|
|
Publications
Complaint Naming Corporation as Sole Defendant Not a Claim Against Insured Person Under D&O Policy
Insurance Law Update
First Circuit Court of Appeals
In Medical Mut. Ins. Co. v. Indian Harbor Ins. Co., 583 F.3d. 57 (1st Cir. (Me.) October 8, 2009), the First Circuit Court of Appeals held that a judicial complaint filed against a corporation was not a claim “made against an insured person” for purposes of coverage under a directors and officers (D&O) liability policy, notwithstanding allegations of wrongdoing against the insured company’s directors and officers.
After being fired, the CEO of a company filed a civil action alleging discrimination by the company and its directors and officers. The CEO named the company as the sole defendant. The company sought coverage under its D&O policy. The insurer declined coverage and the company sought declaratory relief. The lower court dismissed the coverage action and the company appealed.
The First Circuit affirmed. The complaint was a “claim” because it marked the commencement of a “civil proceeding in a court of law,” but it was not “made against an insured person.” The phrase “made against” unambiguously required that a complaint be filed in court and identify a person as a defendant. Allegations of wrongdoing by an insured company’s directors and officers were not equivalent to a claim made against those directors and officers. The court also held that a prayer for injunctive relief, which incidentally refers to the company’s agents, did not qualify as a claim made against the agents as it did not demand relief from them in their personal capacities. Finally, the court held that a settlement requiring the CEO to renounce potential claims against the directors and officers did not expand the parameters of the action or transform a non-covered allegation of wrongdoing into a covered claim.
|
Related People
Related Offices
Related Practices
|