In President and Fellows of Harvard College v. Zurich American Insurance Company, the U. S. District Court for the District of Massachusetts discussed the basis for its strict enforcement of an excess insurance policy’s notice requirement. Harvard sought coverage from its excess insurer, Zurich, under a “claims-made-and-reported insurance policy” for an underlying lawsuit against Harvard regarding challenges to its admission policies. The underlying suit was filed in ... Keep Reading »
Claims-made and Reported
Seventh Circuit Finds Pleadings in Same Lawsuit Are “Related Claims,” Despite Addition of New Allegations and Defendants
In a recent decision, the Seventh Circuit Court of Appeals found an amended complaint filed in an underlying action was a “related claim” with respect to the original complaint filed in the same suit and thus that the matter should have been reported to the insurer during the policy period in effect at the time of the original pleading. The dispute in Hanover Insurance Co. v. R.W. Dunteman Co. arose from a conflict among family members over the ownership interests in ... Keep Reading »
Eleventh Circuit Finds Claims-Made Policy’s “Correlating Claims” Provision Substantially Similar to “Related Claims” Provisions
In Datamaxx Applied Technologies Inc. v. Brown & Brown Inc., the Eleventh Circuit Court of Appeals affirmed the district court’s grant of summary judgment to the insurer, finding no merit in the insured’s argument that the analysis for construing a “correlating claims” provision differed substantially from the analysis in construing a “related claims” provision. In doing so, the Eleventh Circuit found that the insurer owed no duty to indemnify the insured for a claim ... Keep Reading »
Sixth Circuit Holds Attorneys’ Fee Award Does Not Constitute Damages Under Professional Liability Policy
The Sixth Circuit Court of Appeals affirmed an order granting summary judgment in favor of the insurer in Wesco Insurance Co. v. Roderick Linton Belfance LLP, holding that the award of attorneys’ fees was a “sanction” and thus was not covered damages under the Wesco professional liability policy. This matter concerned an award of attorneys’ fees stemming from claims that were brought against schools under the Individuals with Disabilities Education Act (IDEA). The ... Keep Reading »
Delaware Supreme Court Holds That “Related Claim” Standard Is Based on Plain Language of Policy
As we previously discussed in this blog, in June 2021 the Delaware Superior Court found in First Solar Inc. that there was no coverage under a claims-made policy for a securities action (Maverick) filed during the relevant policy period, on the grounds that the Maverick action constituted a "related claim" with respect to a class action that had been filed before the policy period commenced (Smilovits). In so holding, the court applied a "fundamentally identical" ... Keep Reading »
Consent to Settle: Third Circuit Reminds Insureds to Obtain Prior Written Consent Required by a Claims-Made Policy or Face Claim Denial, and Rejects Bad Faith Claim in Absence of a Finding of Coverage Under New Jersey Law
In a non-precedential decision, the Third Circuit Court of Appeals upheld a district court’s grant of summary judgment to an errors and omissions insurer that declined to indemnify a settlement because the insured had settled the underlying lawsuit without obtaining the insurer’s prior written consent, “an express condition of coverage under the policy’s consent clause.” Interestingly, the court noted that the E&O insurer had paid the insured’s “defense costs to the ... Keep Reading »
Delaware Superior Court Finds Securities Class Action and Its Opt Outs’ Subsequent Class Action Are “Related Claims”
In First Solar Inc. v. National Union Fire Insurance Company of Pittsburgh, the Delaware Superior Court held there was no coverage for a class action brought by the individuals who opted out of a prior class action that had been filed before the subject policies’ inception where both actions involved fundamentally identical allegations of wrongdoing. First Solar sought coverage for a class action lawsuit filed on June 23, 2015 (Maverick action) under primary and ... Keep Reading »
New York First Department Clarifies Effect of New York Insurance Law Section 3420 on Claims-Made-and-Reported Policies
In Certain Underwriters at Lloyd's London v. Advance Transit Co., a New York appellate court provided valuable clarity into how New York Insurance Law section 3420 applies to claims-made-and-reported insurance policies. Underwriters issued a claims-made-and-reported liability policy to Advance Transit Co., effective October 30, 2016, to October 30, 2017. The policy provided that if it were renewed, Advance would have an additional 60 days after the expiration of the ... Keep Reading »
Federal Puerto Rico Court Affirms That Coverage Under Claims-Made Policy Is Not Created by Waiver or Estoppel
The U.S. District Court for the District of Puerto Rico recently granted summary judgment in favor of Liberty International Underwriters after determining that coverage was not created by waiver or estoppel for a claim first made six months before the policy period of a claims-made policy. In Galarza-Cruz v. Grupo Hima San Pablo Inc., the plaintiff sued multiple defendants, including the insured and Liberty, in connection with various claims under Title VII and multiple ... Keep Reading »
Seventh Circuit Rejects Insured’s “Claim Within a Claim” Argument
The Seventh Circuit Court of Appeals recently had occasion to clarify the parameters of a “claim” in insurance policies. In Market Street Bancshares Inc. v. Federal Insurance Co., Judge Kanne penned an opinion holding that a legal argument appearing in an already uncovered “claim” cannot itself constitute a “claim” for purposes of liability policies. This insurance coverage dispute involved an almost two-decade-long underlying lawsuit against the insured, a bank, long ... Keep Reading »