Applying Montana law, the Ninth Circuit Court of Appeals has held that a claim made during one claims-made policy period but not noticed until a second policy period was not covered under either policy. Capitol Specialty Ins. Corp. v. Big Sky Diagnostic Imaging, Inc., 2021 WL 1564349 (9th Cir. Apr. 21, 2021).  The court also ruled that the notice-prejudice rule does not apply to claims-made-and-reported policies when the claim is reported after the policy period.

Continue Reading Ninth Circuit Holds Notice-Prejudice Rule Inapplicable to Claims-Made-And-Reported Policies

The Montana Supreme Court has held that there was no coverage under a lawyers professional liability policy for a client’s malpractice claim because the lawyer knew of and failed to disclose, prior to the insured law firm’s procurement of the policy, the sanctions and default judgment that were the bases of the client’s claim.  ALPS Prop. & Cas. Ins. Co. v. Keller, Reynolds, Drake, Johnson & Gillespie P.C., 2021 WL 688561 (Mont. Feb. 23, 2021).  The court also held that there was no coverage under the policy’s “innocent insured” provision, and that the common law “innocent insured” and “reasonable expectations” doctrines did not preserve coverage for other members of the insured firm.

Continue Reading Prior Knowledge Provisions Barred Coverage for Malpractice Claim Based on Pre-Policy Sanctions and Default Judgment

A Montana federal district court has ruled that a false pretense exclusion did not preclude coverage under a crime policy for monetary losses resulting from a fraudulent email scheme, reasoning that the exclusion was ambiguous.  Ad Advert. Design, Inc. v. Sentinel Ins. Co., 2018 WL 4621744 (D. Mont. Sept. 26, 2018).  The court also held that further briefing was necessary to determine the amount recoverable under the policy.

Continue Reading Monetary Loss from Fraudulent Email Scheme Triggers Coverage Under Business Owners’ Policy

The Supreme Court of Montana has held that a Montana statute allowing insurers to “prevent a recovery” under an insurance policy in certain circumstances, including when the insured made misrepresentations or omissions in its application, does not provide a right to rescind the policy ab initioALPS Prop. & Cas. Ins. Co. v. McLean & McLean, PLLP, 2018 WL 3737950 (Mont. Aug. 7, 2018).  The court also held that an innocent insured attorney had a reasonable expectation of retaining attorney malpractice insurance by purchasing an extended reporting period endorsement.

Continue Reading Montana Supreme Court Holds Insurer Does Not Have Statutory Right to Rescind Lawyers’ Professional Liability Policy

A Montana federal district court has held that an insurer was estopped from invoking a policy’s arbitration clause where the insurer had breached its duty to defend by improperly relying on a creditor exclusion in the policy.  Am. Trucking & Transp. Ins. Co. v. Nelson, 2018 WL 1902700 (D. Mont. Apr. 20, 2018).

Continue Reading Insurer Cannot Invoke Arbitration Clause Following Breach of Duty to Defend

Applying Montana law, the United States District Court for the District of Montana has held that a D&O policy’s personal profit exclusion, which was implicated by a finding of conversion against an insured director, did not relieve the insurer of the duty to advance defense costs for the other remaining causes of action against the director.  Johnson v. Federated Rural Elec. Ins. Exch., 2016 WL 7243526 (D. Mont. Dec. 14, 2016).

Continue Reading Personal Profit Exclusion Does Not Relieve Insurer of Duty to Advance Defense Costs for Other Pending Causes of Action

The Montana Supreme Court has held that, even where an insurer breaches its duty to defend and is estopped from denying coverage for a later settlement, the insurer is still entitled to challenge the reasonableness of the settlement, and the court must assess the merits and value of the underlying case in assessing the settlement amount. Tidyman’s Mgmt. Servs., Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 2016 WL 4440634 (Mont. Aug. 23, 2016).
Continue Reading Montana High Court Rules that Evaluation of Reasonableness of Stipulated Settlement Must Consider the Merits and Value of the Underlying Case