The Delaware Superior Court has held that a professional services exclusion and a contract exclusion in a D&O policy do not bar coverage for a False Claims Act settlement. Guaranteed Rate, Inc. v. ACE Am. Ins. Co., 2022 WL 4088596 (Del. Super. Ct. Aug. 24, 2022). The court also held that the insurer had failed to show the amount of the settlement was unreasonable. However, the court dismissed the insured’s bad faith claim.
The U.S. Department of Justice and the U.S. Attorney’s Office for the Northern District of New York initiated an investigation into a mortgage loan company for alleged violations of the False Claims Act. The investigation alleged that the company failed to meet applicable quality-control standards in its underwriting process. The company and the federal government reached a $15 million settlement. Days after the settlement, an employment retaliation claim against the company was unsealed. The underwriter sought coverage for the settlement under the D&O and EPL coverages of its insurance policy. The insurer denied coverage. After the company sued, the parties cross-moved for summary judgment.
The court held that the settlement was covered under policy’s D&O coverage part. It first examined whether the policy’s professional services exclusion applied. The court found that the exclusion did not apply because the company owed a duty to meet certain quality control standards to the government, not the mortgage borrowers, so the complaint did not...
Kolkata: Kolkata Police has been grappling with a fresh challenge since the past week — controlling fake news. While it initially started with fake circulars, beginning with "restrictions" on cert...