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 order to try to resolve litigation pending against them, policyholders sometimes enter a settlement in which they agree to the entry of a consent judgment against them and to the assignment to the claimants of their rights under their insurance policy, subject to the claimants’ agreement not to execute the judgment against them. The question that often arises is whether, in light of the covenant not to execute, the policyholders have suffered a “Loss” as required to trigger policy coverage.
An employer’s management liability insurance policy does not provide coverage for employees’ claims that – contrary to statutory requirements — the employer collected and failed to remit gratuities, because amounts owing due to a preexisting statutory duty do not represent covered loss, according to a recent decision of a Massachusetts federal court applying Massachusetts law.