The United States District Court for the District of South Carolina, applying South Carolina law, has denied a professional liability insurer’s motion to dismiss, holding that the insured’s alleged conduct could fall within the policy’s definition of “Wrongful Act,” thus giving rise to a duty to defend.  Harriman v. Associated Indus. Ins. Co., 2019 WL 1670801 (D.S.C. Apr. 17, 2019).

Continue Reading Duty to Defend Triggered Given “Possibility” of Wrongful Act

A Florida federal district court, applying South Carolina law, has held that a claim arising out of a data breach alleging that an insured failed to safeguard personal information did not trigger personal and advertising injury coverage under a commercial general liability policy.  Innovak Int’l, Inc. v. The Hanover Ins. Co., No. 8:16-cv-2453-MSS-JSS (M.D. Fla. Nov. 17, 2017).

Continue Reading No Coverage for “Data Breach” Claim under CGL Policy

A federal court in South Carolina has held that an insurer breached its contract with its insured by not paying the full policy limits even though its policy included an “other insurance” clause and there was another insurance policy that potentially covered the same loss.  Michelin North America, Inc. v. Federal Ins. Co., No 6:17-1599 (Nov. 7, 2017).  In so holding, the court noted that the dispute between the two insurers (only one of which was a party to the case), as to the appropriate proration of the insured’s loss has “no impact” on the insured’s right to fully recover under the one insurer’s policy.

Continue Reading Insurer Obligated to Pay Full Policy Limits on Loss Despite Potentially Concurrent Policies With Competing “Other Insurance” Clauses

The United States District Court for the District of South Carolina has held that an insurance policy’s alternative dispute resolution condition precedent prior to initiating litigation was not satisfied where the parties communicated with the mediator during the provision’s cooling-off period, even though the parties disputed whether the communications concerned insurance coverage.  Allied World Surplus Lines Ins. Co. v. Blue Cross & Blue Shield of N.C., 2017 WL 3671172 (D.S.C. Aug. 24, 2017).

Continue Reading Alternative Dispute Resolution Provision Not Satisfied Where Parties Communicated with Mediator During Cooling Off Period

The United States District Court for the District of South Carolina, applying South Carolina law, has held that multiple clients’ claims against an accountant and his former firm constitute a single claim under a professional liability policy because they are logically connected to the accountant’s loss of faculty from Parkinson’s disease.  CAMICO Mutual Insurance Co. v. Jackson CPA Firm, No. 15-cv-1823, 2016 WL 7403959 (D.S.C. Dec. 22, 2016).  The Court also applied a known claims endorsement to limit the total recovery available to the clients because the firm “might reasonably have expected” a potential claim before the policy’s effective date.

Continue Reading Multiple Clients’ Claims Against Accountant Deemed Related and Subject to Lower Limit of Liability Due to Insureds’ Prior Knowledge of One Client’s Claim

The United States Court of Appeals for the Fourth Circuit, applying South Carolina law, has affirmed a trial court’s determination that a professional liability insurance policy afforded coverage to innocent co-insureds despite fraudulent misrepresentations in the application submitted by an individual applicant posing as a doctor. Evanston Ins. Co. v. Agape Senior Primary Care, Inc., 2016 WL 192748 (4th Cir. Jan. 15, 2016). The court found that the insurer could have limited coverage in the face of fraud in drafting the policy, the co-insureds had no knowledge of the fraud, and public policy would not be served by rescission.
Continue Reading Fourth Circuit Holds that Rescission is Not Available to Innocent Co-Insureds