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Amber Finch

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On November 8, 2016, the District Court in the District of Massachusetts held that AIG has a duty to defend Bill Cosby against pending defamation claims under both Massachusetts and California law. The court rejected AIG’s contention that the defamation claims fall within the exclusion for sexual misconduct since they were “arising out of” claimants’ original allegations of sexual misconduct.  Instead, the court found the exclusion was at least ambiguous in the context of these defamation claims and, therefore, a duty defend is owed.

It is generally well known that William H. Cosby, Jr., (known familiarly in his comedy and acting career as Bill Cosby), has been accused on a number of occasions of sexual misconduct many years ago. Cosby has denied the allegations in public statements issued personally and through representatives.

Based upon these denials, three defamation cases were filed against Cosby and others in the District Court of Massachusetts.  Green v. Cosby, Case No. 14-cv-30211, Ruehli v. Cosby, Case No. 15-cv-13796, and McKee v. Cosby, Case No. 15-cv-30221.  Cosby sought coverage for the defamation claims under a Massachusetts homeowners policy (“Homeowner’s Policy”) and a personal excess liability policy (“Excess Policy”), both purchased from AIG.  The policies cover claims alleging personal injury, which is defined to include “[d]efamation, libel or slander” emotional distress.  While the Homeowner’s Policy includes a duty to pay defense costs, the Excess Policy includes a duty to defend.  Both policies exclude actions “arising out of” sexual misconduct, harassment or abuse.
Continue Reading The Cosby Show: The Insurance Coverage Episode

Whistleblower lawsuits under the False Claims Act, also known as qui tam actions, have become more common in recent years. This is particularly so in heavily regulated industries and those in which the government routinely pays or reimburses costs, such as health care, pharmaceuticals, finance, construction and defense. Companies defending themselves against government investigations and FCA actions often have the insurance coverage they need — but frequently overlook it.

Our group recently authored an article in Business Insurance discussing insurance coverage for FCA investigations and actions. As discussed at greater length in the article, businesses facing whistleblower suits and government investigations often have coverage in standard policy types, including employment practices liability (EPL), errors and omissions (E&O), directors and officers (D&O), and commercial general liability (CGL) policies. For instance, EPL policies, which cover losses from claims stemming from wrongful employment practices, may respond to FCA claims because FCA suits frequently include a claim of retaliation by the whistleblowing employee. Where employment-related claims are also at issue and intertwined or interrelated with the FCA claims, courts have ruled that EPL insurers have a duty to defend the entire action.
Continue Reading Double-check existing policies for whistleblower coverage

Last week, the U.S. Congress adjourned for the year without making any provision for extending the federal Terrorism Risk Insurance Act (“TRIA”). Absent some sort of extension, TRIA thus will expire next week – on December 31, 2014. As a result, insurers will no longer be required to offer terrorism insurance, and even those insurers that do offer the coverage may well reassess their risk and price the coverage at substantially increased premium rates.
Continue Reading Reed Smith’s Insurance Recovery Group Ready to Help Policyholders after U.S. Congress Fails to Extend TRIA