US Court of Appeals Reverses Summary Judgment in Conflict Over Medical-Malpractice Insurance

The United States Court of Appeals for the Seventh Circuit of Chicago held that a prior acts exclusion under an insurance policy issued by a professional liability insurer to a medical-practice insurer excluded coverage. The exclusion was ruled legal only if the medical-malpractice insurer committed an actual wrongful act, not just if it was accused of committing such an act. MedPro, the insured medical malpractice carrier in this case, was represented by Clyde & Co., LLP of Washington, D.C. The professional liability insurer was American International Specialty Lines Insurance Co. (AISLIC). MedPro issued medical-malpractice coverage to Dr. Benny Phillips, subject to a $200,000 liability limit. In 2003, while the coverage was in effect, Phillips was sued along with others in Texas following his treatment of a patient who died of internal bleeding following a hysterectomy. While some of the defendants in the case agreed to settle, the underlying case continued as to Dr.…

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