telligen, Inc. v. Atlantic Specialty Ins. Co., 2020 WL 3399916 (S.D. Iowa Apr. 16, 2020).

Continue Reading Insurer Did Not Act in Bad Faith by Denying Coverage for Claim that Turned On Unsettled Question of Law

A New Jersey federal district court has ruled that a broad exclusion in a D&O Policy for claims arising out of services provided to third parties barred coverage for a claim arising out of an insured’s provision of services to its client, and the inclusion in the policy of narrower exclusions (for professional services and insurance company services) did not create any ambiguity.  Benecard Servs., Inc. v. Allied World Specialty Ins. Co., 2020 WL 2842570 (D.N.J. May 31, 2020).

Continue Reading D&O Policy’s “Third-Party Services” Exclusion Bars Coverage for Claim Brought by Insured’s Client

The Supreme Court’s June 22 decision in Liu v. Securities and Exchange Commission addressed important issues about the SEC’s authority to obtain “disgorgement” and the meaning of the term.  This article summarizes the Court’s ruling in Liu, including the Court’s characterization of the term disgorgement and limitations on the SEC’s ability to obtain the remedy.  It then identifies practical implications of the decision in the context of SEC enforcement, as well as potential insurance coverage implications of the decision.

Continue Reading Liu v. SEC: What Is “Disgorgement”?

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 madeBerkley 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

Applying the law of Puerto Rico, a federal district court held that coverage was unavailable for an underlying lawsuit under a claims-made policy because the claim was deemed first made prior to the inception of the policy period.  Galarza-Cruz v. Grupo HIMA San Pablo, Inc., 2020 WL 2843028 (D.P.R. May 28, 2020).

Continue Reading No Coverage for Claim Deemed First Made Prior to Inception of Policy Period