Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Tag Archives: Colorado

Faulty Workmanship Exclusion in Professional Liability Policy Bars Coverage for Faulty Design and Construction

Posted in Professional Services
The United States District Court for the District of Colorado, applying Colorado law, has held that an arbitration award for faulty design and construction was potentially recoverable as “damages” under a professional liability policy, but coverage was ultimately precluded by an unambiguous and broad “Faulty Workmanship” exclusion.  Rockhill Ins. Co. v. CFI-Global Fisheries Mgmt., 2018… Continue Reading

Excess Insurer Standing in Shoes of Insured for Equitable Subrogation Claim against Primary Insurer Must Prove Bad Faith

Posted in Bad faith/duty to settle
A Colorado appeals court has held that Colorado law does not recognize an independent equitable subrogation claim by an excess insurer against a primary insurer to recover a settlement paid by the excess insurer.  Preferred Prof’l Ins. Co. v. The Doctors Co., 2018 WL 1633269 (Colo. App. Apr. 5, 2018).  Rather, an excess insurer’s rights… Continue Reading

Claim based on Failed IT Transition Does Not Involve Property Damage or Loss of Use

Posted in Cyber Policies and Issues
A Colorado federal district court, applying Colorado law, has held that a claim against an information technology consulting firm arising from the firm’s alleged mismanagement of a project to replace its client’s systems did not involve “property damage” (including “loss of use”) under a CGL policy.  Ciber, Inc. v. Federal Ins. Co., No. 16-cv-01957-PAB-MEH (D.… Continue Reading

Letter Alleging Wrongful Termination and Seeking Reinstatement Constitutes a “Demand for Damages or Other Relief”

Posted in “Claim”
In a win for Wiley Rein’s client, the U.S. District Court for the District of Colorado has held that a liability insurer had no duty to defend an Equal Employment Opportunity Commission (EEOC) charge and related lawsuit on the basis that a letter predating the charge and lawsuit was a “claim” first made prior to… Continue Reading

SEC Subpoenas & Formal Investigative Order Are Not “Claims” Alleging “Wrongful Acts”

Posted in “Claim”
The United States Court of Appeals for the Tenth Circuit, applying Colorado law, has held that a formal investigative order issued by the U.S. Securities & Exchange Commission (“SEC”) and related subpoenas did not constitute “Claims” alleging “Wrongful Acts” as defined under a D&O policy.  MusclePharm Corp. v. Liberty Ins. Underwriters, Inc., 2017 WL 4675701… Continue Reading

Separate Lawsuits Part of a Single Claim First Made Prior to Policy Period

Posted in “Claim”, Related Claims and associated exclusions
The United States District Court for the District of Colorado, applying Colorado law, has held that two lawsuits were connected by the “single scheme” of a contractor to interfere with a government contract for a surveillance camera system.  Ciber, Inc. v. Ace Am. Ins. Co., 2017 WL 2537092 (D. Colo. June 9, 2017).  The district… Continue Reading

Allegations Concerning Wage Fixing in Violation of the Sherman Act Do Not Fall Within Professional Liability Coverage for “Counseling” Services

Posted in Dishonesty Exclusion, Personal Profit/Advantage exclusion, Professional Services
Applying Colorado law, the United States District Court for the District of Colorado has held that allegations of collusion to fix wages in violation of the Sherman Antitrust Act do not fall within the scope of professional liability coverage for “counseling” services because “counseling” does not include an alleged agreement to fix wages.  Colony Ins.… Continue Reading

Bank’s Failure to Submit Proof of Loss Precludes FDIC’s Claim as Receiver Under Crime Bond

Posted in Notice of Potential Claim (Timeliness)
The Court of Appeals for the Tenth Circuit, applying Colorado law, has held that an insurer’s denial of coverage to the Federal Deposit Insurance Corporation (FDIC), standing in the shoes of an insured as receiver, does not violate public policy where the insured’s rights under a policy have not vested.  FDIC v. Kan. Bankers Sur.… Continue Reading

Colorado Supreme Court: No Prejudice Required to Deny Coverage for Settlement Without Consent

Posted in Consent to settle/incur defense costs, Cooperation
The Colorado Supreme Court has held that an insurer had no duty to cover a settlement entered into by an insured regardless whether the insured’s failure to obtain the insurer’s consent prejudiced it in any way. Travelers Prop. Cas. Co. v. Stresscon Co., 2016 WL 1639565 (Colo. Apr. 25, 2016). Wiley Rein represented an amicus… Continue Reading