On Sept. 14, the Supreme Court of the State of Delaware issued a decision in Ace American Insurance Company v. Guaranteed Rate, Inc., finding that the professional services exclusion in the management liability (D&O) insurance policy provided by Chubb unit Ace did not apply to bar coverage for a False Claims Act (FCA) investigation by the government against firm client, mortgage lender Guaranteed Rate.
In its ruling, the court analyzed the question of whether FCA allegations arise out of “professional services,” ultimately deciding that they are separate from the professional services that a company provides to its customers. As a result, the court found that insurance coverage is available for FCA claims under a management liability (D&O) policy.
The Barnes & Thornburg team representing Guaranteed Rate was Lilit Asadourian, William Burton, Thomas Hanson, Alice Kyureghian and Aaron Lindstrom.
In response to the court’s decision, Asadourian said, “We believe the Delaware Supreme Court ruled clearly and consistently with the law, and look forward to finally collecting the insurance proceeds due to our client.”
The decision has gained broad media attention, with articles in Bloomberg Law, Business Insurance, Claims Journal, Insurance Journal, and Law360.