Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Tag Archives: New Jersey

No Coverage Due to Material Misrepresentation on Insurance Application Based on Totality of Circumstances

Posted in Prior Knowledge/Warranty Exclusion, Rescission
An intermediate New Jersey appellate court has affirmed a trial court’s decision concluding that no coverage was available for a legal malpractice claim because the insured law firm made material misrepresentations on its insurance renewal application in failing to disclose the insured’s knowledge of circumstances that could result in a professional liability claim.  Ironshore Indem.,… Continue Reading

Court Holds Insurance Exclusion Bars Coverage for Lawsuit Arising Out Of Lapse in Client’s Insurance Policy

Posted in Professional Services, Wrongful Act
The United States District Court for the District of New Jersey has held that an exclusion in a professional liability policy applicable to claims arising out of the failure to effect or maintain any insurance precludes coverage for defense costs incurred in an action against an insured on the basis that the action arose out… Continue Reading

Allegations of Fraudulent Scheme by Lawyer to Induce Payment of Insurance Benefits Constitutes “Professional Legal Services”

Posted in Dishonesty Exclusion, Prior Knowledge/Warranty Exclusion, Professional Services
The United States District Court for the District of New Jersey has held that allegations that a lawyer and his law firm engaged in a fraudulent insurance scheme to induce payment of personal injury protection benefits while representing clients constituted “Professional Legal Services” under the firm’s professional liability policy, triggering the duty to defend.  Arzadi… Continue Reading

No Crime Coverage for Amounts Wired by Insured’s Customer to Fraudster Posing as Insured

Posted in Cyber Policies and Issues
A New Jersey federal district court has held that a commercial crime policy does not afford coverage for a loss caused by a fraudulent wire instruction scheme where an imposter, posing as the insured, directed the insured’s customer to pay receivables to the impostor’s account.  Posco Daewoo America Corp. v. Allnex USA, Inc., No. 52:17-cv-00483-JMV-MF… Continue Reading

Court Holds that Insured’s Expectations Do Not Override Language of Consumer Protection Exclusion

Posted in Wrongful Act
A New Jersey federal district court, applying New Jersey law, has held that a professional liability insurer was entitled to judgment on the pleadings on the basis that coverage for a complaint against its insured for violations of consumer protection laws was barred by the policy’s exclusion for consumer protection claims.  Hanover Insurance Co. v.… Continue Reading

Following New Jersey Statutory Merger, Surviving Entity Acquires All Rights and Obligations Under Target Entity’s Insurance Policy

Posted in Other Insurance
A New Jersey federal court has held that, following a statutory merger under New Jersey law, the surviving entity acquired the target entity’s rights under its directors and officers liability insurance policy by operation of law and was entitled to reimbursement for post-merger defense costs incurred in defending the target entity’s directors in shareholder class… Continue Reading

Insured vs. Insured Exclusion Bars Coverage for Claim Brought by Insured and Officers Against Another Officer

Posted in Insured v. Insured Exclusion
The Superior Court of New Jersey, Appellate Division, applying New Jersey law, has held that an insured vs. insured exclusion bars coverage under a directors and officers liability policy for counterclaims brought against an officer by the company and fellow officers.  Abboud v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 2017 WL 2665133 (N.J.… Continue Reading

Failure to Disclose Untimely Filings on Application Voids Lawyer’s Policy

Posted in Rescission
The United States District Court for the District of New Jersey, applying New Jersey law, has held that an insured attorney’s failure to disclose on an insurance application an appeal filed late and a lawsuit filed outside of the statute of limitations constitutes a material misrepresentation warranting a default judgment voiding the policy.  Liberty Ins.… Continue Reading

Quality of Services Exclusion Bars Coverage for Online Auction Service’s Alleged Misrepresentations About Its Reliability

Posted in Cyber Policies and Issues
In another win for an insurer represented by Wiley Rein, the United States District Court for the Middle District of Florida, applying New Jersey and Florida law, has held that the quality of services exclusion in a technology errors and omissions policy barred coverage for a claim that the insured negligently misrepresented the safety and… Continue Reading

No Coverage for Voluntary Remediation Because Insured Not “Legally Obligated to Pay” for Work

Posted in Breach of Contract, Loss
In a win for a Wiley Rein client, the United States District Court for the District of New Jersey, applying New Jersey law, held that no coverage was available under an errors and omissions policy for remediation work performed by an insured because the insured was not “legally obligated to pay” for the remediation.  Wyndham… Continue Reading

Declaratory Judgment Complaint Not Subject to Insurer’s Motion to Dismiss Based on Conversion of Funds Exclusion

Posted in Coverage Litigation - Declaratory Judgment Actions, Exclusion lead-in language (Arising out of)
A New Jersey federal district court has held that a declaratory judgment and breach of contract action against a professional liability insurer was not subject to dismissal for failure to state a claim based on the policy’s conversion of funds exclusion as a matter of law because the court could not conclude whether conversion occurred,… Continue Reading

Appeals Court Vacates Ruling that Breach of Contract Exclusion Barred Coverage, Remands for Consideration of Choice of Law

Posted in Breach of Contract, Professional Services
A New Jersey intermediate court of appeals has vacated and remanded a case in which the trial court held that an insurer had no duty to defend based on a breach of contract exclusion, because the appellate court could not determine whether the exclusion applied without a choice of law analysis. Pharmacy & Healthcare Commc’ns,… Continue Reading

Specific Litigation Exclusion Bars Coverage for Condo Owners’ Second Lawsuit against Condo Association

Posted in Bad faith/duty to settle, Related Claims and associated exclusions
Applying New Jersey law, a New Jersey federal court held that a specific litigation exclusion barred coverage for a second lawsuit brought against a condominium association by the same condominium owners. The One James Plaza Condo. Assoc., Inc. v. RSUI Group, Inc., 2015 WL 7760179 (D.N.J. Dec. 2, 2015). In addition, the court held that… Continue Reading