Coverage Battle At 9th Circ. May Hobble Private D&O Policies

By Jeff Sistrunk (May 25, 2017, 7:02 PM EDT) -- Scottsdale Insurance Co. recently asked the Ninth Circuit to uphold a ruling that an exclusion in an education technology company's policy for claims related to professional services bars coverage for a False Claims Act suit, and attorneys say a decision in the insurer's favor could severely limit D&O coverage for privately held service providers.

In an appellate brief filed Wednesday, Scottsdale said U.S. District Judge Claudia Wilken properly concluded in a November decision that the professional services exclusion in HotChalk Inc.'s directors and officers policy precludes coverage for the company's costs to defend and settle the underlying FCA action. Crucially, the...

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