HNRK Coverage Corner

A recent decision from the U.S. District Court of Western District of Washington  touches on a number of important insurance coverage issues:  policy reformation, the effect of an insured’s late notice of a claim, and the insurer’s burden to prove applicability of a policy exclusion. In General Casualty Company of Wisconsin v. Reed Hein & Assoc. LLC et al., the court’s consideration of these issues resulted in opposite outcomes for two insurers. While the insured’s CGL carrier (General Casualty) successfully avoided a duty to defend, the D&O insurer (RSUI) was found to have ...

This week at the Coverage Corner, we return with an update on a Delaware case about which we’ve written previously.  In Origis USA LLC v. Great Am. Ins. Co., Case No. N23C-07-102, the Delaware Superior Court held that because the primary policy had a “No Action” clause, the insureds’ suit against their D&O insurers for advancement of defense costs was premature as long as the underlying litigation was ongoing.  We wrote about that decision here.

In July, the Delaware Supreme Court remanded the case for further consideration in light of what it said were arguments from the parties ...

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 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