REINSURER OFF THE HOOK FOR LITIGATION DEFENSE COSTS
Public Reimbursement Management of Florida (“PRM”) sued its reinsurer One Beacon Insurance Co. (“OneBeacon”) for reimbursement of defense costs PRM incurred while defending an insured involved in a construction contract dispute. The primary issue was whether the underlying construction contract dispute fell within PRM’s duty to defend and whether OneBeacon was obligated to reimburse PRM. The Florida district court granted OneBeacon’s motion to dismiss with prejudice, concluding that (1) PRM did not have a duty to defend because the construction dispute fell within an exclusion in the PRM insurance policy for intentional breaches of contract, and (2) the theory of equitable estoppel did not apply to create insurance coverage between OneBeacon and PRM because OneBeacon made it clear in its correspondence with PRM that it did not believe PRM had a duty to defend the construction contract dispute. Public Risk Management of Florida v. One Beacon Insurance Co., Case No. 13-1067 (M.D. Fla. Oct. 18, 2013).
This post written by Abigail Kortz.
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