Directors and officers (D&O) and errors and omissions (E&O) policies often contain “capacity” limitations, which restrict coverage to claims against the insured alleging acts undertaken by the insured in his or her insured capacity. These insured capacity limitations can take on different forms. For example, the policy may limit the definition of an “insured person” to someone acting in his or her capacity as an officer or director of the insured company. Or the ... Keep Reading »
Second Circuit Gives Lesson in Interplay Between Construction Contracts and CGL/Umbrella Policies
On construction projects, it is common for the owners, general contractors, and subcontractors to execute various contracts requiring the parties to procure insurance and have other parties designated as additional insureds under those policies. Recently, the Second Circuit Court of Appeals in Amerisure Insurance Co. v. Selective Insurance Group Inc. addressed the interplay between construction contracts and commercial general liability and umbrella policies. The case ... Keep Reading »
NY Federal Court Finds “Insured v. Insured” Exclusion in D&O Policy Trumps General Allocation Clause
On December 9, 2022, the U.S. District Court for the Southern District of New York considered whether an “insured v. insured” (IvI) exclusion applied to bar coverage for an underlying lawsuit brought against insureds under a directors & officers (D&O) liability policy by another insured under the same policy, and another noninsured party. Thomas L. Gregory v. Navigators Insurance Company, Case No. 1:22-cv-04834. Thomas Gregory was an employee of Tarter Gate ... Keep Reading »
Federal Court Rejects Computer Fraud Coverage for Social Engineering Loss
In SJ Computers LLC v. Travelers Casualty and Surety Company of America, the U.S. District Court for the District of Minnesota recently addressed the scope of insurance available for a phishing scheme under the terms of a crime policy. The fact pattern leading to the insurance claim in SJ Computers is a familiar one: SJ Computers’ purchasing manager received fraudulent invoices from a bad actor purporting to be a legitimate vendor, ERI Direct. The invoices directed SJ ... Keep Reading »
Southwest Marine and General Insurance Co. v. United Specialty Insurance Co.: A Lesson in Common Limitations of Additional Insured Provisions
In Southwest Marine and General Insurance Co. v. United Specialty Insurance Co., the U.S. District Court for the Southern District of New York recently highlighted limitations in a common policy endorsement extending commercial general liability insurance to additional insureds. Hanjo Contractors Inc. subcontracted with Manhattan Steel Design to perform work on a New York building. In February 2016, Manhattan Steel employee Oscar Perez was struck and injured by a ... Keep Reading »
Delaware Superior Court Applies “Meaningful Linkage” Test for D&O Related Acts Analysis
In Options Clearing Corp. v. U.S. Specialty Insurance Co., the Delaware Superior Court addressed the scope of related or interrelated wrongful acts policy language in connection with SEC investigations and enforcement actions involving the insured, Options Clearing Corp. (OCC). According to the opinion, OCC is a registered U.S. clearing agency and derivatives clearing organization, which provides clearing and settlement services to 18 exchanges. OCC is the sole ... Keep Reading »
Arizona Federal Court Finds False Pretenses Exclusion Bars Coverage for Fraudulent Wire Transfer Under Professional Liability Policy
In Helms v. Hanover Insurance Group Inc., the U.S. District Court for the District of Arizona weighed in on the issue whether a professional liability policy provided insurance for a fraudulent wire transfer. This decision is not the first to tackle this issue, and like the other opinions issued across the country, Helms demonstrates that the answer to this somewhat thorny question depends heavily on the specific policy wording at issue. The insured plaintiffs, a ... Keep Reading »
Delaware Supreme Court Affirms Insurability of Fraud and Larger Settlement Allocation Rule
On March 3, 2021, the Supreme Court of Delaware issued a significant decision in the D&O coverage space, RSUI Indemnity Co. v. Murdock, analyzing whether fraud claims against insureds were covered under an excess D&O policy issued by RSUI Indemnity Co. to Dole Food Company Inc. The coverage dispute centered on stockholder litigation arising after David Murdock, the CEO and a director of Dole, took Dole private through a merger transaction resulting in Murdock ... Keep Reading »
Eleventh Circuit Finds Fuel Thefts Separated by “Time and Space” Constitute Separate Occurrences Needing Separate Deductibles Under Property Policy
A common issue arising in the interpretation of both liability and first party property policies is the determination of whether one or more “occurrences” are involved in any given claim or loss. The resolution of this issue can affect the applicable limit of the policy when the policy contains both a per occurrence and an aggregate limit. The issue also can arise in determining the applicable deductible or retention the insured must exhaust before any insurance under ... Keep Reading »
An Equitable Exception To the Four Corners Rule: The Eleventh Circuit Looks Beyond Operative Complaint To Find No Duty To Defend
Under Florida law, similar to that of other states, an insurer’s duty to defend is generally determined solely by the allegations found within the four corners of the complaint. Florida courts, however, recognize an exception to that general rule and will allow for the consideration of extrinsic undisputed facts, which, if pled, would place the claim outside the scope of coverage. The Eleventh Circuit recently applied this exception in BBG Design Build, LLC v. Southern ... Keep Reading »