{"id":156,"date":"2013-04-18T16:34:12","date_gmt":"2013-04-18T16:34:12","guid":{"rendered":"http:\/\/www.joneslemongraham.com\/blog\/?p=156"},"modified":"2021-12-21T20:05:58","modified_gmt":"2021-12-21T20:05:58","slug":"prior-loss-clause-of-commercial-crime-policy-limited-coverage-for-fraudulent-employee-expense-reimbursements-that-occurred-during-the-bond-period-and-in-the-immediate-prior-bond-peri","status":"publish","type":"post","link":"https:\/\/www.joneslemongraham.com\/blog\/prior-loss-clause-of-commercial-crime-policy-limited-coverage-for-fraudulent-employee-expense-reimbursements-that-occurred-during-the-bond-period-and-in-the-immediate-prior-bond-peri\/","title":{"rendered":"\u201cPrior loss clause\u201d of commercial crime policy limited coverage for fraudulent employee expense reimbursements that occurred during the bond period and in the immediate prior bond period, but no earlier."},"content":{"rendered":"

by Christopher J. Graham<\/a> and Joseph P. Kelly<\/a><\/p>\n

Emcor Group, Inc. v. Great American Insurance Co., Case No. ELH-12-0142 (D. Md. Mar. 27, 2013):<\/a><\/p>\n

Insurer wrote three successive one-year commercial crime policies December 1, 2002 and December 1 2005. Insured submitted a claim for a loss resulting from a COO and VP\u2019s fraudulent expense reimbursements running between 1999 and 2005. Each policy contained a \u201cPrior Loss Clause\u201d, which read as follows:<\/p>\n

\n

Loss Sustained During Prior Insurance: a. If you, or any predecessor in interest sustained loss during the period of any prior insurance that you or the predecessor in interest could have recovered under that insurance except that the time within which to discover loss had expired, we will pay for it under this insurance, provided: (1) this insurance became effective at the time of cancellation or termination of the prior insurance; and (2) this loss would have been covered by this insurance had it been in effect when the acts or events causing the loss were committed or occurred
\n Insurer denied the claim, arguing that the Prior Loss Clause applied only to the most recent prior insurance, i.e. the policy written by Insurer covering December 1, 2003 to December 1, 2004, not Insured\u2019s prior policy with another insurance company, which ran from 1999 to 2002. Insured sued and both parties filed motions for summary judgment.<\/p>\n<\/blockquote>\n

Issue #1:<\/strong> Did the Prior Loss Clause apply to all of the Insured\u2019s previous policies? No.<\/p>\n

The Court held the \u201cthis insurance\u201d language of the Prior Loss Clause unambiguously referred to the contract immediately prior, not to the Insured\u2019s older policies. The court looked to the Maryland Code\u2019s definition of \u201cinsurance\u201d as \u201ca contract to indemnify or to pay or provide a specified or determinable amount or benefit on the occurrence of a determinable contingency.\u201d (Ins. Section 1\u2013101(s)). Because only the 2003\u20132004 policy terminated when the 2004\u20132005 policy went into effect, only prior losses incurred during the 2003\u20132004 policy were covered.<\/p>\n

Issue #2:<\/strong> Was Insurer judicially estopped from claiming the Prior Loss Clause applied only to the previous year\u2019s policy because it had settled with another insured under the same policy language and circumstances? No.<\/p>\n

A settlement is not a final determination by a court; therefore it does not bind the insurer in the current proceeding.<\/p>\n","protected":false},"excerpt":{"rendered":"

by Christopher J. Graham and Joseph P. Kelly Emcor Group, Inc. v. Great American Insurance Co., Case No. ELH-12-0142 (D. Md. Mar. 27, 2013): Insurer wrote three successive one-year commercial crime policies December 1, 2002 and December 1 2005. Insured submitted a claim for a loss resulting from a COO and VP\u2019s fraudulent expense reimbursements […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/posts\/156"}],"collection":[{"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/comments?post=156"}],"version-history":[{"count":2,"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/posts\/156\/revisions"}],"predecessor-version":[{"id":3223,"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/posts\/156\/revisions\/3223"}],"wp:attachment":[{"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/media?parent=156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/categories?post=156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.joneslemongraham.com\/blog\/wp-json\/wp\/v2\/tags?post=156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}