contract exclusion

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One of the perennial management liability insurance coverage issues is whether a policy’s contractual liability exclusion precludes coverage for related tort claims filed alongside claims for breach of contract. Often, these issues turn on the specific wording of the exclusion involved. A recent insurance coverage decision from the Northern District of Illinois addressed these issues in the context of an underlying lawsuit involving both a breach of contract claim and a claim for tortious interference with contract. As discussed below, the court concluded, based on the specific language involved, that the exclusion did not preclude coverage for the tortious interference claim.

The Court’s March 31, 2026, opinion can be found here. An April 9, 2026 LinkedIn post about the court’s decision by Paul Curley of the Kaufman, Borgeest & Ryan law firm can be found here.

Continue Reading Contract Exclusion Does Not Bar Coverage for Tortious Interference Claim

In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, Anne Ray, Lead Counsel of D&O and EPL Claims, Bowhead Specialty Underwriters, Inc., Elan Kandel, Member, Bailey Cavalieri LLC, and James Talbert, Associate, Bailey Cavalieri LLC, take a look at the top professional liability insurance coverage decisions from 2024. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.

Continue Reading Guest Post: Lessons from 2024: A Review of Key Insurance Coverage Decisions

As readers know, there has been a wave of business interruption coverage insurance disputes arising out the pandemic. But the business interruption claims are not the only insurance coverage disputes the coronavirus outbreak has caused. An interesting recent D&O insurance-related coverage dispute involves the denial by a D&O insurer of coverage for lawsuits a health industry technology trade association faced following the March 2020 coronavirus outbreak-related cancellation of the association’s annual trade show.

In a recent decision, a federal district court, applying Illinois law, rejected the insurer’s coverage denial, holding that the policy’s professional services exclusion and contract exclusion did not preclude coverage. The court also rejected the insurer’s contention that the damages sought in the underlying litigation represented uninsurable restitution. Northern District of Illinois Judge Robert W. Gettleman’s October 19, 2021 opinion in the case can be found here. A November 1, 2021 post on the Hunton Insurance Recovery Blog about the opinion can be found here.
Continue Reading Court Rejects D&O Insurer’s Coverage Denial for COVID-Related Tradeshow Cancellation Claims

In the following guest post, Alison Finn, Claims Counsel, DWF Claims; Elan Kandel, Member, Bailey Cavalieri; and James Talbert, Associate, Bailey Cavalieri, take a look at the most important management and professional liability coverage decisions for 2019, involving the perennial coverage issues for insurers and policyholders. I would like to thank Alison, Elan, and James for allowing me to publish their article as a guest post 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 the authors’ article.
Continue Reading Guest Post: Key 2019 Management and Professional Liability Insurance Coverage Decisions

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 been saying; the appellate court found that the contractual liability exclusion in an E&O insurance policy renders coverage under the policy “illusory” and therefore the policy must be reformed to match the policyholder’s “reasonable expectations.” I hope everyone involved in the professional liability and D&O liability insurance industry will take the time to familiarize themselves with this recent decision. I also hope this decision means the end of contractual liability exclusions using the broad “based upon, arising out of” preamble.
Continue Reading 7th Circ.: Contract Exclusion Renders Coverage “Illusory”

eleventh cuircuit sealIn an unpublished October 5, 2015 opinion (here), the Eleventh Circuit, applying Florida law, held that a D&O insurance policy’s contractual liability exclusion precluded coverage for negligence claims asserted against persons insured under the policy. The contract exclusion was written with a broad “based upon, arising out of” preamble wording. As discussed below, the decision highlights concerns about the use of the broad preamble in D&O insurance policies’ contractual liability exclusion. An October 28, 2015 post on the Wiley Rein law firm’s Executive Summary Blog about the Eleventh Circuit’s ruling can be found here.
Continue Reading D&O Insurance: Contractual Liability Exclusion Applied to Preclude Coverage for Negligence Claim

riA recurring D&O insurance question is whether or not a policy’s contract exclusion precludes coverage for claims that the insured induced the claimant into entering a contract through negligent or intentional misrepresentations. In a interesting December 22, 2014 opinion (here), District of Rhode Island Judge John J. McConnell, Jr., applying Rhode Island …

floridaIn an October 20, 2014 opinion (here), Middle District of Florida Judge Roy B. Dalton, Jr., applying Florida law, entered summary judgment for a D&O insurer, holding that the insurer was not liable for the stipulated judgment its insured had entered because the policy’s broad contractual liability exclusion precluded coverage for the underlying …

idaho2In a March 20, 2014 decision involving interpretation of the interrelated wrongful acts provision and of the contractual liability exclusion in a bank professional liability insurance policy, District of Idaho Magistrate Judge Ronald E. Bush entered summary judgment on behalf of the policyholder, ruling that the underlying dispute was covered under the policy’s lender liability …