A California federal district court has ruled that an insurer could rescind a professional liability policy because its insured failed to disclose a customer dispute and potential claim in its application for coverage. Scottsdale Indem. Co. v. Sun Coast Gen. Ins. Agency, 2020 WL 8569410 (C.D. Cal. Dec. 21, 2020).
Continue Reading Insurer Entitled to Rescind Policy Due to Insured’s Failure to Disclose Contract Dispute and Potential Claim on Application
The United States District Court for the Central District of California, applying California law, has ruled that an insurer could rescind a policy issued after a homeowners association falsely claimed in its application that it had not had any claims against it in the prior five years. Atain Specialty Ins. Co. v. Lake Lindero Homeowners Ass’n, 2020 WL 7416169 (C.D. Cal. Nov. 25, 2020). The Court concluded that the information withheld was material to the insurer’s decision whether to issue the policy.
Continue Reading Insurer Entitled to Rescind Due to Misrepresentations on Application
The United States District Court for the Northern District of California has held that, in an action to rescind a professional liability policy, a triable issue of fact existed regarding whether an insured misrepresented or concealed information in connection with obtaining insurance where the insured did not have express notice of the clients’ dissatisfaction with his services and it was not otherwise obvious that a claim might be filed against him when he applied for the policy. Am. Alternative Ins. Corp. v. Warner, 2020 WL 6204924 (N.D. Cal. Oct. 22, 2020). In denying the insurer’s motion for summary judgment, the court noted that evidence of an increase in premiums is sufficient to establish materiality under California law.
Continue Reading Whether Insured Misrepresented or Concealed Information in Application is a Fact Issue for Trial
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 United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, has held that an insurer was not entitled to summary judgment voiding a medical malpractice liability policy, finding that triable issues of fact remained about whether an insured could have anticipated litigation stemming from past medical procedures at the time it completed its policy application. MDAdvantage Ins. Co. of N.J. v. Hasiuk, 2020 WL 1531817 (E.D. Pa. Mar. 31, 2020).
Continue Reading Issues of Fact Halt Insurer’s Attempt to Rescind Malpractice Policy
Applying Ohio law, a federal district court has held that misrepresentations in an application warranty statement regarding three unreported lawsuits filed against the insured during the initial policy period rendered a renewed claims-made and reported policy void ab initio. Certain Underwriters at Lloyds London Subscribing to Policy No. HMPL 18-0164 & HMPL 17-0158 v. KG Admin. Servs., Inc., 2019 WL 6770061 (N.D. Ohio Dec. 12, 2019). The court also held that, because the claims were not reported during the initial policy period, the insurer did not have any coverage obligations under the initial policy.
Continue Reading Concealment of Pending Lawsuits in Renewal Application Voids Policy
Applying California law, a federal district court has rejected an insured law firm’s argument that the terms “may” and “might” as used in connection with an application question regarding knowledge of potential claims are ambiguous and unenforceable. Am. Alternative Ins. Corp. v. Warner, 2019 WL 6493945 (N.D. Cal. Dec. 3, 2019).
Continue Reading “May” and “Might” are Sufficiently Clear and Unambiguous to Support Rescission Claim
Applying California law, a federal district court has held that an insurer was not obligated to cover a labor union’s defense costs and damages in a lawsuit brought by a former employee because the alleged wage and hour violations were not “wrongful employment practices” or “wrongful acts” under the policy. United Farm Workers of Am. v. Hudson Ins. Co., 2019 WL 1517568 (E.D. Cal. Apr. 8, 2019). The court also held that material misrepresentations in the labor union’s application for insurance voided the policy.
Continue Reading No Coverage for Wage and Hour Claims Under Labor Professional Liability Policy
The U.S. District Court for the Central District of California, applying California law, held that a warranty exclusion barred coverage where a start-up company made material misrepresentations regarding contemplated acquisitions in its policy application. Scottsdale Ins. Co. v. CSC Agility Platform, Inc., 2019 WL 1452910 (C.D. Cal. Feb. 4, 2019). The court further held that the insurer did not waive its right to enforce the warranty exclusion, nor was it estopped from doing so.
Continue Reading Warranty Exclusion Bars Coverage Where Start-Up Made Material Misrepresentations in Application about Potential Acquisitions
The U.S. District Court for the Western District of Pennsylvania, applying Pennsylvania law, has held that a professional liability insurance policy’s outside business exclusion precluded coverage for an underlying lawsuit arising out of an insured attorney’s alleged use of privileged information to benefit his own business interests. Westport Ins. Co. v. Hippo Fleming & Pertile Law Offices, 2018 WL 4705780 (W.D. Pa. Oct 1, 2018).
Continue Reading No Coverage for Malpractice Suit Implicating Policy’s Outside Business Exclusion