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The U.S. District Court for the Northern District of Illinois, applying Illinois law, has concluded that a question of fact exists regarding when a “claim” was “first made” where the recipient of a “claim” sent via email allegedly did not become aware of the claim until days after it was received in the recipient’s inbox, after the end of the policy period.  Lloyd’s Syndicate 3624 (Hiscox) v. Clow, 2020 WL 4194213 (N.D. Ill. July 21, 2020).
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Continue Reading Question of Fact When “Claim” “First Made” Where Insured Allegedly Did Not Become Aware of Claim Until After Policy Period

The U.S. Court of Appeals for the Seventh Circuit, applying Illinois law, has held that a written demand for monetary relief, made as part of an ongoing civil proceeding, cannot constitute a second Claim distinct from the Claim already initiated by the civil proceeding itself under a claims-made policy.  Market Street Bancshares, Inc. v. Fed. Ins. Co., 2020 WL 3396303 (7th Cir. June 19, 2020).  The court based its holding on both the policy’s text and the principles underlying claims-made coverage.
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Continue Reading “Written Demand” Made Within a “Civil Proceeding” is Not a New Claim

The Illinois Court of Appeals, applying Illinois law, affirmed a trial court’s ruling that an insurer did not act in bad faith by denying coverage where there was a “bona fide” coverage dispute concerning an underlying lawsuit against the insured.  Nine Grp. II, LLC v. Liberty Int’l Underwriters, Inc., 2020 Ill. App. WL 190320 (Ill. Ct. App. Jun. 18, 2020).  The court held that the trial court had correctly refused to award certain costs to the insured under an Illinois statute applicable where an insurers’ conduct is “vexatious and unreasonable.”
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Continue Reading Illinois Court of Appeals Rules Insurer Did Not Act in Bad Faith in Denying Coverage Where Claim Was Made Before Policy Period

Applying Illinois law, a federal district court has held that an insurer had no duty to defend or indemnify an insured for a lawsuit that derived in part from facts or circumstances that were the subject of an EEOC charge filed during a prior policy period.  U.S. Specialty Ins. Co. v. Village of Melrose Park, 2020 WL 1923076 (N.D. Ill. April 21, 2020).
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Continue Reading No Duty to Defend or Indemnify Lawsuit Overlapping With Prior EEOC Charge

An Illinois federal district court has ruled that a technology company’s failure to provide timely notice of a computer outage and related email demand barred coverage for a later-filed lawsuit.  Hartford Fire Ins. Co. v. iNetworks Servs., LLC, 2020 WL 1491139 (N.D. Ill. Mar. 27, 2020).
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Continue Reading Untimely Notice of Server Outage and Related Client Communications Bars Coverage for Claim Filed against Technology Service Provider

Applying Illinois law, the United States District Court for the Central District of Illinois has held that an insurer had no duty to cover defense costs for affirmative claims that involved, but were not brought by, its insured.  Marquis Energy LLC v. Federal Ins. Co., 2020 WL 853503 (C.D. Ill. Feb. 20, 2020).
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Continue Reading Insurer Has No Duty to Defend Insured in “Defensive” Arbitration Proceeding

The United States District Court for the Northern District of Illinois, applying Illinois law, has held that there is no coverage under a D&O policy where the insured did not timely report a declaratory judgment lawsuit and instead sought coverage only after an amended complaint was filed in the successive policy period.  Hanover Ins. Co. v. R.W. Dunteman Co., 2020 WL 1275002 (N.D. Ill. Mar. 17, 2020).  The court held that the complaints were part of a single “claim” and not separate “claims” even though the amended complaint added insured defendants and theories of liability.
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Continue Reading Declaratory Judgment Complaint Constitutes a Reportable Claim for a Wrongful Act; Subsequent Amended Complaint Adding Insured Defendants Not a Separate Claim

An Illinois intermediate appellate court, applying Illinois law, has held that an insurer must defend an attorney against a malpractice claim seeking damages for alleged negligence in the amount of fees paid to the attorney, concluding that the “legal fees” exclusion in the policy did not apply because the injury suffered by the claimant was not a consequence of the lawyer’s fees.  Illinois State Bar Ass’n Mut. Ins. Co.  v. Canulli, No. 1-19-0142 (Ill. App. Ct. March 13, 2020).
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Continue Reading Insurer Must Defend Legal Malpractice Claim for Damages in the Amount of Fees Paid, Despite Carve Out of “Legal Fees” from Definition of “Damages”

Applying Illinois Law, the United States District Court for the Northern District of Illinois has held that an insurer had no duty to defend a claim reported more than nine months after the end of the policy period.  Wesco Ins. Co. v. Elements Architectural Grp., Inc., 2019 WL 5725440 (N.D. Ill. Nov. 5, 2019).
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Continue Reading Obligation to Timely Report Claim Applies Even if Claim Appears to Have Been Abandoned

This article was originally published in Law360. 

In Sanders v. Illinois Union Insurance Company, the Supreme Court of the State of Illinois resolved a split in state and federal decisions applying Illinois law on trigger of coverage in the context of wrongful incarceration.[1]

According to the Illinois Supreme Court, the City of Chicago Heights’ insurers had no coverage obligation under policies in effect when the claimant was retried for murder and exonerated, two decades after the initiation of the prosecution. As a result, Illinois law on trigger of coverage for wrongful incarceration lawsuits is now on all fours with decisions by courts nationwide.

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Continue Reading Ill. Ruling Clarifies Wrongful Incarceration Insurance Triggers