By Karen L. Toto on Posted in LossA New York appellate court has held that a $140 million disgorgement payment by an insured broker-dealer to the U.S. Securities and Exchange Commission does not constitute insurable loss even though the payment did not disgorge the insured’s own ill-gotten gains, but rather those of its customers. J.P. Morgan Secs. Inc. v. Vigilant Ins. Co.,… Continue Reading
By Bonnie Thompson on Posted in Related Claims and associated exclusionsA New York state court, applying New York law, has held that an insurer was not entitled to summary judgment based on a prior and pending litigation exclusion because the insurer could not establish that the prior investigation shared a common fact, circumstance, situation, transaction or event with the matter at issue or that any… Continue Reading
By Matthew W. Beato on Posted in Loss,Public Policy prohibition on insuranceApplying New York law, the Delaware Supreme Court has held that settlement payments that were not conclusively linked to disgorgement damages were insurable under New York public policy. In re TIAA-CREF Ins. Appeals, 2018 WL 3620873 (Del. July 30, 2018).… Continue Reading
By Bonnie Thompson on Posted in Cyber Policies and IssuesThe U.S. Court of Appeals for the Second Circuit, applying New York law, has held that an email spoofing attack was covered under a computer fraud policy because the attack involved manipulating the insureds’ email system. Medidata Solutions Inc. v. Federal Ins. Co., No. 17-2492-cv (2d Cir. July 6, 2018)… Continue Reading
By Margaret Thomas on Posted in Bad faith/duty to settle,Prior Knowledge/Warranty Exclusion,Related Claims and associated exclusionsThe United States District Court for the Northern District of Illinois, applying New York law, has held that a real estate service firm’s professional liability insurance policies cover four claims regarding the firm’s allegedly improper use of a certain appraisal methodology because neither the prior knowledge exclusion nor an exclusion regarding investment activity applied. Cushman… Continue Reading
By Edward R. Brown on 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
By Hume Ross on Posted in Dishonesty ExclusionThe United States District Court for the Southern District of Ohio, applying Ohio and New York law, has held that a jury verdict determining that an insured participated in a civil conspiracy to make false statements about competitors incorporated a finding that the statements were intentional and “dishonest” within the meaning of a professional liability… Continue Reading
By Margaret Thomas on Posted in Excess insurance/exhaustionThe United States Court of Appeals for the Ninth Circuit has held that a New York choice of law provision in a policy issued by an international insurer is enforceable and that, under either New York or California law, an excess policy was not triggered when the underlying policy limits were not exhausted through payments… Continue Reading
By Danielle Barondess on Posted in RescissionThe United States District Court for the Southern District of New York, applying New York law, has held that an insurer was entitled to rescind a lawyers professional liability policy because the insured law firm made a material misrepresentation in its application. Travelers Cas. & Surety Co. of Am. v. Gold, Schollar, Moshan, PLLC, 2018… Continue Reading
By Ashley E. Eiler on Posted in Notice of Potential Claim (Timeliness)Applying Arizona and New York law, an Arizona trial court has held that a claims-made-and-reported policy unambiguously does not apply where the insured failed to notify the insurer of a claim before the policy’s reporting deadline. Southwest Energy Systems LLC v. Underwriters at Lloyd’s, London, Case No. 2017-015010 (Ariz. Super. Ct., Maricopa Cnty. Mar. 15,… Continue Reading
By Edward R. Brown on Posted in Loss,Professional ServicesA New York federal district court, applying New York law, has held that the sending of unsolicited text message advertisements in violation of the Telephone Consumer Protection Act (TCPA) triggered professional services coverage under a Miscellaneous Professional Liability (MPL) policy. Illinois Union Ins. Co. v. US Bus Charter & Limo, Inc., 2018 WL 1193464 (E.D.N.Y.… Continue Reading
By Nathan Lovett on Posted in “Claim”,Notice of ClaimThe United States District Court for the Southern District of Mississippi has held that notice of an underlying accident sent to the insured’s three insurance carriers represented a timely “claim” under the claims-made general liability policies at issue in light of the insurers’ course of conduct upon receipt of the notice. Jordan v. Maxfield &… Continue Reading
By Jason P. Cronic on Posted in Corporate ConsiderationsA New York trial court has rejected a “disclosure-only” settlement in a shareholder class action, determining that the disclosures were not sufficiently beneficial to the class to support the settlement or the related plaintiffs’ fee award. City Trading Fund v. Nye, Index No. 651668/2014 (Sup. Ct. NY County Feb. 8, 2018).… Continue Reading
By Ashley-Anne L. Criss on Posted in Related Claims and associated exclusions,Wrongful ActThe U.S. Court of Appeals for the Eleventh Circuit has held that a prior acts exclusion in a directors and officers liability policy does not bar coverage for a lawsuit brought by the Federal Deposit Insurance Corporation (FDIC) against a failed bank, because the wrongful acts at issue occurred after the prior acts date and… Continue Reading
By Nicole Audet Richardson on Posted in Insured v. Insured ExclusionApplying both New York and Nevada law, the United States Court of Appeals for the Second Circuit has held that an insurer correctly denied coverage under its directors and officers liability policy based on the insured v. insured exclusion. Intelligent Digital Sys. L.L.C. et al. v. Beazley Ins. Co., 2017 WL 4127540 (2d Cir. Sept.… Continue Reading
By Ashley-Anne L. Criss on Posted in “Claim”,Personal Profit/Advantage exclusionA New York state trial court, applying New York law, has held that a fee arrangement exclusion contained in a professional liability insurance policy precludes coverage for claims arising from an insured’s force-placed insurance business. QBE Americas, Inc. v. Ace Am. Ins. Co., 2017 WL 4122651 (Sup. Ct., N.Y. County Sept. 18, 2017). The court… Continue Reading
By Matthew W. Beato on Posted in “Claim”The United States District Court for the Southern District of New York has held that subpoenas and a formal investigative order issued by the U.S. Securities & Exchange Commission (“SEC”) constituted “Claims” as defined under a D&O policy. Patriarch Partners LLC v. AXIS Ins. Co., 2017 WL 4233078 (S.D.N.Y. Sept. 22, 2017).… Continue Reading
By on Posted in Cyber Policies and IssuesThe United States District Court for the Southern District of New York, applying New York law, has held that a cloud-based service provider’s loss resulting from fraudulent wire instructions is covered under a computer fraud and funds transfer fraud policy because the fraudulent email changed data in the provider’s computer system despite use of a… Continue Reading
By Karen L. Toto on Posted in Consent to settle/incur defense costsApplying New York law, a New York intermediate appellate court has held that insurers’ unreasonable delay in addressing an insured’s claim and their repeated insistence that several policy provisions barred coverage for the claim alleviated the insured’s obligation to seek the insurers’ consent to settle. J.P. Morgan Securities Inc. v. Vigilant Ins. Co., 2017 WL… Continue Reading
By Matthew W. Beato on Posted in Coverage Litigation - Declaratory Judgment ActionsJudge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York has held that a Bermuda insurer must post a bond pursuant to N.Y. Ins. Law § 1213 after it filed a motion to compel arbitration. MF Global Holdings Ltd. v. Allied World Assur. Co., Ltd., 2017 WL 2533353 (Bankr. S.D.N.Y.… Continue Reading
By Ashley-Anne L. Criss on Posted in RescissionIn a win for Wiley Rein’s client, the Second Circuit has upheld a judgment declaring an accountants professional liability policy to be void ab initio based on material misrepresentations in the insured’s application for coverage. Continental Cas. Co. v. Boughton, 2017 WL 2416902 (2d Cir. June 5, 2017). The appellate court held that (1) the… Continue Reading
By Bonnie Thompson on Posted in Loss,Personal Profit/Advantage exclusion,Prior Knowledge/Warranty ExclusionA New York trial court, applying New York law, has held that a $140 million disgorgement payment by an insured broker-dealer to the U.S. Securities and Exchange Commission constitutes insurable loss, based on evidence that the payment did not disgorge the insured’s ill-gotten gains, but rather those of its customers. J.P. Morgan Secs. Inc. v.… Continue Reading
By Bonnie Thompson on Posted in Consent to settle/incur defense costsThe United States District Court for the Southern District of New York, applying New York law, has held that two judgment creditors of an insured were not entitled to insurance policy proceeds where the insured had breached the terms of the policy by allowing a default judgment to be entered against it. XL Specialty Ins.… Continue Reading
By Jessica N. Gallinaro on Posted in UncategorizedThe New York Supreme Court, Appellate Division, applying New York law, has held that no coverage was available under a lawyer’s professional liability policy for a counterclaim filed against the insured because of an exclusion barring coverage for claims arising out of the insured’s services and/or capacity as an officer, director, partner, or employee of… Continue Reading
