A federal court last month turned away an insurer’s legal arguments seeking to avoid financial institution bond coverage for a bank’s losses resulting from a borrower’s use of forged documents to obtain a $3.6 million loan. In doing so, the Arizona court rejected Everest National Insurance Company’s narrow construction of the bond’s “Securities” insuring agreement and ruled that the notice-prejudice rule applies to a financial institution bond.
Drug-maker Pfizer and one of its excess insurers, North River, are in the middle of a contentious dispute regarding the proper forum for their coverage dispute over directors and officers liability insurance following both parties’ race to the courthouse to file competing lawsuits in 2015. Pfizer argues that its own preferred forum of Delaware (where Pfizer is incorporated) is correct, while North River counters that New York (where Pfizer’s headquarters and its broker are located) is the proper forum. The dispute, which involves competing motions in Delaware and New York courts, highlights the importance of both the timing and location of forum selection in litigating insurance coverage disputes.