By Emily S. Hart on Posted in LossThe United States District Court for the Eastern District of Pennsylvania has held that where an occurrence-based crime policy covers only losses discovered “during the Policy Period,” no coverage is available for losses discovered after the policy period concluded, despite the fact that a prior policy issued to the insured contained a discovery period extending… Continue Reading
By Edward R. Brown on Posted in Loss,Professional ServicesA New York federal district court, applying New York law, has held that the sending of unsolicited text message advertisements in violation of the Telephone Consumer Protection Act (TCPA) triggered professional services coverage under a Miscellaneous Professional Liability (MPL) policy. Illinois Union Ins. Co. v. US Bus Charter & Limo, Inc., 2018 WL 1193464 (E.D.N.Y.… Continue Reading
By Bonnie Thompson on Posted in LossApplying Colorado law, the United States Court of Appeals for the Tenth Circuit has held that statutory damages sought under the Telephone Consumer Protection Act are uninsurable penalties, and that injunctive relief does not constitute “damages.” Ace American Ins. Co. v. Dish Network, LLC, 2018 WL 988404 (10th Cir. Feb. 21, 2018).… Continue Reading
By Margaret Thomas on Posted in LossA Washington federal court has denied an insurer’s motion for summary judgment regarding coverage under a fidelity bond issued to a now-defunct bank for losses incurred in connection with fraudulently originated loans the bank purchased, resold, and ultimately repurchased pursuant to contractual obligation. The court held that the loan originators were “Employees” under the policy,… Continue Reading
By Nicole Audet Richardson on Posted in Loss,Personal Profit/Advantage exclusion,Public Policy prohibition on insuranceThe United States District Court for the Southern District of Florida has denied an insured’s request for indemnity from its insurer for the amount owed under a settlement agreement with the state of Florida over grand theft charges against the insured. The court held that, under Florida law, the settlement does not constitute covered “Loss”… Continue Reading
By Emily S. Hart on Posted in LossThe United States District Court for the District of Massachusetts has held that coverage is unavailable for a complaint alleging violations of the California Labor Code and the California Business and Professions Code because the complaint did not constitute an employment claim as defined by the Policy’s EPL Coverage Section and triggered an exclusion in… Continue Reading
By Emily S. Hart on Posted in Excess insurance/exhaustion,Loss,Wrongful ActThe United States District Court for the Northern District of California has denied an insured’s motion to dismiss an umbrella insurer’s declaratory judgment action. Great American Ins. Co. v. Quintana Homeowners Ass’n., 2017 WL 3453394 (N.D. Cal. Aug. 11, 2017). The insurer alleged that it had no duty to defend or indemnify after exhaustion of… Continue Reading
By Bonnie Thompson on Posted in Loss,Prior Knowledge/Warranty Exclusion,RescissionAn Illinois intermediate appellate court, applying Illinois law, has held that a renewal insurance policy may only be rescinded based on material misrepresentations made in the renewal application, and not based on misrepresentations made in applications for prior policies. Ill. State Bar Ass’n Mut. Ins. Co. v. Rex Carr Law Firm, 2017 WL 2806126 (Ill.… Continue Reading
By Ashley-Anne L. Criss on Posted in LossThe United States District Court for the Eastern District of Virginia, applying Virginia law, has held that a hotel’s former maintenance worker was not an “employee” as defined by a business insurance policy, thereby precluding coverage for loss resulting from the worker’s theft. GRM Mgmt., LLC v. Cincinnati Ins. Co., 2017 WL 1712520 (E.D. Va.… Continue Reading
By Stewart Day on Posted in Loss,Personal Profit/Advantage exclusionThe United States District Court for the Southern District of Texas, applying Texas law, and adopting the recommendation of a magistrate judge, has held that reimbursement of excessive executive compensation constitutes disgorgement and is therefore uninsurable as a matter of law under a directors and officers policy. Twin City Fire Ins. Co. v. Oceaneering Int’l,… Continue Reading
By Bonnie Thompson on Posted in Loss,Personal Profit/Advantage exclusion,Prior Knowledge/Warranty ExclusionA New York trial court, applying New York law, has held that a $140 million disgorgement payment by an insured broker-dealer to the U.S. Securities and Exchange Commission constitutes insurable loss, based on evidence that the payment did not disgorge the insured’s ill-gotten gains, but rather those of its customers. J.P. Morgan Secs. Inc. v.… Continue Reading
By Bonnie Thompson on Posted in LossA New York state intermediate appeals court has affirmed a lower court’s holding that statutory damages paid as part of a settlement of a Fair Credit Reporting Act (FCRA) suit are covered compensatory damages, rather than non-covered penalties under the relevant errors and omissions liability policy. Navigators Ins. Co. v. Sterling Infosystems, Inc., 2016 WL… Continue Reading
By Edward R. Brown on Posted in Loss,Personal Profit/Advantage exclusion,Wrongful ActAn Illinois federal district court has held that a lawsuit seeking to recover amounts an insured wrongfully refused to pay to another sought only uninsurable restitutionary-type relief, not “Damages,” and thus did not trigger an insurer’s defense obligations under an E&O policy. Westport Ins. Corp. v. M.L. Sullivan Ins. Agency, Inc., 2017 WL 56635 (N.D.… Continue Reading
By Alexander Merritt on Posted in Defense Costs,Loss,Public Policy prohibition on insuranceApplying New York and Delaware law, the Superior Court of Delaware has held that a retirement benefits provider’s settlement of three class actions seeking payment of alleged profits did not constitute disgorgement and was insurable under the provider’s professional liability policies. TIAA-CREF Individual & Institutional Servs. LLC v. Illinois Nat’l Ins. Co., 2016 WL 6534271… Continue Reading
By Leland H. Jones, IV on Posted in Defense Costs,Dishonesty Exclusion,Excess insurance/exhaustion,LossThe California Court of Appeal has held that an errors and omissions insurer had a duty to defend lawsuits seeking amounts owed under contract because the lawsuits potentially sought non-contractual damages for breach of fiduciary duty and non-disclosure. Health Net, Inc. v. Am. Int’l Spec. Ins. Co., 2016 Cal. App. Lexis 7296 (Cal. Ct. App.… Continue Reading
By Leland H. Jones, IV on Posted in Breach of Contract,LossIn a win for a Wiley Rein client, the United States District Court for the District of New Jersey, applying New Jersey law, held that no coverage was available under an errors and omissions policy for remediation work performed by an insured because the insured was not “legally obligated to pay” for the remediation. Wyndham… Continue Reading
By Jennifer A. Williams on Posted in LossThe United States District Court for the Eastern District of New York, applying New York law, has held that a consent judgment accompanied by a covenant not to execute by the claimant was covered “Loss” under a D&O insurance policy where there was no waiver of the right to pursue the insurer. Intelligent Digital Systems,… Continue Reading
By John E. Howell on Posted in LossThe United States Court of Appeals for the Third Circuit has held that a bank’s $102 million payments to settle lawsuits alleging improper collection of overdraft protection fees are not covered “Damages” under the bank’s professional liability insurance policies. The PNC Financial Services Group, Inc. v. Houston Cas. Co., WL 2016 1730734 (3d Cir. May 2,… Continue Reading
By Jennifer A. Williams on Posted in Dishonesty Exclusion,Loss,Public Policy prohibition on insuranceThe U.S. District Court for the Middle District of Pennsylvania, predicting Pennsylvania law, has held that restitution for criminal acts is uninsurable as a matter of public policy. Darwin Nat’l Assurance Co. v. Luzerne Cty. Transp. Auth., 2016 WL 1242283 (M.D. Pa. Mar. 30, 2016). The court accordingly found that criminal proceedings against a public… Continue Reading
By Edward R. Brown on Posted in Bad faith/duty to settle,Consent to settle/incur defense costs,Cooperation,LossThe Pennsylvania Supreme Court has held that a group of insureds could recover from their insurers for a settlement that was “fair, reasonable and non-collusive” regardless of whether the insureds obtained the insurers’ consent as required by the policies and regardless of whether the insureds failed to show that the insurers acted in bad faith.… Continue Reading
By Edward R. Brown on Posted in Bad faith/duty to settle,Consent to settle/incur defense costs,Cooperation,LossThe United States Court of Appeals for the Eleventh Circuit ruled in favor of Wiley Rein’s client, an insurer, when it affirmed the dismissal of a complaint filed by an insured seeking coverage for amounts paid to settle an underlying lawsuit and alleging bad faith on the grounds that the insured settled the underlying lawsuit… Continue Reading
By Karen L. Toto on Posted in LossApplying Minnesota law, the United States Court of Appeals for the Eighth Circuit has held that a bank’s fidelity bond provides coverage for claims by third-parties alleging that a bank employee used their money in a fraudulent investment scheme. Avon State Bank v. Bancinsure, Inc., 2015 WL 3465985 (8th Cir. June 2, 2015).… Continue Reading
