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The United States Court of Appeals for the Eleventh Circuit, applying Georgia law, has held that an insurer has a duty to defend a lawsuit where an award of attorneys’ fees might constitute covered “Loss,” even though the lawsuit did not otherwise seek covered amounts.  AEGIS Elec. & Gas Int’l Serv. Ltd. v. ECI Mgmt. LLC, No. 19-11114, 2020 WL 4359610 (11th Cir. July 30, 2020).
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Continue Reading 11th Circuit Holds Insurer Must Defend Lawsuit Where Award of Attorneys’ Fees Was the Only Potentially Covered Relief

The United States District Court for the Northern District of West Virginia, applying West Virginia law, has held that an insurer had no duty to defend or indemnify its insured because two exclusions and the definitions of “damages” and “claim” each separately precluded coverage of a claim for a client’s lost settlement funds under the lawyer’s professional liability policy.  ALPS Prop. & Cas. Ins. Co. v. Murphy, 2020 WL 4141987 (N.D. W. Va. July 20, 2020).
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Continue Reading No Coverage under Lawyer’s Professional Liability Policy for Client’s Lost Settlement Funds

A Vermont federal court has held that a suit seeking “benefits [the insured] promised but failed to provide” sought amounts that fell within an exception for “restitution” from the definition of “damages” covered under an E&O policy.  James River Ins. Co. v. Inn-One Home, LLC, 2020 WL 3415627 (D. Vt. June 22, 2020).
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Continue Reading Benefits the Insured Promised But Failed to Provide Constitute Non-Covered Restitution

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

The U.S. Court of Appeals for the Ninth Circuit, applying California law, has held that a fiduciary liability policy potentially provided coverage for a complaint alleging errors in the administration of an employee benefits program.  Erickson-Hall Constr. Co. v. Hartford Fire Ins. Co., 2020 WL 1744338 (9th Cir. Apr. 8, 2020).
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Continue Reading Alleged Errors In Employee Benefits Administration Potentially Trigger Fiduciary Liability Policy

The Indiana Court of Appeals, applying Indiana law, has held that a ransomware attack did not necessarily constitute a “fraudulent” act, and the corresponding loss did not fall within the scope of the computer fraud coverage part of a multi-peril commercial insurance policy.  G&G Oil Co. of Ind. v. Cont’l Western Ins. Co., 2020 WL 1528095 (Ind. Ct. App. Mar. 31, 2020).  The court rejected the argument that the ransomware attack was a fraud because it was an “unconscionable dealing” and instead found that the hacker did not “pervert the truth” or engage in deception in order to induce ransom payment.
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Continue Reading No Computer Fraud Coverage for Ransomware Attack

An Illinois intermediate appellate court, applying Illinois law, has held that an insurer must defend an attorney against a malpractice claim seeking damages for alleged negligence in the amount of fees paid to the attorney, concluding that the “legal fees” exclusion in the policy did not apply because the injury suffered by the claimant was not a consequence of the lawyer’s fees.  Illinois State Bar Ass’n Mut. Ins. Co.  v. Canulli, No. 1-19-0142 (Ill. App. Ct. March 13, 2020).
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Continue Reading Insurer Must Defend Legal Malpractice Claim for Damages in the Amount of Fees Paid, Despite Carve Out of “Legal Fees” from Definition of “Damages”

In a win for Wiley Rein’s client, the U.S. Court of Appeals for the Second Circuit, applying Connecticut law, has held that no coverage is available for a lawsuit seeking recovery of disputed legal fees because the relief sought does not constitute covered “damages” and because the insured was not performing “legal services.”  Continental Cas. Co. v. Parnoff, 2019 WL 6999867 (2d Cir. Dec. 20, 2019).
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Continue Reading No Coverage for Lawsuit Seeking Recovery of Disputed Legal Fees

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