Insurance Coverage

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Frank Hülsberg
Burkhard Fassbach

In the following guest post, Burkhard Fassbach and Frank Hülsberg take a look at alternative litigation risk insurance products. These products allow insurance buyers to manage risks arising from known litigation. Frank is a Chartered Accountant and Tax Advisor in Dusseldorf, Partner and Member of the Executive Board at ADKL AG Wirtschaftsprüfungsgesellschaft in Germany and Burkhard is a D&O lawyer in private practice in Germany. I would like to thank Burkhard and Frank for allowing me to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Burkhard and Frank’s article.Continue Reading Guest Post: Eye on Litigation Risk Insurance

Policyholders and their representatives have long pushed to have the definition of “claim” in professional and management liability insurance policies expanded, to bring an increasingly larger kinds of circumstances within the policies’ coverage. However, there are consequences when more kinds of circumstances constitute a “claim,” such as, for example, with respect to the claims-made date and notice obligations. A recent insurance coverage ruling by a New York state court interpreting a lawyers’ professional liability insurance policy underscores how an expanded definition of the term “claim” — in this case, pertaining to a request to toll the statute – can affect the availability of coverage. The court, applying New York law, determined that a tolling request prior to the policy period met the applicable policy’s definition of claim, and therefore, because the claim was first made before the policy incepted, the subsequent claim during the policy period was not covered.Continue Reading Tolling Agreement Prior to the Policy Period Precludes Coverage for Later Claim

In a June 29, 2023, decision in Students for Fair Admissions v. Harvard, the U.S. Supreme Court held that the college’s use of affirmative action in its admissions program was unconstitutional. The discrimination case against the college not only went all the way to the Supreme Court but was also the subject of a long-running insurance coverage dispute involving the college’s excess employment practices insurance. In an August 9, 2023, ruling, the First Circuit held in the insurance coverage dispute that the college’s late provision of notice of claim regarding the underlying discrimination lawsuit precluded excess coverage for the claim. This high-profile insurance coverage ruling has some important lessons about the provision of notice to insurers in connection with liability claims. A copy of the appellate court’s August 9, 2023, ruling can be found here.Continue Reading Late Notice Precludes Excess Coverage for High-Profile Harvard Suit

In a recent short opinion, the Ninth Circuit held that the California statute precluding insurance coverage for loss caused by a willful act bars coverage for the underlying malicious prosecution claim even though the claim settled and there was no adjudication that the alleged willful act took place. For reasons set out below, I believe the court’s interpretation of the statute –-even though apparently well-grounded in established authority — goes beyond the statute’s purpose and plain language and produces a result that undermines the very purposes of the insurance policy. The Ninth Circuit’s March 15, 2023, opinion can be found here. A March 22, 2023 post on the Wiley Law Firm’s Executive Summary Blog about the decision can be found here. Continue Reading Adjudication Not Required for California’s Statutory Willful Act Coverage Preclusion

Regular readers know that a recurring topic I have explored on this site is the scope of the contractual liability exclusion found in many professional liability and management liability insurance policies. In prior posts I have argued that insurers sometimes apply the exclusion over-broadly so as to exclude matters that I believe should otherwise be covered under the policy. However, in a recent appellate ruling, in which the Ontario Court of Appeal concluded that as a result of the application of the contractual liability exclusion, a solar panel engineering company’s E&O insurer did not have a duty to defend the company in an underlying arbitration proceeding. As discussed below, I believe the appellate court’s reasoning is sound and that the case represents an example not only of when the exclusion may be applied appropriately but also of the appropriate limits of the exclusion’s reach. A copy of the Ontario court’s September 10. 2021 opinion can be found here.
Continue Reading Thinking About the Contractual Liability Exclusion

A recurring issue in recent years has been the question of whether there is coverage under D&O insurance for a shareholder appraisal action. Based on differences in policy wording, the analysis of the issue has turned on a variety of different questions. In a July 2021 ruling (discussed here), a Delaware Superior Court Judge had held that there was no coverage under the D&O insurance policy at issue because the underlying appraisal action was not an action “for” a Wrongful Act, as was required under the policy in order for there to be coverage. Now in a brief opinion the Delaware Supreme Court has affirmed the lower court’s decision, leaving in place the ruling that the policy at issue does not provide coverage for the underlying appraisal action. The Delaware Supreme Court’s March 3, 2022 opinion in the Jarden case can be found here.
Continue Reading Del. Supreme Court Affirms Coverage Denial for Appraisal Action

A standard feature of virtually every commercial contract is a choice-of-law clause. The general perception is that these types of clauses help facilitate settlement and reduce litigation costs. There is, however, one type of contract the usually omits choice-of law-clauses – insurance policies. Throughout the insurance industry and across most lines of coverage, insurance policies lack choice of law clauses. The reasons why insurance policies omit provisions that are standard for virtually every other type of commercial contract is the subject of an interesting new paper from University of North Carolina Law Professor John F. Coyle, entitled “The Mystery of the Missing Choice-of-Law Clause.” Coyle’s paper raises a number of interesting questions, some of which may be relevant as some insurers consider the question of whether they many need to add choice of law clauses to their policies. A copy of Professor Coyle’s December 2, 2021 paper can be found here.
Continue Reading Why Don’t Insurance Policies Have Choice-of-Law Clauses?

Peter Selvin

In an October 19, 2021 decision in Twin City Fire Insurance Co. v. Vonachen Services, Inc., the Northern District of Illinois, applying Illinois law, addressed key insurance coverage issues under the D&O and EPL coverage parts of a management liability insurance policy. In the following guest post, Peter Selvin reviews and analyzes the decision. Selvin is a partner with Los Angeles-based Ervin Cohen & Jessup. A version of this article previously was published in the LA Daily Journal. I would like to thank Peter for allowing me to publish his article on my site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Peter’s article.
Continue Reading Guest Post: Court Addresses Biometric Claims and Insurance Issues

Peter Selvin

In the following guest post, Peter Selvin discussed the Fifth Circuit’s July 21, 2021 decision in Landry’s Incorporated v. The Insurance Company of the State of Pennsylvania (here), which considered the question of coverage under a commercial general liability policy of damages from a data breach caused by a third-party hacker. Selvin is a partner with Los Angeles-based Ervin Cohen & Jessup. A version of this article previously was published in the LA Daily Journal. I would like to thank Peter for allowing me to publish his article on my site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Peter’s article.
Continue Reading Guest Post: CGL Coverage for Data Breaches: New Developments

A recurring D&O insurance coverage issue is the availability under a D&O insurance policy of coverage for a Delaware appraisal action. As discussed here, in October 2020, the Delaware Supreme Court held in the Solera action that an appraisal action was not a “Securities Claim” within the meaning of the policy at issue and therefore was not a covered claim under the policy. As discussed below, a Delaware Superior Court judge has more recently held in an insurance coverage dispute that because an appraisal action is not “for” a “Wrongful Act,” there was no coverage under the policy at issue. A copy of the Delaware Superior Court’s July 30, 2021 decision in the case can be found here.
Continue Reading Appraisal Action is Not a Claim “for” a Wrongful Act