One issue courts often confront is the question of what they may properly consider in determining whether or not an insurer has a duty to defend an insured in a given set of circumstances. In many jurisdictions, the courts may consider only the underlying complaint and the terms and conditions of the policy, and nothing else. In a recent decision, an Illinois intermediate appellate court, applying Illinois law, held that the trial court properly considered extrinsic matter – in this case, the insured’s description of events in his notice of claim to the insurer—in holding that the policy’s Cyber Events exclusion precluded coverage, even though the underlying complaint did not refer to the cybersecurity incident. The court’s decision raises some interesting questions, as discussed below.Continue Reading May a Court Consider Extrinsic Matter in Determining an Insurer’s Duty to Defend?
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 industry definition to interpret the meaning of a specific policy term. The court’s opinion makes for interesting reading and provides food for thought about the policy placement process generally and about the process of policy interpretation. District of Utah Judge 
One of the recurring coverage issues that arises in connection with Errors and Omissions (E&O) Insurance is the question of whether or not the activities that are the basis of the underlying claim involve Insured Services (or Professional Services) as that term is defined in the policy. In a September 27, 2013 decision (