Reinsurer was ordered to advance defense costs in a claim involving investor lawsuits over an allegedly fraudulent investment scheme involving thoroughbred horse breeding. Policyholder has exhausted its primary carrier and sought to obtain coverage of defense costs from its excess insurer. Specifically, the order held that even though the excess insurer didn't have to defend the policyholder in the horse breeding scheme, it still had to advance defense costs for matters covered by the policy as they accrued. Subsequently, the policyholder asked the re-insurer to pay $3.2 million in defense costs.
The order required the re-insurer to advance the defense cost but the re-insurer balked and disputed the meaning of "undertaking" in the directors and officers liability policy at issue. Reinsurer requested clarification of the order and argued that the language of the policy barred coverage but the judge rejected its argument. Reinsurer then filed the instant appeal.
For a copy of the appeal click hereJeffrey Kingsley and Sarah Fang
http://www.goldbergsegalla.com/attorneys/Kingsley.html
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