Applying Iowa law, a federal district court has held that an insurer did not act in bad faith when denying coverage for expenses relating to an ERISA lawsuit because the claim turned on an unsettled question of Iowa law.  Telligen, Inc. v. Atlantic Specialty Ins. Co., 2020 WL 3399916 (S.D. Iowa Apr. 16, 2020).…

A New Jersey federal district court has ruled that a broad exclusion in a D&O Policy for claims arising out of services provided to third parties barred coverage for a claim arising out of an insured’s provision of services to its client, and the inclusion in the policy of narrower exclusions (for professional services and insurance company services) did not create any ambiguity.  Benecard Servs., Inc. v. Allied World Specialty Ins. Co., 2020 WL 2842570…

The Supreme Court’s June 22 decision in Liu v. Securities and Exchange Commission addressed important issues about the SEC’s authority to obtain “disgorgement” and the meaning of the term.  This article summarizes the Court’s ruling in Liu, including the Court’s characterization of the term disgorgement and limitations on the SEC’s ability to obtain the remedy.  It then identifies practical implications of the decision in the context of SEC enforcement, as well as potential insurance coverage…

The U.S. District Court for the Southern District of New York, applying New York law, has held that no coverage is available for related claims reported to the insurer after the end of the policy period in which the first claim was made.  Berkley Assurance Co. v. Hunt Constr. Group, Inc., 2020 WL 3000399 (S.D.N.Y. June 4, 2020).…

Applying the law of Puerto Rico, a federal district court held that coverage was unavailable for an underlying lawsuit under a claims-made policy because the claim was deemed first made prior to the inception of the policy period.  Galarza-Cruz v. Grupo HIMA San Pablo, Inc., 2020 WL 2843028 (D.P.R. May 28, 2020).…

Applying North Carolina law, the United States Court of Appeals for the Fourth Circuit has held that a False Claims Act (“FCA”) suit against an insured for allegedly submitting false Medicaid reimbursement claims fell within an errors and omissions policy’s coverage grant for “damages resulting from a claim arising out of a medical incident.” Affinity Living Grp., LLC v. StarStone Specialty Ins. Co., 2020 WL 2630845 (4th Cir. May 26, 2020).…

The United States District Court for the District of New Jersey, applying Delaware law, has held that an exclusion precluding coverage for misappropriation of trade secrets in a directors and officers liability policy barred coverage for a claim brought against the insured by a competitor alleging the negligent failure to supervise an employee.  Sprout Health, LLC v. RSUI Indem. Co., 2020 WL 2507776 (D.N.J. May 15, 2020).  The court determined that the negligence count…