HNRK Coverage Corner

On May 29, 2024, Judge John T. Dorsey of the United States Bankruptcy Court for the District of Delaware issued a decision in Insys Liquidation Trust v. XL Specialty Ins. Co., Adv. Proc. No. 23-50484 (JTD), granting an excess D&O insurer’s motion for summary judgment under the policy’s Prior and Pending Litigation Exclusion.  The wrinkle here is that the “prior litigation” was a qui tam complaint under the False Claims Act that had been filed under seal before the policy period but was never served.  Although the insured did not know—and could not have known—about the lawsuit ...

On May 15, 2024, the Eighth Circuit issued a decision in Dexon Computer, Inc. v. Travelers Property Casualty Company of America, Case No. 23–1328, interpreting what the district court aptly described as a “nebulous concept”—the “related acts” provision in a claims made liability policy.

As we have explained in a previous post on this topic, claims made policies generally cover claims made against the insured during the policy period, even though the underlying conduct may have occurred during an earlier period.  But sometimes, a lawsuit filed during the policy period ...

On May 9, 2024, Judge Theodore C. Zayner of the California Superior Court for the County of Santa Clara issued a decision in Zoom Video Communications, Inc. v. Underwriters at Lloyd’s London, Case No. 22-CV-398878, holding that a civil investigative demand (“CID”) from the Federal Trade Commission (“FTC”) did not constitute a covered “Claim” under an errors and omissions policy issued to Zoom.

Responding to a government investigation can be a costly proposition.  The attorneys’ fees and other expenses incurred to comply with a grand jury subpoena or a civil ...

On May 9, 2024, Judge Rennie of the Delaware Superior Court issued a decision in Origis USA LLC v. Great Am. Ins. Co., Case No. N23C-07-102, holding that an insured’s coverage action against its D&O insurers was premature in light of the policy’s “No Action” clause.

The insured’s primary policy (to which three excess insurers followed form) states:

With respect to any Liability Coverage Part, no action shall be taken against the Insurer unless, as a condition precedent thereto, there has been full compliance with all the terms of this Policy, and until the Insured’s

As policyholder counsel, we’re predisposed to look at insurers with a jaundiced eye. So, we were pleased to read reports that Chubb—the insurer for Baltimore’s Francis Scott Key Bridge, which collapsed on March 26—is preparing to make a prompt $350 million payment to the State of Maryland.

Where coverage and a loss far exceeding the coverage limits are clear, there is no good faith reason to delay payment.  Good to see an insurer doing the right thing.