The United States District Court for the District of North Dakota has held that an insurer had no duty to defend a claim under a lawyers professional liability policy where the insured had prior knowledge that a claim might be made and should have given notice of the potential claim prior to the policy’s effective date. ALPS Prop. & Cas. Ins. Co. v. Brehdal & Assoc., P.C., 2020 WL 6268043 (D.N.D. Oct 23, 2020). The court also held that the insurer was entitled to reimbursement of defense costs where the policy provided such a right, and the insurer reserved its rights to seek such reimbursement.

Continue Reading Prior Knowledge and Prior Notice Exclusions Barred Coverage For Legal Malpractice Claim

The United States District Court for the District of North Dakota, applying North Dakota law, has held that a commingling exclusion precluded coverage for an insured’s controller’s theft of funds under the property management company’s errors and omissions policy.  Campbell Prop. Mgmt., LLC v. Lloyd’s Syndicate 3624, 2020 WL 1846985 (D.N.D. Apr. 10, 2020).

Continue Reading E&O Coverage for Embezzlement Precluded by Commingling Exclusion

Applying North Dakota law, the United States Court of Appeals for the Eighth Circuit has held that an insurance policy issued to a parent company and several of its commonly owned affiliates did not provide coverage for a lawsuit against the owner of the companies and one of the insured subsidiaries for breach of a noncompetition covenant in an asset purchase agreement.  Mau v. Twin City Fire Ins. Co., — F.3d –, 2018 WL 6379281 (8th Cir. Dec. 6, 2018).

Continue Reading Eighth Circuit Affirms No Coverage for Lawsuit for Breach of Noncompetition Covenant

Applying North Dakota law, a federal district court has held that a contract exclusion contained in a directors and officers liability policy precludes coverage for claims arising from a non-compete clause in an asset purchase agreement.  Mau v. Twin City Fire Ins. Co., 2017 WL 4479731 (D.N.D. Oct. 3, 2017).  The court also held that the insurer had no duty to defend an officer against claims arising from the alleged violation of the non-compete agreement because the officer did not commit the acts underlying the violation in his capacity as officer of a defined subsidiary of the insured entity.

Continue Reading Contract Exclusion Bars Coverage for Claims Arising from Asset Purchase Agreement’s Non-Compete Clause