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HNRK Coverage Corner

Court of Appeals Grants Leave to Appeal on CGL Carrier's Duty to Indemnify Brokerage Firm for Disgorgement Payment to SEC

On March 26, 2020, the New York Court of Appeals granted leave to appeal from the First Department's decision in J.P. Morgan Sec., Inc v. Vigilant Ins. Co.,126 A.D.3d 76 (1st Dep't 2018), which held that that a disgorgement payment made as part of the settlement of an SEC enforcement action was a “penalty” and therefore did not qualify as a covered “loss” under a CGL policy. This case has a long history. See our post about the First Department's decision here.

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