December 2008

• Court Rules Illinois Law and Policy Language Do Not Preclude Coverage for Breach of Contract
• Insurer Entitled to Rescind E&O Policy Based on Insured’s Failure to Disclose Prior Claims
• Court Rules Prior Litigation Exclusion Is Broad and Unambiguous
• Massachusetts District Court Determines No Coverage for Attorney’s Failure to Pay Tax Fines Because Tax Returns Were Filed Prior to Policy’s Retroactive Date
• Insured Did Not Breach Cooperation Clause by Renegotiating New Policy to Be Excess to Original Policy under the Extended Reporting Period
• No Coverage for Class Actions Based on Prior Acts that Were the Subject of Other Class Actions that Predated the Policy
• RSS Information

November 2008

• Attorney-Client and Work-Product Privileges Not Waived by Disclosure to Insurer
• Related Wrongful Acts Provision Does Not Defeat an Insurer’s Duty to Defend Where at Least One of the Related Acts Occurred Before the Retroactive Date
• Eighth Circuit Holds that Securities Exclusion Unambiguously Precludes Coverage
• Connecticut District Court Holds Underwriter’s Testimony Insufficient to Support Summary Judgment on Rescission
• Coverage Barred by Failure to Provide Notice and by Dishonesty Exclusions; Physical Delivery of Policy to Insured Not Necessary
• Attorney’s Failure to Disclose Malpractice Warranted Rescission as a Matter of Law
• Pennsylvania District Court Holds Sale of Unregistered Securities Does Not Constitute “Professional Services” and Bars Coverage Based on Insolvency Exclusion
• Insurer Has No Duty to Defend Where Complaint Against Policyholder Alleges Employee Dishonesty, Invoking the Dishonesty Exclusion in an E&O Policy
• Later Filed Suit Did Not Relate Back to Claim Made During Policy Period
• Knowledge of Client’s Misconduct Does Not Preclude Coverage under Prior Knowledge Exclusion
• Ninth Circuit: Insurer Entitled to Rescind Based on Insured’s Failure to Disclose Prior Claims
• Maine Supreme Court Requires Professional Liability Insurer to Prove Fraud, Materiality and Reliance in Order to Rescind Policy
• Court Holds that Each Count in Complaint Constitutes a Separate “Claim”
• Court Narrowly Construes Contract and Services Exclusions
• RSS Information

October 2008

• Texas Supreme Court Holds that Waiver and Estoppel Cannot Be Used To Expand Coverage
• Fifth Circuit Rejects “Stacking” of Consecutive Policies’ Limits
• Letter That Sought Information To Determine Whether Legal Action Was Warranted Did Not Constitute a “Claim” for Claims-Made Purposes
• Other Insurance Clause of “No Liability” Variety Trumps “Excess” Clause
• Release for Settled Securities Claim Precluded Coverage for Related ERISA Claim
• Kansas Supreme Court Applies “Subjective-Objective” Standard to Bar Coverage under Application Warranty Exclusion
• Colorado District Court Holds Reserve and Claims Handling Information Is Discoverable
• Former Officer and Director Is an “Individual Insured” for Purpose of Applying Insured v. Insured Exclusion
• Excess Insurer’s Consent Was Required for Settlement But Excess Insurer Did Not Have an Implied Duty To Participate in Settlement Discussions
• Outside Capacity Exclusion Bars Coverage
• RSS Information

September 2008

• Eleventh Circuit Affirms that Payment Made to Settle Section 11 Liability Does Not Constitute “Loss”
• Coverage Litigation Focus: The Discoverability of an Insurer’s Loss Reserves
• Evidence of Oral Settlement Agreement Reached in Mediation Inadmissible
• Prior Acts Exclusion Held Not Dependent on Identity of Prior Actor
• Federal Court in Idaho Holds Coverage Barred under Real Estate Liability Policy, But Insurer Not Entitled to Reimbursement of Defense Expenses
• Plaintiffs’ Third Suit Against Town Distinct from Prior Two and Thus a New “Claim”
• “Negligent Publication” Does Not Include False Advertising or Negligent Misrepresentation
• New Jersey Appellate Court Holds D&O Policy Pollution Exclusion Inapplicable
• Eleventh Circuit Holds Pollution Exclusion Bars Coverage
• Eighth Circuit: “Error” Under E&O Policy Includes Intentional, Non-Negligent Acts or Mistakes, Including Breach of Contract Claims
• Second Circuit Affirms Verdict Finding Breach of Covenant of Good Faith and Fair Dealing and Trial Court’s Decision to Vacate Bad Faith Award
• Court Rules That State Attorney General Subpoenas Constituted a Claim and That Prior Notice Exclusion Does Not Apply
• Top Litigator, New Associate Join Wiley Rein’s Professional Liability Practice
• RSS Information

August 2008

• District Court Holds That Untimely Objection Waives Fifth Amendment Objection in Coverage Dispute
• California Court of Appeal Holds That I v. I Exclusion Bars Coverage
• D&O Policy’s Fraud Exclusion Did Not Bar Coverage for Securities Class Action Settlement Because There Was No Finding of Fraud in the Underlying Action
• No Coverage for Lawyer Malpractice Claim Where Circumstances and Potential Claim Disclosed in Policy Application
• Exclusion for Claims Arising Out of Defective Title Does Not Apply to Causes of Action That Could Exist Independently of Defective Title
• Multiple Claims Within Single Lawsuit Are Related Claims Subject to Single Per-Claim Policy Limit
• Third Circuit Certifies Questions Regarding the In Pari Delicto Defense to the Pennsylvania Supreme Court
• Prejudice Irrelevant to Prior Knowledge Defense Under Lawyers' Professional Liability Policy
• RSS Information
• Other Decisions of Note
• Insurer Can Rescind Policy Based on Misstatements in Application; Warranty, Dishonesty and Personal Profit Exclusions Bar Coverage

July 2008

• New York Court Rejects Application of Equitable Relief Sublimit and I v. I Exclusion
• Fifth Circuit Allocates Between Covered and Uncovered Amounts and Finds Punitive Damages Uninsurable under Texas Law
• New York Federal Court: Prior to Judicial Determination of No Coverage, Insurer Has Duty to Advance Defense Costs
• Ninth Circuit: Notice-Prejudice Rule Does Not Apply to Claims-Made-and-Reported Policies under Oregon Law
• Officer's Repayment of Undeserved Severance Payments Is Not Covered Loss and Triggers Profit Exclusion
• I v. I and Breach of Contract Exclusions Bar Coverage for Dispute Between LLC Members
• Other Decisions of Note
• Prior Knowledge Exclusion Is Non-Severable under New York Law
• California Appellate: Failure Timely to Report Demand Letter Barred Coverage for Later-Filed Lawsuit
• Tenth Circuit Holds Improper Medicaid Billing Is Not a Professional Service

June 2008

• Pennsylvania Federal District Court Holds that Insurer May Rescind Policy Based on Material Misrepresentations in Application
• Seventh Circuit Holds Underfunding of a Pension Plan Does Not Constitute Loss
• New Jersey District Court Holds that Lawsuits, and Not Counts Alleged within Lawsuits, Constitute “Claims” and Applies Breach of Contract Exclusion to Bar Coverage under E&O Policies
• Tenth Circuit Finds Insurer Must Defend an Insurance Agency and Its President under E&O Policy Because Policy Exclusions Did Not Bar All Allegations
• Court Applies Exclusion for Claims Involving Receivership of a Healthcare Benefit Plan
• Chief Counsel and Staff Director of the Senate Ethics Committee Joins Wiley Rein
• Other Decisions of Note

May 2008

• Refco Bankruptcy Court Orders Advancement of Defense Costs Despite Guilty Pleas in Criminal Proceedings
• Duty to Defend Not Triggered by Allegations Outside Professional Services Coverage
• Coverage Not Barred Where Insured Law Firm Failed to Disclose Prior Representation Had Been Terminated
• Utah Federal Court Holds that Prior Knowledge Exclusion Bars Coverage; Certifies Question of Whether Insurer May Recoup Defense Costs
• Notice and Discovery Provisions of Commercial Crime Policy Strictly Enforced
• Eighth Circuit: No Coverage under D&O Policy for Claim Arising from Contract
• Other Decisions of Note
• Seventh Circuit Holds No Coverage for Unpaid Pension Benefits Resulting from Company’s Business Distress; Enforces Consent to Settle Provision
• Coverage Litigation Focus: Choice of Law and the Race to the Courthouse

April 2008

• Court Equates Insurer’s Duty to Advance Defense Costs with Duty to Defend
• No Coverage Under New York Law When Policyholder Settles Without Insurers’ Consent
• I v. I Exclusion Bars Coverage for Receiver’s Suit against Insured Person Brought “on Behalf of” Insured Investment Firm
• Fact Issues Preclude Rescission Despite Policyholder’s Failure to Disclose Criminal Scheme
• Missouri Court Finds That Insured’s Refusal to Testify Based on Fifth Amendment Rights Is Not a Per Se Violation of a Policy’s Cooperation Clause
• Louisiana Appellate Court Holds Claims-Made Policies Are Consistent with Louisiana Statute and Public Policy
• California Appellate Court Holds Excess Policy Not Triggered Where Settlement with Primary Carrier Fails to Exhaust Primary Policy Limit
• Other Decisions of Note

March 2008

• I v. I Exclusion Bars Coverage Where Security Holder Assisted by an Insured
• Ninth Circuit Holds I v. I Exclusion Does Not Bar Coverage; Declines to Determine Exact Meaning of “Assistance”
• Florida District Court Holds Notice of a Potential Lawsuit Does Not Constitute a “Claim”
• Policyholder Not Entitled to Attorneys’ Fees or Prejudgment Interest for Dispute Over Reasonableness of Underlying Defense Costs
• Breach of Notice Provision Precludes Coverage Under a Claims-Made Policy, Even in Absence of Prejudice
• Coverage Litigation Focus: Untimely Objection Waives Fifth Amendment Objection in Coverage Dispute
• Other Decisions of Note

February 2008

• Louisiana Court Holds Coverage Available Under Claims-Made Policy for Claim Made After Policy Expires
• Delaware Chancery Court Grants Plaintiffs Right to Review Special Committee Report Regarding Backdating Activities
• District Court Holds Policyholder May Depose Insurer’s In-House Counsel
• North Carolina Court Holds Section 11 Damages Against Underwriter Constitute Insurable “Loss”
• Coverage for Lawyer’s Malpractice Claims Barred by Misappropriation and Dishonesty Exclusions
• E&O Policy Provides Coverage Where Alleged Conduct Involving Procurement of Insurance Could Be Considered Negligent

January 15, 2008

• U.S. Supreme Court Curbs Securities Lawsuits Against Secondary Actors

January 2008

• Notice of Prior Suit Against Company Does Not Constitute Adequate Notice of Later Suit Against Directors and Officers
• No Coverage Under E&O Policy Where Only Intentional Conduct Is Alleged; Insurer May Be Estopped from Withdrawing from Defense
• Claimants Against Insured Allowed to Intervene in Rescission Action Brought by Insurer
• New York Court Holds Lack of Cooperation Disclaimer Untimely
• Third Circuit Holds Issuance of Promissory Notes Does Not Constitute Provision of “Professional Services”
• Law Firm and Lawyer’s Estate Not Entitled to Coverage for Amounts Borrowed and Not Repaid to Former Clients
• Texas Supreme Court to Decide Whether Prejudice Is Required to Support a Late Notice Defense Where Notice Is Given During the Policy Period
• Other Decisions of Note