professional liability insurance

Policy exclusions with the broad “based upon or arising out of” sometimes may be applied very broadly to sweep beyond the claims that the exclusion aimed to exclude. In a recent coverage dispute, a professional liability insurer sought to apply an exclusion with the broad preamble language and precluding coverage for ERISA and securities law claims in order to preclude coverage even the common law and bankruptcy law claims alleged against the insured. In a February 7, 2020 opinion (here), Eastern District of Michigan Judge Laurie J. Michelson, applying Michigan law, concluded that the exclusion’s preclusive effect did not apply to the common law claims, because the insurer failed to establish the exclusion’s required causal connection between the alleged statutory violations, on the one hand,  and the common law and bankruptcy law claims, on the other hand.  Judge Michelson’s opinion provides an interesting perspective on exclusions with the broad “based upon and arising out of” preamble language.
Continue Reading Broad Form Statutory Claims Exclusion Does Not Preclude Coverage for Common Law 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

The D&O Diary’s overseas assignment continued this week with a stop in Mumbai, India’s financial capital. I was in Mumbai to participate in the annual Bima Gyaan Symposium, an educational and networking event for the professional liability insurance industry in India. As reflected in the pictures below, the event was once again well-attended and was a great success.
Continue Reading Mumbai Professional Liability Insurance Symposium

wisconsinAs I have noted in prior posts (most recently here), a recurring D&O insurance coverage issue is the question of whether or not an insured person was acting in an insured capacity at the time he or she allegedly committed the wrongful acts alleged against him or her. These questions arise because individuals often act in numerous capacities, but the D&O policy provides coverage only for those acts undertaken as a director or officer of the insured company.

A recent case involved similar questions arising under a professional liability insurance policy that provided coverage for the insured individual’s acts in his capacity as the trustee of two trusts. The individual sought coverage under the policy for claims brought against him in his capacity as a director or officer of separate companies in which the trusts held controlling ownership interests. In a June 30, 2016 opinion (here), the Wisconsin Supreme Court, applying Wisconsin law,  affirmed the intermediate appellate court’s holding that under the policy’s business enterprise exclusion, which precluded coverage for claims arising from the individual’s actions for entities other than the specified trusts, there was no coverage under the policy and the insurer had not breached its duty to defend.
Continue Reading Trustee’s Professional Liability Insurance: No Coverage for Claims Against Trustee Acting as Director of Separate Corporation

indianaOn April 22, 2015, in a sweeping win for health insurer Anthem Inc., the Indiana Supreme Court held that excess reinsurers on the company’s self-insured E&O insurance program must pay the company’s costs of defending and settling allegations that it had improperly failed to pay, underpaid, or delayed paying medical reimbursement claims. The Court rejected

minnOn December 16, 2014, in an interesting ruling that undoubtedly will stir up a great deal of debate, District of Minnesota Judge Paul Magnuson, applying Delaware law, granted U.S. Bancorp’s motion for summary judgment, holding that the bank’s professional liability insurers must pay $30 million of the $55 million the bank agreed to pay