Not Every Demand Is a Claim: Coverage Requires a Demand Against the Insured

The United States Court of Appeals for the Eighth Circuit, applying Missouri law, affirmed dismissal of a court-appointed receiver’s claims against an insurer seeking coverage for the receivership action, holding that the receiver’s demands for coverage did not constitute a “Claim” against an insured, nor did the receiver adequately allege covered “Loss.” King v. Tex. Ins. Co., 2026 WL 2197632 (8th Cir. July 30, 2026).

When the insured company defaulted on a loan, the lending bank initiated a receivership action against the bank. The court-appointed receiver then sent two letters to the insured’s D&O insurer seeking coverage for the receivership action. After the insurer denied coverage, the receiver brought suit alleging breach of contract and vexatious refusal to pay under Missouri law. The district court granted the insurer’s motion to dismiss and denied leave to amend.

The Eighth Circuit affirmed on appeal. The court held that the receiver’s complaint failed to allege the existence of a “Claim”—a “[w]ritten demand against the Insured for monetary damages or non-monetary or injunctive relief.”—against the insured, as opposed to on behalf of the insured. Further, the receiver failed to allege a “Loss” under the relevant policy because it did not allege that the insured entity or its officers had become legally obligated to pay any amount resulting from the receivership action.