Archives: Insurance Coverage

Subscribe to Insurance Coverage RSS Feed

7th Circ.: Contract Exclusion Renders Coverage “Illusory”

I have long believed and said that the typical professional liability and D&O liability insurance policy contractual exclusion written with the broad “based upon, arising out” preamble sweeps too broadly and precludes coverage for the very kind of claims for which policyholders buy the insurance. The Seventh Circuit has now said what I have long … Continue Reading

Late Notice of Claim Precludes Coverage

Readers know that it doesn’t take much to get me up on my hobby horse about insurers trying to deny coverage based on the late provision of notice. In general, I am against a mere procedural fault causing a complete coverage forfeiture. Every now and then though there is a case where the policyholder’s lack … Continue Reading

Cal. Sup. Ct.: Notice-Prejudice Rule Represents a Fundamental Public Policy

Under the so-called “notice-prejudice Rule” applicable in some jurisdictions, insurers can deny coverage for claims based on the policyholder’s late provision of notice of claim only in the event that the late notice materially prejudiced the insurer. In a recent decision, the California Supreme Court, ruling on questions certified to the Court from the Ninth … Continue Reading

Guest Post: No Choice of Law in Delaware Coverage Disputes?

In the following guest post, Jeremy Salzman and Kylie Tomas of Sompo International and Ommid Farashahi and Jonathan Cipriani of BatesCarey LLP discuss a recent series of Delaware court decisions in which the courts applied Delaware law in addressing insurance coverage disputes. In their article, the authors question Delaware law appropriately should have been the … Continue Reading

Guest Post: Marijuana:  Big Opportunities and Challenges for Insurers

One of the more interesting businesses to emerge in recent years has been the legal marijuana industry. Because of lingering legal issues, this industry’s emergence has been accompanied by a host of complications. These complications in turn raise a number of challenges for insurers seeking to get involving in this industry. In the following guest … Continue Reading

Coverage Complications for Prior Acts Under Claims Made Insurance Policies

Theoretically, claims made insurance coverage applies to claims made during the policy period regardless of when the underlying acts took place. The claims made arrangement contrasts with the framework under an occurrence policy, where coverage applies according to when the underlying acts took place, regardless of when the claim is made. But even though claims … Continue Reading

The Critical Issue of Private Company D&O Insurance Coverage for Competition Law Claims

One area of potential legal exposure facing corporate executives – including even executives of private companies – is the risk of liability under laws designed to protect competition, including (but definitely not limited to) state and federal antitrust laws. Claims asserting liability under these various legal provisions not only represent a significant liability exposure for … Continue Reading

E&O Coverage Barred for Options Trading Losses

In a ruling that turned on the interpretation of a technical financial term, a federal district court concluded that the Options Trading exclusion in an investment firm’s E&O policy precluded coverage for investor claims arising out of a financial transaction gone bad. In concluding that the exclusion precluded coverage, the court applied a standard financial … Continue Reading

Michigan Appellate Court Rejects Insurer’s Late Notice Defenses

Regular readers know that I frequently write about insurance coverage disputes in which insurers contend that coverage is precluded due to the policyholders’ alleged late provision of notice. All too often, the policyholders end up without coverage as a result of the late notice allegations. In an interesting (albeit confusingly written) decision, a Michigan intermediate … Continue Reading

Court Rejects Bond Insurer’s Coverage Trigger Defense and Notice Prejudice Rule Arguments

In an interesting recent decision, a court rejected two defenses a Financial Institution Bond insurer asserted in denying coverage for a bank’s losses arising from a $3.6 million loan extended in reliance on documents that proved to have been forged. District Court of Arizona Judge G. Murray Snow, applying Arizona law, rejected the bond insurer’s … Continue Reading

Guest Post: Courts Wrestle With Coverage for Cyber-Related Claims

As companies experienced cyber-related incidents, they have sought coverage for their losses under a variety of different kinds of insurance policies. As discussed in the following guest post, courts have struggled to address the coverage issues these claims present. The article’s author is Peter Selvin, a member of TroyGould PC, where he practices in the … Continue Reading

Sixth Circuit: Attempted Notice of Potential Claim Insufficient to Provide Notice of Actual Claim

Claims made policies provide coverage for claims first made during the policy period, but only if the insurer is provided with timely notice of claim. Most claims made policies allow policyholders to provide insurers with a notice of circumstances that may give rise to a claim in the future, in order to make the date … Continue Reading

Crime Policy Doesn’t Cover Employee Credit Card Overcharge Losses

A recent coverage dispute involving a Nevada club’s losses resulting from its employees’ theft from the club’s customers’ credit cards raises interesting issues with implications for coverage questions for other kinds of losses for which policyholders are seeking crime policy coverage. In the recent Nevada club credit card fraud case, District of Nevada Judge Andrew … Continue Reading

Del. Supreme Court Holds Settlement Amounts Not Uninsurable Disgorgement

A coverage defense that insurers frequently raise is the assertion that the amount for which the insurance payment is sought represents uninsurable disgorgement. Beyond the more general question of whether or not disgorgements are or are not insurable is the more specific question of whether or not the amount for which coverage sought represents disgorgement. … Continue Reading

Second Circuit: Computer Fraud Coverage Section Covers Fraudulent Email Funds Transfer

In a much anticipated decision, on July 6, 2018 the Second Circuit, applying New York law, affirmed a district court ruling that the computer fraud provisions of a commercial crime coverage section covered the losses Medidata incurred when the company’s employees transferred funds in response to a spoofed email. The appellate court’s opinion could prove … Continue Reading

Guest Post: Another Court Applies New York’s “Sufficient Factual Nexus” Test to Related Claims

As I have frequently noted on this blog (for example, here), problems involving relatedness between claims present recurring coverage issues under D&O insurance policies. In the following guest post, Maurice Pesso and Greg M. Steinberg of the White and Williams LLP law firm take a look at a recent decision out of the Northern District … Continue Reading

Insurance for Fraudulent Misconduct Does Not Violate Delaware Public Policy

The insurance coverage litigation arising from the settlement of the shareholder claims filed in connection with the Dole Food Company’s November 2013 “going private” transaction continues to grind on. In the latest development in the coverage dispute, a Delaware Superior Court judge has entered a number of interesting rulings, deciding among other things that an … Continue Reading

Failure to Maintain Insurance Exclusion Precludes Coverage for Defense Costs Incurred in a Lapsed Life Insurance Dispute

In a recent insurance coverage lawsuit arising out of an underlying dispute over who was responsible for the lapse of a key man life insurance policy, a court determined that coverage for the attorneys’ fees a management consulting firm incurred in defending against the underlying claim was precluded by the failure to maintain insurance exclusion … Continue Reading

“Other Insurance” Issue is Not the Policyholder’s Problem

When two or more insurers’ policies potentially cover a single loss, “other insurance” questions can arise. Over the years, courts have developed a number of rules of the road to apply when multiple policies potentially cover the same loss. But these principles govern the obligations and responsibilities between the insurers, and not between the insurers, … Continue Reading

Guest Post: Fee Exclusion Precludes Coverage with No Allowance for Defense Costs

In prior posts (most recently here) I have reviewed cases in which courts considered the question of insurance coverage for a bank’s obligation to repay allegedly improper overdraft fees.  The following guest post discusses a recent overdraft fee coverage case from the Seventh Circuit. BancorpSouth v. Federal Insurance Co. (the opinion can be found here). … Continue Reading

On the Meaning of “War”

Many insurance policies contain a war exclusion precluding coverage for loss caused by war. But in world where violent conflicts involve a wide variety of different groups and parties, what exactly constitutes “war”? In a recent coverage dispute presenting this issue, a federal judge concluded that the 2014 armed conflict between Israel and Hamas disrupted … Continue Reading
LexBlog