Applying Illinois law, a federal district court has held that ten lawsuits against an anatomical donation company for alleged mishandling and sale of human body parts are “related” and constitute a single “Claim” under a professional liability policy. Lloyd’s Syndicate 3624 v. Biological Res. Ctr. of Ill., LLC, 2018 WL 4489589 (N.D. Ill. Sept. 19,… Continue Reading
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Resident’s Three Claims Against Condo Association Spanning Multiple Years Deemed Single Claim Subject to Single Limit
Posted in Related Claims and associated exclusions, Wrongful ActThe United States District Court for the Northern District of Illinois has held that three claims brought by a resident against a condominium owners’ association for alleged discrimination and retaliation involved related wrongful acts and therefore are properly treated as a single Claim deemed first made during the claims-made policy period when the first such… Continue Reading
No Duty to Defend Under Claims-Made-and-Reported Policy Where Notice of Claim Given Nine Months After Cancellation
Posted in “Claim”, Notice of ClaimAn Illinois appellate court has held that a trial court properly awarded judgment to an insurer because it had no duty to defend or indemnify its insured under its claims-made-and-reported policy where notice of the underlying negligence lawsuit came in more than nine months after the policy was cancelled. Southwest Disabilities Services and Support v.… Continue Reading
Intentional Acts Exclusion Precludes Duty to Defend Complaint Alleging Willful Conduct
Posted in Dishonesty ExclusionAn Illinois intermediate appellate court has held that an intentional acts exclusion precluded a duty to defend a lawsuit alleging that an insured engaged in willful misconduct. Ill. State Bar Ass’n Mut. Ins. Co. v. Leighton Legal Grp., Inc., 2018 WL 2688182 (Ill. App. Ct. May 22, 2018).… Continue Reading
Claim Arising from Sale of Dental Practice Does Not Involve Professional Services
Posted in Professional ServicesAn Illinois federal district court has held that a claim alleging that a dentist overstated the value of his dental practice to increase the practice’s sale price is not a claim for “professional services” under the dentist’s professional liability policy. Medical Protective Co. v. Fabricius, 2018 WL 2561009 (N.D. Ill. June 4, 2018).… Continue Reading
Court Holds that Government-Issued Subpoena Constitutes a Claim
Posted in “Claim”, Excess insurance/exhaustionThe United States District Court for the Northern District of Illinois, applying Illinois law, has held that a government-issued subpoena constituted a Claim under the directors and officers liability policies at issue, thus allowing a company’s coverage action to proceed against its primary and excess insurers. Astellas US Holding, Inc. v. Starr Indem. & Liab.… Continue Reading
Multiple Claims Arising from Employee’s Termination Deemed Related
Posted in Related Claims and associated exclusionsAn Illinois federal court has held that multiple claims arising from the termination of a single employee arose from the same “Interrelated Wrongful Acts” and were deemed a single claim made at the time of the first such claim. Twin City Fire Ins. Co. v. Permatron Corp., 2018 WL 1565599 (N.D. Ill. Mar. 30, 2018).… Continue Reading
Two Exclusions Bar Coverage under Cyber Policy for TCPA Claim
Posted in Cyber Policies and IssuesA New York federal district court has ruled that two exclusions in a cyber risk policy barred coverage for a claim alleging violations of the Telephone Consumer Protection Act (TCPA). Flores v. ACE American Ins. Co., No. 17-cv-8674 (S.D.N.Y. Apr. 30, 2018). Among other rulings, the court held that the TCPA was not a “Privacy Regulation”… Continue Reading
Insurer May Not Rescind Renewal Policy Based on Misrepresentations in Prior Policy’s Application
Posted in Loss, Prior Knowledge/Warranty Exclusion, RescissionAn Illinois intermediate appellate court, applying Illinois law, has held that a renewal insurance policy may only be rescinded based on material misrepresentations made in the renewal application, and not based on misrepresentations made in applications for prior policies. Ill. State Bar Ass’n Mut. Ins. Co. v. Rex Carr Law Firm, 2017 WL 2806126 (Ill.… Continue Reading
No E&O Coverage Where Insured Failed to Report Claim During Policy Period When It Was First Made
Posted in “Claim”, Notice of ClaimThe Appellate Court of Illinois, applying Illinois law, has held that an insurer has no duty to defend or indemnify an insurance agent under an errors and omissions liability policy where the agent failed to provide notice of the claim during the policy period in which the claim was first made. James River Ins. Co.… Continue Reading
Insurer Not Estopped from Asserting Policy Defenses Where Insured Had Duty to Defend; Insured-v.-Insured Exclusion Does Not Bar Coverage for Claims by Former Shareholders
Posted in “Claim”, Insured v. Insured Exclusion, Related Claims and associated exclusionsAn Illinois federal court, applying Illinois law, has held that an insurer who declined to advance defense costs was not estopped from asserting policy defenses in a coverage action later filed by the policyholder corporation. Vita Food Prods., Inc. v. Navigators Ins. Co., 2017 WL 2404981 (N.D. Ill. June 2, 2017). The court also held… Continue Reading
Failure to Defend and Bring Timely Coverage Action Precludes Insurer from Raising Policy Defenses Under Illinois Law
Posted in Defense Costs, Dishonesty Exclusion, Prior Knowledge/Warranty ExclusionApplying Illinois law, the United States Court of Appeals for the Seventh Circuit has held that an insurer who initially refused to defend its insured and waited five years to bring an action for declaratory relief was precluded from raising policy defenses to indemnity. Title Indus. Assurance Co. v. First American Title Ins. Co., 2017… Continue Reading
Explicit Allegation of Acts Arising from Professional Services Required to Trigger E&O Policy
Posted in Professional ServicesApplying Illinois law, the United States Court of Appeals for the Seventh Circuit has held that a lawsuit that mentioned that the insured provided professional services to the claimant, but did not directly assert that any of the wrongdoing in the complaint arose from those services, was not a covered claim under a real estate… Continue Reading
Underlying Insurer’s Agreement to Pay Limits Does Not Trigger Exhaustion for Excess Policy Requiring “Actual Payment”
Posted in Excess insurance/exhaustionAn Illinois intermediate appellate court has held that excess insurance policies requiring “actual payment” by an underlying insurer for exhaustion purposes were not triggered where the insurer “pledged” its policy as collateral and agreed to advance defense costs until its policy was exhausted but did not make “actual payment” in legal currency. Ritchie v. Arch… Continue Reading
Insurer Entitled to Rescind Lawyers Professional Liability Policy Where Insured Made Material Misrepresentations in Application
Posted in Rescission, Rescission-Materiality, Rescission-WaiverThe U.S. District Court for the Southern District of Illinois, applying Illinois law, has held that an insurer was entitled to rescission of a policy where the insured made material misrepresentations in its application. Carolina Cas. Ins. Co. v. Robert S. Forbes PC, 2017 WL 86136 (S.D. Ill. Jan. 10, 2017). The court also held that… Continue Reading
Insurer Has No Duty to Defend Claim Seeking Restitution and Other Unspecified Relief
Posted in Loss, Personal Profit/Advantage exclusion, Wrongful ActAn Illinois federal district court has held that a lawsuit seeking to recover amounts an insured wrongfully refused to pay to another sought only uninsurable restitutionary-type relief, not “Damages,” and thus did not trigger an insurer’s defense obligations under an E&O policy. Westport Ins. Corp. v. M.L. Sullivan Ins. Agency, Inc., 2017 WL 56635 (N.D.… Continue Reading
Court Finds EEOC Charge and Subsequent Lawsuit to Be Two Separate Claims Under Claims-Made Policy
Posted in “Claim”, Related Claims and associated exclusionsThe United States District Court for the Northern District of Illinois, applying federal and Illinois law, has found that an employment discrimination lawsuit was “first made” within a professional liability policy’s policy period despite the fact that the lawsuit’s required precursor, an Equal Employment Opportunity Commission (EEOC) charge, was filed before the policy period. John… Continue Reading
Certain Extrinsic Evidence Permissible for Purposes of Establishing No Duty to Defend Under Illinois Law
Posted in Defense CostsThe United States Court of Appeals for the Seventh Circuit, applying Illinois law, has held that extrinsic evidence that does not decide an “ultimate issue” in the underlying claim may be admitted in a declaratory judgment action for purposes of establishing that an insurer has no duty to defend. Landmark Am. Ins. Co. v. Hilger,… Continue Reading
Lawyer’s Material Misrepresentations in Policy Renewal Applications Justify Rescission
Posted in Notice of Potential Claim (Timeliness), RescissionA federal district court in Illinois has granted an insurer’s motion for summary judgment rescinding three consecutive professional liability policies. This comes after the court determined under Illinois law that the insured attorney made material misrepresentations in each of the renewal applications. Minn. Lawyers Mut. Ins. Co. v. Schulman, 2016 WL 4988006 (N.D. Ill. Sept.… Continue Reading
Attorney’s Reporting of Alleged Ethics Violations Not “Professional Services”; Eight-Month Delay in Providing Notice Precludes Coverage as a Matter of Law
Posted in Notice of ClaimAn Illinois federal district court has granted a commercial general liability insurer’s motion for summary judgment that it had no duty to defend or indemnify an insured law firm or its principals in a defamation action based on the insureds’ failure to comply with the notice provisions in the policy. Sentinel Ins. Co., Ltd. v.… Continue Reading
Federal Appellate Court Declares “Language of the Policy is King” in Affirming Application of Contract Exclusion
Posted in Breach of Contract, Breach of Contract – coverage for amounts due pursuant to contract, exclusionsThe United States Court of Appeals for the Seventh Circuit has affirmed a trial court’s ruling that, under Illinois law, a contract exclusion applied to preclude coverage for a claim stemming from an insured’s failure to pay its contractor because all of the claimant’s causes of action arose from its contract with the insured. Altom… Continue Reading
Due to Lack of Notice, E&O Carrier Has No Duty to Indemnify Insured Auto Insurer’s Settlement Payment Stemming from Bad Faith Claim
Posted in “Claim”, Consent to settle/incur defense costs, Notice of ClaimAn Illinois federal court, applying Illinois law, has ruled that, due to lack of proper notice, an E&O insurer had no duty to indemnify its insured auto insurance company’s $7 million settlement payment stemming from a bad faith claim in an underlying auto accident lawsuit. Lexington Ins. Co. v. Horace Mann Ins. Co., 2016 WL… Continue Reading
Legal Fees Exclusion Bars Coverage for Arbitration Award that “In Substance” Reduced Fees Owed to Insured Law Firm
Posted in Other: “Legal Fees” ExclusionThe United States Court of Appeals for the Seventh Circuit, applying Illinois law, has held that an exclusion barring coverage for “claim[s] for legal fees, costs or disbursements paid or owed to you” applies to bar coverage for an arbitration award adjusting the amount of attorneys’ fees owed to an insured law firm. Edward T.… Continue Reading
Seventh Circuit Holds Insured’s Material Misrepresentations in Application Warrant Rescission of Policy
Posted in RescissionApplying Illinois law, the United States Court of Appeals for the Seventh Circuit has held that a medical service provider’s material misrepresentations regarding its use of non-traditional and experimental weight loss drugs and procedures warranted rescission of its professional liability coverage. Essex Ins. Co. v. Galilee Med. Cntr.¸ 2016 WL 851688 (7th Cir. Feb. 10,… Continue Reading