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Legal developments affecting professional liability insurers

Category Archives: Other Insurance

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Insurer Obligated to Pay Full Policy Limits on Loss Despite Potentially Concurrent Policies With Competing “Other Insurance” Clauses

Posted in Other Insurance
A federal court in South Carolina has held that an insurer breached its contract with its insured by not paying the full policy limits even though its policy included an “other insurance” clause and there was another insurance policy that potentially covered the same loss.  Michelin North America, Inc. v. Federal Ins. Co., No 6:17-1599… Continue Reading

Following New Jersey Statutory Merger, Surviving Entity Acquires All Rights and Obligations Under Target Entity’s Insurance Policy

Posted in Other Insurance
A New Jersey federal court has held that, following a statutory merger under New Jersey law, the surviving entity acquired the target entity’s rights under its directors and officers liability insurance policy by operation of law and was entitled to reimbursement for post-merger defense costs incurred in defending the target entity’s directors in shareholder class… Continue Reading

U.S. Supreme Court: ERISA “Church Plan” Exception Applies to Any Benefit Plan Maintained by Certain Church-Associated Organizations

Posted in Other Insurance
Giving a major win to several religiously-affiliated health care systems, the United States Supreme Court unanimously held on June 5 that pension plans maintained by certain church-associated organizations qualify as ERISA-exempt “church plans,” whether or not a church first established the plans. Advocate Health Care Network v. Stapleton, No. 16-74 (June 5, 2017). Plaintiffs around… Continue Reading

Temp Nurse Deemed an “Employee” Under Hospital Insurance Policy Despite Staffing Agreement Stating Otherwise

Posted in Other Insurance
The United States Court of Appeals for the Fourth Circuit has held that, under Maryland law, a nurse placed by a staffing agency to work at a hospital qualifies as a hospital “employee” under the hospital’s insurance policy despite a separate contract describing the nurse as an employee of the agency, not the hospital. Interstate… Continue Reading

“Other Insurance” Clause Does Not Create Right to Equitable Contribution Against Excess Policy

Posted in Other Insurance
The United States District Court for the District of Arizona, applying Arizona law, has held that the “other insurance” clauses in two policies are not “mutually repugnant” to enable the primary insurer to receive equitable contribution from an excess insurer where the “other insurance” clause in the primary policy stated that the clause does not… Continue Reading

Exclusions Bar Coverage Under Employee Benefits Liability Policy for Claims Arising From Alleged Underfunding of Pension Plan

Posted in Other Insurance
The United States District Court for the District of Minnesota, applying Minnesota law, has held that certain policy exclusions apply to bar coverage under an employee benefits liability policy for claims arising from the insured’s alleged underfunding of its employees’ pension plan (Plan) and failure to disclose information regarding the funding of the Plan and… Continue Reading

Insurer’s Declaratory Judgment Action Stays in Federal Court Despite Parallel State Court Proceeding Initiated by Insured

Posted in Coverage Litigation - Declaratory Judgment Actions, Other Insurance
A federal district court in Virginia has denied an insured’s motion to dismiss or stay an insurer’s declaratory judgment coverage action in favor of the insured’s parallel state court coverage action, citing the insured’s earlier praise of the federal court as the “superior forum” for the dozens of underlying suits filed against the insured. Liberty… Continue Reading

Insurer Not Required to Advance Defense Costs Under A-Side Policy on Pro Rata Basis with Underlying D&O Policy

Posted in Defense Costs, Excess insurance/exhaustion, Other Insurance
In a victory for Wiley Rein’s client, a federal district court has held that an insurer is not required to advance defense costs under an A-side policy as long as it is advancing defense costs under a D&O liability policy issued for the same policy period. FDIC v. Gálan-Álvarez, 2015 WL 4887578 (D.P.R. Aug. 17, 2015). Wiley… Continue Reading

Sixth Circuit Affirms That Tax Shelter Exclusion Bars Coverage for Suits against Accounting Firm

Posted in Other Insurance
In a win for Wiley Rein’s client, a federal appeals court, applying Tennessee law, affirmed a federal district court decision holding that a tax shelter exclusion in an accounting firm’s professional liability policy precluded coverage for two underlying complaints alleging that the insured implemented investment strategies constituting illegal tax avoidance schemes. Financial Strategy Group, PLC… Continue Reading

No Coverage Under a Claims-Made Policy for Former Employee Even When Insured Alleged to be Vicariously Liable

Posted in Other Insurance
Applying Illinois law, a state appellate court has held that a former employee of an insured does not qualify as an insured under a professional liability claims-made policy for acts committed while employed by the insured because the former employee was not expressly named as an insured in the policy.  Illinois Ins. Guaranty Fund v.… Continue Reading

Fee Exclusion Applies to Malpractice Litigation Where “Essential Character of the Dispute” Concerned Fees

Posted in Other Insurance
A Delaware state court, applying Delaware law, has held that a fee exclusion barred coverage for a lawsuit where the “essential character of the dispute” was about fees and costs.  Attorneys Liability Protection Society v. Jay W. Eisenhofer, Grant & Eisenhofer, P.A., 2014 WL 2884506 (Del. Super. Ct. June 9, 2014). … Continue Reading

Self-Insurance Policy Considered Primary Insurance Due to Pro Rata Other Insurance Clause

Posted in Other Insurance
A North Carolina intermediate appellate court has held that a university’s self-insurance policy was considered primary insurance due to the policy’s pro rata other insurance clause.  Cinoman v. Univ. of N.C., 2014 WL 2937050 (N.C. Ct. App. July 1, 2014).  Under North Carolina law, the court concluded that the insured could therefore maintain a declaratory… Continue Reading

A-Side DIC D&O Policy Is Excess to Primary D&O Policy

Posted in Excess insurance/exhaustion, Other Insurance
A California federal court has held that an A-side difference in condition (DIC) D&O policy is excess to a primary D&O policy under California law, even where the A-side policy does not specifically identify the underlying insurance or a numerical attachment point.  Progressive Cas. Ins. Co. v. St. Paul Fire & Marine Ins. Co., 2014… Continue Reading

Policy with More Specific “Other Insurance” Provision Trumps Policy with More General Provision

Posted in Other Insurance
The United States Court of Appeals for the Second Circuit has held that, with respect to two insurance policies providing coverage for malpractice claims against a nurse, the policy with an “other insurance” provision specifically referencing other excess insurance was excess to the policy with a more general “other insurance” provision.  Thus, the court held… Continue Reading