The United States Court of Appeals for the First Circuit, applying Massachusetts law, has held that an insured church’s D&O policy did not afford coverage for a claim against a “breakaway” congregation because the breakaway congregation was not an “insured” under the policy.  Newton Covenant Church v. Great Am. Ins. Co., 2020 WL 1815971 (1st Cir. Apr. 10, 2020). Even if the breakaway congregation were to be deemed an “insured,” the Court ruled that coverage was still unavailable because an “insured v. insured” exclusion would apply.

Continue Reading First Circuit Holds “Breakaway” Church Not an “Insured” Under Original Church’s D&O Policy

A Michigan intermediate appellate court has held that a lawsuit alleging a trustee’s undue influence with inheritance alleged a “negligent act, error or omission” within the meaning of an insuring agreement of an E&O policy.   Hanover Ins. Co. v. Lubienski, 2020 WL 1491781 (Mich. Ct. App. Mar. 24, 2020).

Continue Reading Undue Influence Suit Alleges “Negligent Act, Error or Omission” Under E&O Policy

In a win for an insurer represented by Wiley Rein, the United States District Court for the District of Maryland has held that an intra-corporate dispute between shareholders was not covered under an EPL insuring agreement because the underlying demand letter and complaint did not state a claim “for” an Employment Practices Wrongful Act, and it was not covered under a D&O insuring agreement because the claimant owned 10% or more of the outstanding shares of the insured company at the time the claim was made.  Madison Mechanical, Inc. v. Twin City Fire Ins. Co., 2019 WL 6035690 (D. Md. Nov. 14, 2019).

Continue Reading No EPL or D&O Coverage for Intra-Corporate Shareholder Dispute

Applying Iowa law, a federal district court has held that an insured’s failure to give notice of a letter seeking information in connection with a
Continue Reading Insurer Could Not Assert Late Notice Defense Because Letter from Department of Labor Did Not Allege a “Fiduciary Claim” for a “Wrongful Act”

The Supreme Court of Vermont has held there is no coverage for breach of contract and intentional torts under an errors and omissions (E&O) liability policy, where all counts of the complaint rested on allegations that the insured used misrepresentations and falsehoods to undermine a competitor, which did not fall within the definition of “professional services” under the policy.  Integrated Tech., Inc. v. Crum & Forster Specialty, 2019 WL 3759175 (Vt. Aug. 9, 2019).

Continue Reading No E&O Coverage for Breach of Contract and Intentional Torts

The U.S. District Court for the Middle District of Florida, applying Florida law, held that a directors and officers liability insurance policy did not provide coverage for a claim asserted by a receiver seeking the return of bonus and other compensation amounts paid to a former director and officer of the company because (1) the policy’s profit exclusion applied; and (2) the claw back claim did not arise out of a “Wrongful Act.”  Desai v. Navigators Ins. Co., 2019 WL 3068398 (M.D. Fla. July 12, 2019).

Continue Reading No Coverage for Receiver’s Claw Back Claim Against D&O Because Profit Exclusion Applied and Claim Did Not Arise Out of a “Wrongful Act”

The United States District Court for the Central District of California, applying California law, has held that there is no coverage for a False Claims Act settlement where the insured company’s alleged wrongful acts took place outside the policy period and were independently barred from coverage by a contract exclusion, prior acts exclusion and regulatory exclusion. Office Depot Inc. v. AIG Specialty Insurance Co. No. 2:15-cv-02416 (C.D. Cal. June 21, 2019).

Continue Reading Three Separate Policy Exclusions and Wrongful Acts Outside the Policy Period Bar Coverage for California False Claims Act Lawsuit

The U.S. Court of Appeals for the Eleventh Circuit, applying Florida law, has held that a securities exclusion in a private company directors and officers insurance policy broadly barred coverage for all claims in an underlying lawsuit brought by former shareholders of an insured company arising out of the sale of their shares.  Colorado Boxed Beef Co., Inc. v. Evanston Ins. Co., No. 19-10326, 2019 WL 2479321 (11th Cir. June 13, 2019).

Continue Reading Eleventh Circuit Applies Securities Exclusion Broadly

The United States District Court for the District of South Carolina, applying South Carolina law, has denied a professional liability insurer’s motion to dismiss, holding that the insured’s alleged conduct could fall within the policy’s definition of “Wrongful Act,” thus giving rise to a duty to defend.  Harriman v. Associated Indus. Ins. Co., 2019 WL 1670801 (D.S.C. Apr. 17, 2019).

Continue Reading Duty to Defend Triggered Given “Possibility” of Wrongful Act

The Ninth Circuit Court of Appeals, applying California law, has ruled that a policy application did not require insureds to disclose a claim that did not assert any “wrongful acts.”  Kelly v. Starr Indem. & Liab. Co., 2019 WL 1895825 (9th Cir. Apr. 29, 2019).

Continue Reading Application Did Not Require Insureds To Disclose Pre-Policy Claim When No Wrongful Acts Asserted