Failure to Maintain Insurance Exclusion Precludes Coverage for Defense Costs Incurred in a Lapsed Life Insurance Dispute

In a recent insurance coverage lawsuit arising out of an underlying dispute over who was responsible for the lapse of a key man life insurance policy, a court determined that coverage for the attorneys’ fees a management consulting firm incurred in defending against the underlying claim was precluded by the failure to maintain insurance exclusion in the consulting firm’s professional liability insurance policy. Because coverage disputes involving a failure to maintain insurance exclusion are relatively rare, the court’s decision provides an opportunity to consider the exclusion and how it might affect the availability of coverage in certain claims situations.   Background After the CEO of Old Nassau died, the company submitted a claim under its Key Man life insurance policy, only to find that the policy had lapsed prior to the CEO’s death for non-payment of premium. Old Nassau then filed a lawsuit seeking to hold its insurance broker liable for…

Read more detail on Recent Insurance Law posts –

This entry was posted in Insurance and tagged , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply