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
Defense Costs Paid Under Reservation of Rights Do Not Erode Fiduciary Liability Policy’s Limit of Liability?
As part of our beat here at the The D&O Diary, we read a lot of judicial opinions. We are quite accustomed to the fact that the case outcomes can be and often are all over the map. Just the same, every now and then we read a decision that really makes us scratch our heads. That was our reaction when we read Southern District of Mississippi Chief Judge Louis Guirola, Jr.’s October 2, 2015 opinion in the Singing River Health Systems case (here), in which Judge Guirola, applying Mississippi law, held that when a fiduciary liability insurer defends its insured under a reservation of rights, the defense expense payments do not erode the policy’s limits of liability. A number of questions and concerns may fairly be raised about this decision, as discussed below. The Traub Lieberman Insurance Law Blog has an October 5, 2015 post about Judge Guirola’s decision, here.
Continue Reading Defense Costs Paid Under Reservation of Rights Do Not Erode Fiduciary Liability Policy’s Limit of Liability?
Montana Supreme Court: Not Necessary to Consider Underlying Allegations or Policy Terms to Determine Insurer’s Defense Duty
As part of our beat here at The D&O Diary, we read a lot of judicial opinions. We like nothing better than to read an appellate opinion where a dissenting justice and the majority really mix thing up. For that reason alone, we read the recent insurance coverage decision out of the Montana Supreme
NY Court of Appeals Reverses Itself, Holds Insurer’s Breach of Duty to Defend Doesn’t Waive Coverage Defenses After All
In an unusual development in a closely watched case, K2 Investment Group, LLC v. American Guarantee & Liability Ins. Co., the New York Court of Appeals has reversed its own June 2013 ruling in the case in which it held that a legal malpractice insurer that breached its duty to defend is barred from
Professional Liability Insurance: Criminal Plea Precludes Insurer’s Duty to Defend
An insured’s guilty plea to criminal charges relieved his professional liability insurer of its duty under the policy to defend him against related civil claims, according to a June 18, 2013 Order by Southern District of Florida Judge Daniel Hurley. Judge Hurley’s decision is interesting because it addresses the question whether the court can consider
Insurer Breaching Duty to Defend Cannot Rely on Policy Exclusions to Disclaim Duty to Indemnify
An insurer that breached its duty to defend may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against him, according to a June 11, 2013 decision from the New York Court of Appeals. The Court of Appeals opinion can be found here.
A legal
Guest Post: More About the Duty to Advance and the Duty to Defend
In an August 27, 2012 post (here), I discussed Central District of California Judge James Selna’s August 21, 2012 decision in Petersen v. Columbia Casualty, and in particular Judge Selna’s consideration of the insurer defendant’s duty to advance under its liability policy. Following my publication of the post, I was contacted by Jeffrey
The Duty to Advance Defense Expenses vs. The Duty to Defend
There is a host of well established legal principles that govern insurers’ defense obligation under the standard liability insurance policy where the insurer has the duty to defend the insureds. But many professional liability insurance policies are not written on with the duty on the insurer to defend (which is usually described as a “duty