Insurance Disputes

NEW CASTLE, Del. - Excess directors and officers (D&O) insurers are required to pay defense costs to defend an underlying lawsuit alleging wrongful acts by the insured's directors and officers because the primary policies were exhausted and coverage is afforded for the underlying claims, a Delaware Superior Court judge ruled July 31 (HLTH Corp. and Emdeon Practice Services Inc. v. Agricultural Excess and Surplus Insurance Co., et al., No. 07C-09-102, Del. Super.). Full story on lexis.com

AKRON, Ohio - A directors and officers (D&O) insurer did not violate any policy provision by settling claims made against it before obtaining its insureds' consent because the claims were made directly against the insurer and not the insureds, the Ninth District Ohio Court of Appeals said July 30 (Esther Duncan, et al. v. Harold H. Hopkins and The Cincinnati Insurance Co. v. Harold H. Hopkins, No. 24065, Ohio. App., 9th Dist.; 2008 Ohio App. LEXIS 3188). Full story on lexis.com

SHREVEPORT, La. - A directors and officers (D&O) insurer owes no duty to defend its insured against an employment discrimination lawsuit because the insured failed to give notice as soon as practicable of the discrimination claim, a federal judge said July 29 (Rodney Williams v. Synergy Care Inc., No. 07-0137, W.D. La.; 2008 U.S. Dist. LEXIS 57242). Full story on lexis.com

PHILADELPHIA - An insurer is not obligated to defend its insured under an E&O binder because the binder's warranty exclusion precludes coverage for any claims known to the insured before the inception of coverage, a federal judge said July 25, noting that the insured had knowledge of a potential claim when the policy application was completed (MDL Capital Management Inc., et al., v. Federal Insurance Co., et al., No. 05-1396, W.D. Pa.; 2008 U.S. Dist. LEXIS 57089; See 4/16/08, Page 4). Full story on lexis.com

COLUMBUS, Ohio - An insured is not entitled to a defense or indemnity under an errors and omissions (E&O) endorsement because the underlying claims of misappropriation of trade secrets and interference with prospective economic advantage do not allege accidental conduct by the insured as required by the E&O endorsement, a federal judge said July 22 (PICA Corp. v. Clarendon America Insurance Co., et al., No. 07-1126, S.D. Ohio; 2008 U.S. Dist. LEXIS 55617). Full story on lexis.com

BOSTON - A claimant is appealing a federal judge's ruling that he cannot recover damages for a wrongful rape conviction from a law enforcement liability insurer because the claimant failed to show that any of the injuries occurred during the policy periods at issue (Eric Sarsfield v. Great American Insurance Company of New York, Great American Alliance Insurance Co., and Great American Assurance Co., No. 08-1890, 1st Cir.). Full story on lexis.com

SEATTLE - Because three underlying employment discrimination class action lawsuits filed against an insured were determined to constitute a single employment occurrence, an excess insurer has no further coverage obligations, a federal judge said July 28 (The Boeing Co. v. Agricultural Insurance Co., No. 05-0921, W.D. Wash.; 2008 U.S. Dist. LEXIS 57491). Full story on lexis.com

RICHMOND, Va. - An insured seeking coverage for an employee dishonesty claim cannot recover punitive damages for a bad faith claim against its insurer because Virginia law does not allow the imposition of punitive damages when an insurer, in bad faith, delays or fails to satisfy a claim against its insured, a federal judge determined July 21 in dismissing the insured's bad faith claim (Adolf Jewelers Inc. v. Jewelers Mutual Insurance Co., No. 08-233, E.D. Va.; 2008 U.S. Dist. LEXIS 55791). Full story on lexis.com

MILWAUKEE - A school district's insurers may have a duty to defend the district's volunteer wrestling coach in an underlying lawsuit because there is a question of fact as to whether the coach was acting within the scope of his duties as a volunteer wrestling coach when a student was injured, the District 1 Wisconsin Court of Appeals said July 29 (Ryan M. Lampe v. Allstate Insurance Co., et al., No. 2007 AP2249, Wisc. App., Dist. 1; 2008 Wis. App. LEXIS 573). Full story on lexis.com

STATEN ISLAND, NY - Numerous New York automobile insurers are not responsible for paying $20 million in pending claims as the result of a jury's July 17 determination that a medical facility was fraudulently incorporated because a physician did not own and control the professional medical corporation under whose name the physician sought to collect first-party no-fault benefits from the insurers (In the Matter of Andrew Carothers, M.D., P.C., v Insurance Companies represented by Bruno, Gerbino & Soriano et al., No. 2217/06, N.Y. Sup., Richmond Co., 2nd Dist.). Full story on lexis.com