The Second Circuit recently affirmed a decision by a New York district court that the contract exclusion in a D&O insurance policy applied to all of the causes of action in an underlying action, including a cause of action for declaratory relief stemming from a shareholder agreement. See Paraco Gas Corp. v. Ironshore Indem., Inc.,
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Insurer Quota-Sharing Lessons From $112M Bad Faith Verdict
Note: This article was originally published by Law360 as an Expert Analysis column.
Following the rising trend in runaway bad faith verdicts, on March 22, 2024, the U.S. District Court for the Northern District of Indiana upheld a whopping $112 million jury verdict, including $12.5 million in punitive damages against each of the seven…
Sixth Circuit Holds Under Michigan Law That Insurer May Recoup Defense Costs Paid Subject to a Reservation of Rights Without Express Policy Language Authorizing Reimbursement
By Jeffrey Ward
The Sixth Circuit has held under Michigan law that a reservation of rights letter including a right to reimbursement was sufficient to entitle an insurer to recoup defense costs paid when the insurer had no duty to defend even though the subject policy did not include language expressly providing for such right. See Great American…
First Circuit Strictly Enforces Claims Made and Reported Policy Terms and Finds Actual Notice of Claim Insufficient to Excuse Failure to Comply With Notice Requirements
By Jeffrey Ward
The First Circuit has held, under Massachusetts law, that an insurer’s actual knowledge of a claim does not excuse the insured from reporting the claim to the insurer as required by the policy. President and Fellows of Harvard College v. Zurich Am. Ins. Co., 77 F.4th 33 (1st Cir. 2023). In so holding, the court followed a…
Supreme Court Of Kentucky Permits Third-Party Bad Faith Claim To Proceed Against Insurer Before Final Adjudication Of Coverage
Note: This article was originally published by Law360 as an Expert Analysis column.
Like most jurisdictions, Kentucky follows the general rule that an insurance bad faith claim cannot be maintained against an insurance company when the underlying claim is not covered by the policy. See Davidson v. Am. Freightways, Inc., 25 S.W.3d 94, 100 (Ky.…
Eleventh Circuit Holds That Georgia Law Does Not Require Reimbursement of Defense Costs Paid Subject to a Reservation of Rights Absent Policy Language Requiring Reimbursement
By Jeffrey Ward
The Eleventh Circuit has held, in a matter of first impression under Georgia law, that a reservation of rights letter including a right to reimbursement did not entitle insurers to reimbursement of defense costs absent policy language expressly providing for such right. See Continental Casualty Co. v. Winder Laboratories, LLC, __ F.4th __, 2023 U.S.…
Fourth Circuit Holds That Reverse Triangular Merger Was Acquisition of Insured Entity for Purpose of Subject D&O Policy’s Bump Up Provision
By Jeffrey Ward
The Fourth Circuit has held in a published decision that a 2015 reverse triangular merger between Willis Group Holdings plc (“Willis”) and Towers Watson & Co (“Towers Watson”) was “the acquisition of all or substantially all the ownership interest in or assets” of Towers Watson within the terms of the Bump Up Provision in the…
Fourth Circuit Holds Government Investigation Costs Are Not Covered Under Lawyers Professional Liability Policy Because Search Warrant and Target Conflict Letters Are Not Claims Against An Insured
By Jeffrey Ward
The Fourth Circuit has held that an insurer correctly denied coverage for costs that the insured law firm and one of its attorneys incurred when the government investigated the attorney because neither a search warrant executed at the firm’s office nor letters the government sent to the attorney were “Claims,” as that term is defined…
Southern District of New York Holds Employment Practices Wrongful Act Exception to an Insured Versus Insured Exclusion Applied To Former CEO’s Claims, but That an Allocation Was Required
The Southern District of New York recently addressed a “Wrongful Employment Practices Act” exception to an Insured versus Insured (“IVI”) exclusion in In re Seabury FxOne LLC v. U.S. Specialty Ins., No. 21-cv-837, 2023 U.S. Dist. LEXIS 31255 (S.D.N.Y. Feb. 24, 2023). In 2015, the CEO of Seabury FxOne LLC (“Seabury”) issued a demand letter…
Somebody’s Watching Me: A Recent Smart-TV Lawsuit Seeks Insurance Coverage for Privacy Litigation
By Dykema
After the Fourth Circuit held that a commercial general liability (“CGL”) policy could cover a data incident in 2016, confusion arose as to whether CGL policies would continue to cover data breaches. A recent California lawsuit by the smart-TV maker Vizio against two of its insurance companies shows that this confusion also arises when an…