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The United States District Court for the Southern District of New York has held that an insurer has a duty to defend its insured’s subsidiary in a class action lawsuit that alleges wrongful conduct that occurred prior to the parent’s acquisition of the subsidiary, rejecting the insurer’s argument that the policies’ “Related Acts” definition precluded coverage. Great Am. Ins. Co. v. AIG Specialty Ins. Co., 2021 WL 1268450 (S.D.N.Y. Apr. 6, 2021).…
Continue Reading Wrongful Acts Alleged in Class Action Based on Corporate Policy Are Not “Related Acts”

Applying New York law, the United States District Court for the Southern District of New York has held that an SEC investigation of the insured company did not constitute a “Securities Claim,” where the term expressly excluded investigations.  Hertz Global Holdings, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 2021 WL 1198802 (S.D.N.Y. Mar. 30, 2021).  The court likewise held that the investigation did not constitute a “Claim” against Insured Persons, notwithstanding cooperation of former executives in the investigation.
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Continue Reading SEC Investigation of Company Not a “Claim” or “Securities Claim”

The New York Supreme Court, Appellate Division has held that, under New York Insurance Law § 3420(a)(5), an insurer had no duty to defend or indemnify a personal injury action where the insured failed to provide notice of the claim during the policy period or extended reporting period, as required by the claims-made-and-reported policy.  Certain Underwriters at Lloyd’s London Subscribing to Policy No. PGIARK01449-05 v. Advance Transit Co., 2020 WL 6731791 (N.Y. App. Div. Nov. 17, 2020).
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Continue Reading New York Insurance Law Does Not Preclude Enforcement of Claims-Made-and-Reported Policy’s Notice Requirements

Applying New York law, the United States District Court for the Southern District of New York has held that a joint venture between the insured and a capital-contributing partner constituted a “subsidiary” of the insured pursuant to the terms of its D&O policy. Scottsdale Ins. Co. v. McGrath, 2020 WL 7321503 (S.D.N.Y. Dec. 11, 2020).…
Continue Reading Joint Venture Qualifies as a ‘Subsidiary’ Where Insured Holds Partial Economic Interest But 100% of Voting Rights

The United States District Court for the Southern District of New York, applying New York law, has concluded that, even though a grievance letter to an insured constituted a “Professional Claim” that was not timely reported, the insurer waived its late notice coverage defense by waiting seven months to deny coverage. Hunt Constr. Group, Inc. v. Berkley Assurance Co., 2020 WL 7046842 (S.D.N.Y. Nov. 30, 2020).…
Continue Reading Insured Failed to Timely Report Grievance Letter as ‘Professional Claim,’ But Insurer’s Late Notice Denial Waived By Seven-Month Delay

Applying New York law, a New York state trial court granted an insurer’s motion for summary judgment where an insured sought coverage under a private company D&O policy for a settlement it had paid for fraudulent filings for state construction projects that were made after the policy’s run-off date.  WDF Inc. v. Zurich Am. Ins. Co., 2020 WL 5801072 (N.Y. Sup. Ct., N.Y. Cnty. Sept. 29, 2020).
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Continue Reading Run-Off Endorsement Bars Coverage for “False Filings” Made in Connection with Construction Projects for State Agencies

The U.S. District Court for the Southern District of New York, applying New York law, has concluded that an insurer waived the right to assert a policy exclusion as a coverage defense in a declaratory judgment action after incorrectly denying coverage based on a similar, but broader, exclusion contained in an inapplicable policy.  City of New York v. Philadelphia Indem. Ins. Co., 2020 WL 5441347 (S.D.N.Y. Sept. 10, 2020).
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Continue Reading Insurer Waived Right to Assert Policy Exclusion First Raised in Answer to Declaratory Judgment Complaint

The New York Supreme Court, Appellate Division, applying New York law, has held that an Insured v. Insured exclusion (IvI Exclusion) in a D&O policy did not bar coverage for an action brought by a creditor trust against former directors and officers (D&Os) of a bankrupt company, because the suit fell within the scope of an exception for claims brought by certain bankruptcy-related entities. Westchester Fire Ins. Co. v. Schorsch, 2020 WL 4905056 (N.Y. App. Div. Aug. 20, 2020).
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Continue Reading Insured v. Insured Exclusion Held Not to Bar Action Brought by Creditor Trust

In a case in which Wiley represented the insurer, the United States District Court for the Eastern District of Virginia, applying New York law, has held that three prior knowledge exclusions barred coverage under an architects and engineers professional liability policy as a matter of law where, before the policy period incepted, the insured (1) knew that a pressure vessel in a boiler system which it had serviced had exploded, causing property damage and bodily injury; (2) received three pre-suit letters from potential claimants; and (3) issued two internal litigation holds.  ChemTreat, Inc. v. Certain Underwriters at Lloyd’s of London, No. 19-cv-63 (E.D. Va. Sept. 21, 2020).
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Continue Reading Prior Knowledge Exclusions Apply Where Insured Received Three Letters from Potential Claimants and Issued Two Litigation Holds Before Policy Incepted

The U.S. District Court for the Southern District of New York, applying New York law, has held that no coverage is available for related claims reported to the insurer after the end of the policy period in which the first claim was made.  Berkley Assurance Co. v. Hunt Constr. Group, Inc., 2020 WL 3000399 (S.D.N.Y. June 4, 2020).
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Continue Reading No Coverage for Related Claims Reported After Policy Period During Which Claim Was First Made