Prior Knowledge/Warranty Exclusion

The United States District Court for the District of North Dakota has held that an insurer had no duty to defend a claim under a lawyers professional liability policy where the insured had prior knowledge that a claim might be made and should have given notice of the potential claim prior to the policy’s effective date. ALPS Prop. & Cas. Ins. Co. v. Brehdal & Assoc., P.C., 2020 WL 6268043 (D.N.D. Oct 23, 2020). The court also held that the insurer was entitled to reimbursement of defense costs where the policy provided such a right, and the insurer reserved its rights to seek such reimbursement.

Continue Reading Prior Knowledge and Prior Notice Exclusions Barred Coverage For Legal Malpractice Claim

The United States District Court for the Northern District of Ohio, applying Ohio law, has held that coverage for a retaliation claim under a claims-made directors and officers, employment practices, and fiduciary liability insurance policy was not barred by the insured’s failure to disclose a prior False Claims Act investigation on the application. SHH Holdings v. Allied World Specialty Ins. Co., 2020 WL 7385384 (N.D. Ohio Dec. 16, 2020).
Continue Reading Disclosure of False Claims Act Investigation Not Required by Policy Application Questions

Applying Illinois law, a federal district court has held that an insurer did not have a duty to defend or indemnify for a lawsuit that was filed and dismissed prior to the policy period and later refiled during the policy period.  Navigators Specialty Ins. Co. v. B.D. McClure & Assocs., Ltd., 2020 WL 5909067 (N.D. Ill. Oct. 6, 2020).

Continue Reading Insurer Had No Duty to Defend or Indemnify for Lawsuit Refiled During the Policy Period

In a case in which Wiley represented the insurer, the United States District Court for the Eastern District of Virginia, applying New York law, has held that three prior knowledge exclusions barred coverage under an architects and engineers professional liability policy as a matter of law where, before the policy period incepted, the insured (1) knew that a pressure vessel in a boiler system which it had serviced had exploded, causing property damage and bodily injury; (2) received three pre-suit letters from potential claimants; and (3) issued two internal litigation holds.  ChemTreat, Inc. v. Certain Underwriters at Lloyd’s of London, No. 19-cv-63 (E.D. Va. Sept. 21, 2020).

Continue Reading Prior Knowledge Exclusions Apply Where Insured Received Three Letters from Potential Claimants and Issued Two Litigation Holds Before Policy Incepted

The United States District Court for the District of Connecticut, applying Connecticut law, has denied cross-motions for summary judgment, finding that fact issues remain with regard to whether the insured reasonably could have expected a pre-policy period enforcement notice to give rise to claim.  Wallingford Grp., LLC v. Arch Ins. Co., 2020 WL 4464629 (D. Conn. May 11, 2020).

Continue Reading Fact Issues Preclude Summary Judgment on Prior Knowledge Exclusion

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 Illinois law, a federal district court has held that an insurer had no duty to defend or indemnify an insured for a lawsuit that derived in part from facts or circumstances that were the subject of an EEOC charge filed during a prior policy period.  U.S. Specialty Ins. Co. v. Village of Melrose Park, 2020 WL 1923076 (N.D. Ill. April 21, 2020).

Continue Reading No Duty to Defend or Indemnify Lawsuit Overlapping With Prior EEOC Charge

The Wisconsin Court of Appeals has held that a “known loss” provision in an E&O policy barred coverage for a lawsuit filed against an insured because the lawsuit previously was threatened in a cease and desist letter that the insured received almost four years earlier.  Vistelar, LLC v. Cincinnati Specialty Underwriters Ins. Co., 2020 WL 891017 (Wis. Ct. App. Feb. 25, 2020).

Continue Reading “Known Loss” Provision Bars Coverage for Lawsuit Threatened in Pre-Policy Period Cease and Desist Letter

Applying Texas law, the United States Court of Appeals for the Fifth Circuit has held that a prior knowledge condition did not relieve an insurer of its duty to defend where an underlying complaint made vague allegations of wrongdoing at an indeterminate time.  Allied World Specialty Ins. Co. v. McCathern, P.L.L.C., 2020 WL 933314 (5th Cir. Feb. 26, 2020).  The court found that the vague allegations could be construed to refer to conduct occurring after the date specified in the prior knowledge condition.

Continue Reading Vague Allegations Did Not Trigger Prior Knowledge Condition at Duty-to-Defend Stage

Applying New York law, the United States District Court for the Southern District of New York has held that, because a subpoena duces tecum previously issued to the insured by a post-judgment creditor of a non-insured entity was not a “Claim” against the insured, the subpoena and a later-filed lawsuit against the insured could not qualify as “Related Claims” deemed first made when the subpoena was issued. Protective Specialty Ins. Co. v. Castle Title Ins. Agency, Inc., 2020 WL 550700 (S.D.N.Y. Feb. 3, 2020). The court also held that the “warranty exclusion” in the application for the policy (in which the insured warranted that it was “not aware of any incident or circumstance which may result in a claim”) did not bar coverage for the lawsuit, even though the insured failed to disclose the subpoena in the application.

Continue Reading Subpoena Not a ‘Claim’ When Issued in Litigation Not Involving Insured’s Professional Services