October 2020

• California Court Enforces Federal Forum Selection Provision For 1933 Act Claims
• Prior Knowledge Exclusions Apply Where Insured Received Three Letters from Potential Claimants and Issued Two Litigation Holds Before Policy Incepted
• Ninth Circuit: Excess Carrier Not Entitled to Challenge Payment Decisions of Underlying Carriers
• Insured v. Insured Exclusion Held Not to Bar Action Brought by Creditor Trust
• Illinois Court Holds Fee Dispute Does Not Involve Professional Services
• Insurer that Breached Duty to Defend Bears Burden on Allocation of Defense Costs
• D&O Claim Deemed Related to Prior Suit Brought by Different Parties
• Insurer Waived Right to Assert Policy Exclusion First Raised in Answer to Declaratory Judgment Complaint
• Texas Court Holds Late Notice Bars Coverage
• No Coverage for TPA in Claim Arising from Extracontractual Exposure to Insurer
• Sanctions Carve-Out Bars Coverage for Show Cause Order Issued to Attorney
• EPL Insurer Must Defend Lawsuit Derived in Part from EEOC Claim and Retaliation Lawsuit Filed Prior to Policy Period

September 2020

• 11th Circuit Holds Insurer Must Defend Lawsuit Where Award of Attorneys’ Fees Was the Only Potentially Covered Relief
• Insurer that Breached Duty to Defend Bears Burden on Allocation of Defense Costs
• Texas Court Holds “Instrumental Act” in Appraisal Litigation is Execution of Merger
• No Coverage for Conduct Performed By Attorney In Uninsured Capacity
• Private Funds: SEC Examination and Enforcement Priorities
• Government Subpoena Issued to Insured Company Not a “Claim” Against Individual Insured
• Connecticut Federal Court Declines to Dismiss First-Filed Declaratory Judgment Action in Deference to Insured’s California State Court Action
• Fact Issues Preclude Summary Judgment on Prior Knowledge Exclusion
• No Coverage under Lawyer’s Professional Liability Policy for Client’s Lost Settlement Funds
• Indemnification Demands Made by Stock Option Plan Trustee Not “Fiduciary Claims” for “Wrongful Acts”
• Question of Fact When “Claim” “First Made” Where Insured Allegedly Did Not Become Aware of Claim Until After Policy Period

August 2020

• “Written Demand” Made Within a “Civil Proceeding” is Not a New Claim
• Suits Alleging Anticompetitive Conduct by NCAA Deemed Related
• Pre-Policy Period Letters to Disqualified Counsel from Claimant’s New Attorney are Not a Claim or A Prior Incident that Could be the Basis for a Claim
• Benefits the Insured Promised But Failed to Provide Constitute Non-Covered Restitution
• ERISA Exclusion in E&O Policies Bars Coverage for Suit Filed by the Department of Labor
• Contract Exclusion Bars Coverage for Class Action
• No Coverage for Lawsuit Alleging Human Trafficking and Wage and Hour Violations
• No Coverage for Affirmative Lawsuit Challenging Distribution of Proceeds From Sale of Investment Assets
• Insurer Required to Defend Until “Satisfaction” of Covered Verdict

July 2020

• Liu v. SEC: What Is “Disgorgement”?
• EPL Exclusions in D&O Policy Barred Coverage for Wage-and-Hour Class Action
• Fourth Circuit: FCA Suit Alleging False Medicaid Reimbursement Claims “Arises out of a Medical Incident” under North Carolina Law
• Ninth Circuit Holds That Alleged Misappropriation of Client Funds Triggers E&O Coverage, But No Bad Faith Where Insurer’s Denial Was Reasonable
• Illinois Court of Appeals Rules Insurer Did Not Act in Bad Faith in Denying Coverage Where Claim Was Made Before Policy Period
• No Coverage for Related Claims Reported After Policy Period During Which Claim Was First Made
• No Coverage for Claim Deemed First Made Prior to Inception of Policy Period
• D&O Policy’s “Third-Party Services” Exclusion Bars Coverage for Claim Brought by Insured’s Client
• Negligent Failure to Supervise Claim Barred by Misappropriation of Trade Secrets Exclusion
• Insurer Did Not Act in Bad Faith by Denying Coverage for Claim that Turned On Unsettled Question of Law

June 2020

• Class Actions Comprising Different Class Periods Causally and Logically Related
• Alleged Errors In Employee Benefits Administration Potentially Trigger Fiduciary Liability Policy
• No Computer Fraud Coverage for Ransomware Attack
• Wire Fraud and Money Laundering Can Be “Professional Services” Triggering Criminal Acts Exclusion
• Alleged Violations of Fair Labor Standards Act and New York Labor Law Not “Wrongful Acts” Under Employment Practices Liability Policy
• E&O Coverage for Embezzlement Precluded by Commingling Exclusion
• Breach of Contract Claim Not Barred By Fraud Exclusion

May 2020

• First Circuit Holds “Breakaway” Church Not an “Insured” Under Original Church’s D&O Policy
• Arrest and Filing of Charges Triggers Wrongful Conviction Defense Coverage
• Incarceration Constitutes Continuous Injury Triggering Duty to Defend
• Negligent Services Exclusion Bars Coverage for Lawyer’s Actions as Trustee
• “Known Loss” Provision Bars Coverage for Lawsuit Threatened in Pre-Policy Period Cease and Desist Letter
• No Duty to Defend or Indemnify Lawsuit Overlapping With Prior EEOC Charge
• No Coverage for Judgment Premised on Same Facts Asserted in Suit Filed Prior to Policy Period
• Untimely Notice of Server Outage and Related Client Communications Bars Coverage for Claim Filed against Technology Service Provider
• Claims Arising Out of Alleged Sexual Abuse by Doctor are “Related Claims” Subject to Single Limit of Liability Under Sexual Misconduct Endorsement
• Suit Against “Doe” Defendant is Not a “Claim”
• Issues of Fact Halt Insurer’s Attempt to Rescind Malpractice Policy
• Criminal Act Exclusion Bars EPL Coverage for Sexual Harassment, Discrimination, and Assault Suits
• Undue Influence Suit Alleges “Negligent Act, Error or Omission” Under E&O Policy
• Insurer Required to Defend and Provide Independent Counsel for Potentially Covered Claims

April 2020

• SEC Enforcement Action Deemed a Single Claim With Prior SEC Investigation and Shareholder Suits
• Insights on Insurance Delaware Supreme Court Reverses Chancery Court; Concludes Federal Forum Selection Provisions Enforceable For 1933 Act Claims
• SEC Investigation Is a Claim First Made When Formal Order of Investigation Issues
• Ninth Circuit Holds Demand Letter and Suit Alleging Same Wrongful Acts Are Not Necessarily a Single Claim Where Policy Lacks Related Claims Provision
• No Coverage for Underlying Settlement with Government Because Government Was Not Insured’s “Client”
• Absent Prejudice, Breach of Notice Conditions Does Not Relieve Insurer of Coverage Obligations
• Contract Exclusion Bars Coverage for Lawsuit Over Stock Repurchase Agreement
• Vague Allegations Did Not Trigger Prior Knowledge Condition at Duty-to-Defend Stage
• Lack of Knowledge Requirement Nixes Coverage for Social Engineering Fraud Under Computer Transfer or Funds Transfer Fraud Limits
• Insurer Must Defend Legal Malpractice Claim for Damages in the Amount of Fees Paid, Despite Carve Out of “Legal Fees” from Definition of “Damages”
• Declaratory Judgment Complaint Constitutes a Reportable Claim for a Wrongful Act; Subsequent Amended Complaint Adding Insured Defendants Not a Separate Claim
• Insurer’s Failure to Obtain Allocation in Arbitration Award Results in Coverage for Full Award
• Insurer Has No Duty to Defend Insured in “Defensive” Arbitration Proceeding
• Breach of Contract Exclusion Applies to Lost Profits Award

March 2020

• Subpoena Not a ‘Claim’ When Issued in Litigation Not Involving Insured’s Professional Services
• Massachusetts SJC: E&O Insurers May Allow Insureds to Veto Settlement, But Settlement-Related Duties to Claimants Remain
• Nebraska Supreme Court Rules Professional Services Exclusion Not Applicable to Law Enforcement
• Claims Alleging Same Conduct Against Same Insured But Based on Different Specific Facts Not Related Under D&O Policy
• Coverage for Common Law Causes of Action Not Barred Under ERISA/Securities Law Exclusion

February 2020

• No Coverage for Lawsuit Seeking Recovery of Disputed Legal Fees
• Delaware Adopts Larger Settlement Rule
• Notice Prejudice Rule Not Applicable to Claims-Made-And-Reported Policies
• Ransomware Attack Involves “Direct Physical Loss of or Damage to” Software, Data and Computer Systems
• Court Holds Insurer Cannot Allocate Settlement Between Covered and Non-Covered Claims
• Untimely Reservation of Rights Estops Insurer from Denying Coverage
• Retroactive Date Bars Coverage for Underlying Discrimination Action

January 2020

• Lawsuit Arising Out of Three Design Errors is a Single “Claim,” and Prior Knowledge and Prior Notice Provisions Bar Coverage
• Ill. Ruling Clarifies Wrongful Incarceration Insurance Triggers
• No Coverage for Claim Made During Initial Policy Period but Reported During Renewal Policy Period
• Concealment of Pending Lawsuits in Renewal Application Voids Policy
• “May” and “Might” are Sufficiently Clear and Unambiguous to Support Rescission Claim
• Obligation to Timely Report Claim Applies Even if Claim Appears to Have Been Abandoned
• Exclusion for Violation of Consumer Protection Laws Does Not Bar Coverage for Alleged Violation of Landlord-Tenant Law
• Insurer Must Advance Defense Costs as Incurred and Cannot Enforce Policy’s Defense Arrangement Consent Provision