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Indiana Federal Court Agrees with Insurer that Wrongful Acts Excluded Before Retroactive Coverage Date

3.1.2014

On March 25, 2014, the U.S. District Court for the Northern District of Indiana granted summary judgment in favor of our client on a retractive coverage date issue. Savers Prop. & Cas. Ins. Co. v. Indus. Safety & Env't Servs.Inc., 2014 WL 1230727 (N.D. Ind.) Our client had issued a Commercial Lines Policy to the Insured that included Consultant's Professional Liability Coverage. The Consultant's Professional Liability Coverage provided "claims made" coverage with a retroactive coverage date in 2005. The Insured was one of many defendants sued for injunctive relief related to groundwater contamination in northern Indiana. The Insured's president was alleged to have been part of a RICO scheme to defraud and obstruct justice and conceal environmental crimes. The Policy included a pollution exclusion, but the issue that became central to the case was the date of the Wrongful Acts at issue and the retroactive coverage date. The underlying complaint only alleged purported Wrongful Acts by the Insured's president in 1997 and 1998. The Insured argued, however, that because the RICO allegations alleged wrongful acts by other members of the RICO scheme continuing into 2012, the Policy was required to defend and indemnify the Insured. The Insured also argued that the Policy was ambiguous because the declarations page listed "N/A" under the retroactive dates column for a form that was not part of the Policy. The court agreed with the Insurer, however, that the only Wrongful Acts alleged against the Insured's president took place before the Consultant's Professional Liability Coverage retroactive coverage date. The court further agreed that the Policy was not ambiguous and that the "N/A" listed in the declarations was irrelevant because it applied only to a form that was not part of the Policy. Maria G. Enriquez briefed and argued the case.